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Matt Bacon AMPS

An Open Letter to Sound Devices

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Open letter (dated 10th November 2015) to Ed Capp, Vice President of Sales & Marketing at Sound Devices, LLC regarding the UK pricing of the recently announced CL-12

Dear Ed,

Thank you firstly for your reply on JWSound (http://jwsoundgroup.net/index.php?/topic/26269-sound-devices-cl-12-pricing-survey/). It is encouraging to hear that Sound Devices want their international customers to have access to your equipment at a fair price - because at the present time, from my perspective, it is anything but.

I would like to first make the point that I have been a dedicated Sound Devices user for over a decade during which time I have owned SD 302, 552, 664, 633 mixers as well as 744 & 788 recorders. I most recently purchased a 688 mixer with the intention of adding a CL-12 as soon as it was released.

However those plans quickly changed following the release of the list prices by Shure Distribution (your exclusive UK distributor) which were 45%* more than your U.S. list prices and 33%* more expensive than available in Europe.

When purchasing Sound Devices machines in the UK I have accepted that they cost more than they do in your home territory due to shipping, import and local distribution costs. These are understandable costs. What myself and other mixers in the UK are frustrated and disappointed with is while these costs could arguably explain the price increase over the U.S. it isn't clear why Europe mainland prices are SO much cheaper as they share these same costs?

Currency exchange costs don't even explain the difference either and neither do the differences in VAT percentages within Europe (see list of prices excluding tax at the end of this letter).

Faced with such price differentials I took it upon myself earlier this month to contact your other European distributors/dealers to enquire about their CL-12 pricing and the delivery charges to the UK.

As a resident of Europe I should enjoy the privilege of the European Single Market which by definition "is a single market in which the free movement of goods, services, capital and persons is assured, and in which citizens are free to live, work, study and do business." (Source: http://eur- lex.europa.eu/summary/chapter/internal_market.html) so was prepared to pay the additional courier costs (if required) to purchase a CL-12 from a European dealer.

However to my surprise the first two dealers replied explaining that they were unable to ship to the UK due to their contractural arrangements with Sound Devices?!

Rather than asking what those business sensitive contractual arrangements are I would instead like to request clarification (publically) by Sound Devices on a more straight forward question.

Do you (Sound Devices) or do you not prevent dealers within the EU from selling to end users in EU countries other than the one they are based?

To be clearer as an example, should I as a UK individual or company be able to purchase a Sound Devices product from a dealer based in Slovakia, Germany or Italy?

If not, why not?

In your reply on JWSound you state that "Sound Devices does not have any sales policy or agreements that conflicts with EU Trade Law.". For the purposes of clarity may I ask how Sound Devices are getting around the European Single Market requirements that "there is no difference between customers anywhere in the EU. EU rules forbid discrimination between service recipients because of their nationality or where they live." (Source: http://europa.eu/youreurope/business/sell-abroad/service-providers/index_en.htm)

I accept that as the supplier you are entitled to have local distributors and dealers within each European country. These dealers will understandably and quite rightly set the price of your products based on local factors.

For the record I am not disputing the right for Shure Distribution to set the list price of the CL-12 at the price they have (Standard version at £1950 +VAT & Alia version at£2850 +VAT). What I am disputing is that I (and other UK based mixers) should be able to choose which European dealer we buy from based on the premise of the European Single Market.

I look forward to hearing from you soon. Meanwhile I shall continue my attempts to contact European dealers I have not yet received a reply from with regards to their CL-12 pricing and delivery costs to the UK.

Regards,
---
Matt Bacon
Location Sound Supervisor / Production Sound Mixer

* The US list price to the best of my knowledge is $1995 (Standard CL-12) and $2995 (Alaia CL-12) which is roughly £1320 & £1980 respectively.
* The UK list price I have been told by more than one dealer to be £1950 +VAT (Standard) and £2850 +VAT (Alaia)

* Advertised online by an Italian dealer 1995 +Tax (Standard) and 2995 +Tax (Alaia) which is roughly £1420 & £2120 respectively.
* Advertised online by a German dealer
2380 +Tax (Standard) and 3620 +Tax which is roughly £1690 & £2570 respectively.

* Advertised online by two Netherlands based dealers 2235 +Tax (Standard) and 3395 +Tax (Alaia) which is roughly £1585 & £2410 respectively. 

SD CL12 Pricing Open Letter.pdf

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That letter pretty much says it all. I was wondering Matt, could you go to trading standards with this? I bet they'd be very interested in this saga. I might even bring this up with them myself. 

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Hey Bal, yes I have considered presenting my findings to Trading Standards and will do so should UK mixers be prevented from freely buying from Sound Devices dealers within the European Single Free Market.

I have just received this official reply from Ed Capp.

