I know I am late the party, but I want to make a post here while it is still somewhat on topic with the discussions that occurred over the course of the past weekend. The quick, TL:DR version of the difference in the pricing of the PM-1, HA-1 and all of our other products in Europe are due to the different distribution methods that OPPO Digital, Inc and our International partners employ. We are single tier (direct to the customer) while they are multi-tier (multiple distribution networks to the retailer).
Full Distribution And Price Statement (Click to show)
Here at OPPO Digital, Inc., in addition to designing and developing the products, we sell directly to North American customers and provide support and warranty services from our Mountain View office. Our product pricing is based on this direct sales model which eliminates the cost of multi-tier distribution and retail channels. This is the reason that we can offer these excellent products at the prices that we charge in the US. For in-warranty services, we normally provide the customer with a pre-paid shipping label to send the product to our Mountain View office, and we pay for the cost for shipping the serviced product back to the customer as well. This main-in service arrangement helps reducing the cost of hiring third-party service companies, and enables us to sell products at low prices.
For areas outside of the North America, we rely on international distributors such as oppo-bluray.co.uk to sell the products locally and to provide local support. The distributor may in turn rely on a network of local retailers to sell and service the products. The international distributors get the products at a price somewhat lower than the US retail price, but due to our operation efficiency in the US, the distribution price is not as low as traditional consumer electronics brands may offer to their distributors. We announce our MSRP, but do not and cannot decide how much a distributor or reseller may charge for their sales. Overseas retail prices often include the cost of tiered distribution and retail, which is normally higher than our North American direct-sale cost. The prices may also factor in the local warranty and support costs.
We hear what our European and Australian customers are saying about the prices, and we are definitely in communication with our international distributors about this. I am not here to defend the international distributors on their pricing, but just want to explain that our North American customers are really enjoying the benefit of our direct sales/service business model.
Regarding shipping directly to overseas customers, the cost and logistics of warranty service are huge concerns for us. We used to do that and when a customer encountered a defective unit, we would reimburse the customer the cost of shipping the defective unit to our Mountain View office. With the high international shipping cost, the cost of warranty service pretty much wiped out the little profit we earned from all direct international sales. As a business we found this unsustainable. Beyond that, the customers were often very frustrated due to the long service time caused by custom clearance delays, and they might be charged custom duty/tax again when the repaired products were returned to them. We still ship to customers where there is no local sales/support using our Offline Order Form, but we have to be upfront with the customer about the potential cost and hassle of warranty services.
With that said, this does not fix the difference in pricing, it only helps you understand why it exists. Which is why I pointed out yesterday, will point out again today, and will also reference the resent post by noxa: We will allow for the International sale and shipment of PM-1 headphones. At the moment we are working on the language for an updated Offline Order Form, and when it goes live, we will be able to process PM-1 orders for International shipping. There will be caveats, but I will be more than happy to discuss these through PM or you can discuss this further by contacting OPPO directly.
For now, let's return back to PM-1 impressions.