Are You Getting a Fair Warranty Deal in OZ?

COMMENT: Should global manufacturers offer warranty on their products in Australia regardless of who has sold the product? And why is it that some products, particularly in the Hi Fi and high end home theatre market, are up to three times more expensive in Australia than in markets like the USA?

Personally I believe that manufacturers of equipment, such as Hi Fi, should offer global warranties. Right now a lot of those warranty expenses are forced onto Australian distributors of the products with the local company forced to wear the cost of any warranty claim in Australia.

This is despite the fact that a lot of manufacturers in the USA or Europe are building in margins for warranty claims when they price the product overseas.

Last month we exposed how Amber Technology, distributors of the Optoma and Onkyo range of goods in Australia, were refusing to honour the warranty on Optoma and Onkyo goods purchased from an overseas source. This is a publicly listed distributor, and one of the largest in the consumer electronics market.

Amber management refused to honour a warranty claim on goods that they originally sold to JB Hi Fi, after JB Hi Fi on-sold the goods at a 50 per cent discount to a Sydney-based retailer, Digital Cinema. They deemed these goods were suddenly second hand for the simple reason that JB Hi Fi had sold the products to a retailer who Amber Technology was not selling goods to.

This is wrong, and the ACCC needs to step in and protect consumers from this sort of aggressive action.

At the end of the day it’s the brand on the box that a consumer is buying, and most consumers expect a vendor or manufacturer to stand by a warranty claim if a product fails within the warranty period.

Pioneer Electronics stand by their products regardless of where the goods were purchased.

On the issue of pricing, there are several major issues. Earlier this year at the 2010 CES show in Las Vegas, I asked the CEO of one of the largest Hollywood movie companies, as to why there was an aversion by Hollywood movie houses to supply content to IPTV content providers in Australia.

He replied: “With respect, Australia is a piss ant country at the bottom of the earth. My home country, Orange Country, is the same size as Australia, 21 Million, and we are a small part of California which is only one of 52 States in the USA”.

“So do we really care about Australia, no”?

So when it comes to pricing and distribution one has to realise that Australia, with a population of 21M, is still a very small country and to produce small runs costs money.

Consumer electronics distributors in Australia are primarily small businesses and unlike a Sony, whose products are made by third party  manufacturers and supplied direct to a reseller, the distributors are having to wear the cost of freight, dollar fluctuation, taxes, and warranty costs before they have placed their own margin in a product.

They also have to build a margin in for retailers like JB Hi Fi and Harvey Norman and the specialist channel, as well as a margin for advertising and marketing. For example, Harvey Norman, as a condition of doing business with these small distributors demands that if they are to stock one of their products, they take space in a Harvey Norman catalogue. The price in some cases is $15,000 for a small 1/3 advertisement.

All of these costs have to be passed onto Australian consumers, which is not nice but unfortunately, at this stage it is a way of life for the consumer electronics industry.

Tell me what you think on these issues.

Send an email to dwr@4squaremedia.com

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