"Matt,
 
Thank you for your letter and expressing your views.
Sound Devices values direct dialog with our customers as we strive to provide first class products and service.
I believe that in our short history we have demonstrated a dedication to the advancement of products for the Production Sound Market and the support of our customers.
As an industry we are very fortunate to benefit from public forums to share thoughts on products, workflow , and technical support.
Note that Sound Devices does not discuss our pricing or our distribution strategy outside of our organization.
 
I can assure you we have made no changes to our pricing mechanics as it relates to the CL-12 or any of our products. 
One contributor to the recent pricing experience could be due to fluctuation in currency between the Pound, Euro and Dollar. 
We will continue to monitor and review our prices as we always do. I suspect that overall pricing in the region will settle and adjust to these fluctuations in the weeks to come.
 
Once again Sound Devices has no Agreement or Policy that restricts trade or is in conflict with EU Trade Law.
Our Distributors are assigned a territory and are responsible for creating and managing an affective Reseller Network for our products in that territory.
Their expertise  is focused on an individual market that includes supporting the Resellers and the products they represent. It is up to each individual Reseller to 
independently follow the trade laws as established by the EU and their respective countries.
 
As a consumer you have every right to be selective of the products you wish to purchase and where you wish to make that purchase.
We hope that you will continue to find Sound Devices products worthy of your investment.
 
Best regards,
Ed
 
Ed Capp
Vice President of Sales and Marketing
Sound Devices, LLC"

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It is up to each individual Reseller to independently follow the trade laws as established by the EU and their respective countries. 

Really? Sound devices don't care if their retail partners are obeying the law or not :-/

Sent from my Nexus 6 using Tapatalk

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^^ of course they can't. These are independent companies in their own right with their own business plans. Of course Sound Devices cannot ask their distributors to follow EU law, because that would be an insult, as that must be a given anyway. What they can  do is follow up on the issues presented here and ask their distributors about it or even start their own investigation. The only thing they can then do is go to another distributor. But that is not as easy as it may sound. These distribution companies are not lining up just waiting for SD to ask. This is a give and take relationship and depending on the size of the distributor and the market, it'll be SD who comes knocking on their door not vice versa. Of course, this still wouldn't justify unlawful behavior. 

I would suggest, Matt, to take things a bit slower. Allow SD some time to come to terms with this, a situation that is (if they are telling the truth) wholly unexpected for them, and to investigate this further with their distributors. The shops that told you no, are they the distributors or just a shop? Maybe it's the distributors who set these rules? Did you talk to Shure about this? Did you ask other shops in the EU about their policies? You only mention 2 shops. That's not exactly a robust statistic. Did you also consider factors other than import tax and transport? How's rent compared to other EU countries on average? What about other day to day costs? There may be many more factors at play here regarding the higher UK price. 

The alleged sales restriction is the crucial issue here. In the patent thread the manufacturers declared our niche to be special and them following certain unwritten rules. We as profrssional customers should follow their example and figure this out with SD and not take it to a tramding standards office or whatever - yet.

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Really? Sound devices don't care if their retail partners are obeying the law or not :-/

Wise answer Chris. This must be it! Companies don't care if their retail partners are obeying the law. 

Edited by Patrick Tresch

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Wise answer Chris. This must be it! Companies don't care if their retail partners are obeying the law. 

Ah yes our querulous little friend Patrick.

Still waiting on your list of companies that Zaxcom has threatened by the way, you never did respond to that post.

Here we have 2 companies that have claimed Sound Devices has told them they can't sell SD products outside of their own country which is in breach of EU law.

We have Sound Devices saying that is not the case and that it's up to the individual companies to comply with EU law.

If the latter is true and the 2 dealers in question are operating outside of EU law and claiming Sound devices has asked them to do so which is rather damaging to SD reputation. Sound Devices (who now know of this situation) feel they don't need to act on this then I think it asks serious questions of Sound Devices and who they chose to partner with.

Sent from my Nexus 6 using Tapatalk

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Sound Devices reply is opaque in the extreme. Do they not know, not care, or are just interested in avoiding any responsibility by passing the buck to retailers? What does 'assigning territories' mean, since the dealers are implying that it carves up their sales territories too. Does SD prohibit giving guarantees for their products outside of these artificial territories, which keeps the dealers in line? And if SD are now saying we can buy anywhere we like in the EU, which is the law, then why are their dealers refusing to sell to anyone in the EU outside of their territories? What does Mr Capp think about that - and no, it has nothing to do with fluctuating exchange rates, since UK citizens can purchase in euros?

It looks like SD and their network is clinging to the old model where EU countries were distinct entities in terms of trading laws, and think they can keep that model in spite of very clear EU single market policies. If SD deem that we can buy from any European dealer we like, then UK retailers are not going to be very happy that they are saddled with significantly higher prices than their EU colleagues. For the purposes of trade the EU is one territory - that is the point of the single market. What dispensation allow SD and their dealers to deny and ignore that?

Edited by macrecorder

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Oh come on... The EU is just a fancy name for a giant free trade we do whatever we want however we want whenever we want. Don't blame SD. The EU is a utopian thing. The only ones who benefit from it are the corporations. SD is hardly a great villian corporation.

Try and bring it up to EU law or whatever.

Skickat från min E5823 via Tapatalk

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It's not just sound equipment. If you try buying a London-Paris ticket on the Eurostar website, the price is different (higher) if you say that you're in Britain than if you say you're in France. Higher still if you say you're in the US.

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Who's the villain? SD, two shops? I don't think so. What if the distributors have agreed to not sell to every country with different prices, which would result in lots of confusion (regarding service etc.), instead splitting the EU map into several regions that are handled exclusively by one or few distributors each? Illegal or not aside, and this is pure conjecture, but I think we can stop assuming SD has some policy about this.

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It sounds to me as though Sound Devices have said to a French dealer, "yes you're the only company who will be given units to sell in France", said the same thing to a German dealer, and given both the idea that because of such exclusivities, neither should sell outside their country.

The real test is for a couple of enterprising people to start making phone calls asking about prices in and outside of these countries.

Edited by Lancashire soundie

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^^ of course they can't. These are independent companies in their own right with their own business plans. Of course Sound Devices cannot ask their distributors to follow EU law, because that would be an insult, as that must be a given anyway. What they can  do is follow up on the issues presented here and ask their distributors about it or even start their own investigation. The only thing they can then do is go to another distributor. But that is not as easy as it may sound. These distribution companies are not lining up just waiting for SD to ask. This is a give and take relationship and depending on the size of the distributor and the market, it'll be SD who comes knocking on their door not vice versa. Of course, this still wouldn't justify unlawful behavior. 

I would suggest, Matt, to take things a bit slower. Allow SD some time to come to terms with this, a situation that is (if they are telling the truth) wholly unexpected for them, and to investigate this further with their distributors. The shops that told you no, are they the distributors or just a shop? Maybe it's the distributors who set these rules? Did you talk to Shure about this? Did you ask other shops in the EU about their policies? You only mention 2 shops. That's not exactly a robust statistic. Did you also consider factors other than import tax and transport? How's rent compared to other EU countries on average? What about other day to day costs? There may be many more factors at play here regarding the higher UK price. 

The alleged sales restriction is the crucial issue here. In the patent thread the manufacturers declared our niche to be special and them following certain unwritten rules. We as profrssional customers should follow their example and figure this out with SD and not take it to a tramding standards office or whatever - yet.

Constantin I agree with many of your points. Following the publication of my open letter (above) I received a call from Jon Tatooles the MD of Sound Devices during which he and I discussed the matters at hand at great length. As a long-term support of SD (despite what some may believe) I am prepared to give SD the time to take stock of the issues raised and address them in a timely manner before seeking the involvement of the appropriate authorities. These are not matters that can be ignored or swept under the table as whenever a new product is launched their pricing will be subject to much scrutiny.

SD has a proven history of being a company that listens to its customers - I don't think it will be any different on this occasion.

In the meantime, if you live in within the UK or Europe and are intending to buy any SD products then you can now confidently contact other dealers within the European Single Market for a competitive price - you may even potentially save a great deal - knowing they CAN and WILL sell to you.

Edited by mattbacon
Incorrct spelling of John Tattles to Jon Tatooles

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Indeed Matt, bravo.  I've definately held off on purchases in the past because of the apparent price hike in the UK.  Your ardour in this matter is greatly appreciated.  I've long been a big SD fan and think they roll out the most solidly complete gear and want to buy much more!

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A salute to Jon Tatooles for reaching out to Matt. Well done Sir.

 

I agree.

Pinknoise Systems in the UK currently have the CL-12 for £1,541.67+VAT or £2,291.67+VAT for the Alaia.

http://www.pinknoise-systems.co.uk/sound-devices-cl-12-linear-fader-controller.html

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2 hours ago, Maxie Mendonca said:

can't we have an online buying directly from sound devices.

 

For purchases from India: 

1. For amounts higher than 1000 USD value, you need to have an Import Export Code (IEC). Only then can you wire transfer funds. 

2. With the new Goods and Services Tax (GST), it is possible for you to set off incoming Tax for your services against GST paid for your equipment purchases - something that you could not do in the past. Effectively you end up paying lesser than before in terms of customs duty and other local taxes. 

3. SD has dealers appointed in India, my company being one of them - so there is no reason why you can't buy your SD products in India easily and effectively. I speak for SD and someone from SD may kindly chime in here it they feel so, but I am pretty sure that the company will not start its own online shop for many reasons. 

 

-vin

 

 

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