Currently we are trying to work out with DROP on this, but until an agreement is struck between DROP and LETSHUOER, we will not be servicing them. I know this is not going to sit right with everyone, but I am open to answering any questions of why we made this decision. Thanks.
Joseph @ LETSHUOER
I’m confused… a manufacturer/oem builds a product but then determines to honor a warranty period depending upon retailer? I get if it’s counter-fit or stolen inventory… But even in a retail environment where there is a MAP (minimum acceptable price) typically the OEM has penalty/recourse with the retailers/seller and not the customer.
This happens often with Drop. They’ll buy another retailer’s stock and resell it. The manufacturer doesn’t necessarily know who that is because Drop might not want to tell them. Part of the relationship with the authorized retailer is often that they will provide first line support to the customer, so in this case Drop should take on that role, but there is no agreement in place. Or something like that.
You’ll see it on any manufacturer’s website that warranty is through authorized dealers.
Dealers sign contracts, do marketing for the brand, provide customer service, commit to purchasing and stocking inventory and all number of other things.
Drop in this situation did none of that, bought the goods grey market and does not mention that on their product page so they are passing it off like its an authorized deal in collaboration with Letshuoer, which its not.
So when customer’s buy this, have issues with it and turn to Letshuoer, they get to deal with Drop’s mess without the support they would get from their dealer network.
This is why warranty claims always ask for proof of purchase and a serial number.
Drop seems to do this frequently, and then not explicitly state whether or not the manufacturer or “Drop 90 day” warranty applies.
You should always assume with them that unless explicitly stated, full warranty does NOT apply.
I think this is a shady business practice on their part, and that is why I basically won’t do business with them anymore.
yeah, me too. There aren’t many good deals anymore either.
I wouldn’t say that buying from the gray market is inherently shady – it all boils down to specific details and marketing language. Some authorized err…Rolex dealers are notoriously difficult and tricky too, so the buying experience can be miserable. Many manufacturers also set a Minimum Advertised Price (MAP) to avoid supply vs. demand fair market pricing, and this is not at all consumer friendly either. “Add to cart to see our price.”
I respond on a case-by-case basis. Manufacturers sometimes miscalculate market demand and end up with extra stuff, or have to clear stock for a new model. The items have to go somewhere, and it’s better that they enter the gray market than be ground up and melted down. You can get a good/fair deal for all involved, just read the fine print to know what you are in for.
History - at it’s peak in the 1970’s there was a LOT of Grey Market product sold in the camera business, by dealers that became big names and had large ads in the photography magazines.
I remember instances of manufacturers refusing warranty work on cameras and being ripped in print for it. In some cases they lost noticeable amounts business because they wouldn’t warranty the non-authorized product.
This isn’t anything unusual, it’s just being brought to light by @LETSHUOER 's post.
Thanks that is a super helpful explanation!
To be clear, grey market goods are not purchased from
manufacturers. They are purchased from 3rd party resellers. The proper thing to do as a retailer if you have overstock is to let the manufacturer know and work out an arrangement with them, whether that’s buy back, a sale or otherwise. The improper thing to do is to tranship those goods (an immediate contract termination) to another reseller to allow them to undercut all the other dealers who have hired staff, paying warehousing fees to stock the items, are investing in adspend along with evergreen content and are in place to support the product on behalf of the brand. What Drop is doing in this situation is absolutely shady and they should be rightfully called out for it since it’s not like it’s a one off.
Drop buys grey market Chord Mojos, cuts off serial numbers
Drop buys grey market Audeze, Audeze calls them out
Beyond that, you’ll notice a pattern of Drop never accepting the blame but continuously trying to put the blame on the manufacturer with the hopes that people have as little knowledge about how things work behind the scenes.
A good example is the Focal Elex pads that were shipped as singles.
Every Focal retailer knows that all Focal ear pads are shipped as singles. It’s also evidently clear when you receive the plastic bag that there is only one ear pad inside of it. Yet, hundreds were shipped and then it was “woopsie, that was Focal’s fault not ours for not noticing. Please direct all anger towards Focal”.
As far as the comments around MAP pricing, you may not like it but its MAP pricing that allows people to have the opportunity to go to B&M stores to demo gear, allows stores to buy things like G.R.A.S or B&K rigs for their content team and invest in community.
A race to the bottom is extremely short-sighted and hurts the consumer in the end as well.
Absolutely, I 100% agree.
To use a specific example, B&H Photo explicity states when a product is “gray market”, or “non-US warranty”, or “B&H warranty”. I respect that, and do business with them. I have purchased both types of products from them.
It’s all a matter of how a company conducts its business…
Thanks for the details. I agree with much of what you say, quoting myself: “I respond on a case-by-case basis.” I’ve not paid attention to Drop’s inner workings.
Regarding MAP, I put it in the seller-friendly practice bucket along with mail-in rebates, bundling a desirable item with a dog or too many accessories, ‘free shipping’ with surprise processing fees, teaser credit offers with tricks, etc. Every transaction is a negotiation, even if one party doesn’t realize it or if the parties don’t engage in face-to-face offers and counteroffers. There are buyers markets and sellers markets, and the rules shift with demand and the economy.
I’m not at all seeking a race to the bottom, and I avoid dealing with bottom-feeding sellers myself. There can be good or bad behavior on both sides of every transaction.
What is Letshuoer’s warranty policy? And where is the list of authorized retailers? Because there is zero info on its website.
My issue is that warranty policy needs to be documented and transparent. Here, there is zero baseline. Letshuoer is just “randomly” moving the target/policy.
Is this the type of company I want to deal with and spend my money on? Maybe in the Chifi market, price is everything; consumers can overlook this; and companies can also get away with this.
I just want to comment on the market pricing. It is against the law for manufacturers to dictate the market price directly.
However, it is within the law for the manufacturers to decide who they choose to work with as authorized retailers. If authorized retailers sell below certain price, advertise below certain price (MAP), or sell their goods to 3rd party resellers, then manufacturers can decide to remove those retailers.
Sometimes authorized retailers are caught with extra stock that they cannot sell or return to manufacturer. And they cannot officially sell below certain price. So they will remove the serial number (so units are not traceable) and sell to 3rd party reseller, either for smaller profit or to minimize their losses.
With Rolex, the different issue arise in that market price is higher than MSRP. But authorized retailers cannot take advantage of that. So they will sell to 3rd party reseller at higher price. And 3rd party reseller will then sell at even higher price to consumer.
You can find the warranty policy transparently documented here: Refund and Returns Policy – letshuoer
There are a couple things I think you are misunderstanding here and I wanted to take a moment to clarify them for you.
Letshuoer is not dictating market pricing here. This is strictly an issue regarding grey market products and a dealer who is not authorized by the brand.
They never “randomly” moved the target/policy. It is DROP that is breaking the rules here by selling grey market items an acting like they are an official dealer, not Letshuoer.
ChiFi brands are actually quite good at keeping MAP. Not sure what that was intended at.
Hope that helps clarify things.
I’m assuming this got worked out because Letshuoer posted something on their Facebook page that said they will honor warranties regardless of where their products are purchased. LETSHUOER
Yes, it did. I was unaware at the time of my follow-up!
Thanks for this info. It seems the entire 3rd party reseller issue is not yet resolved. But Letshuoer made this decision to honor the warranty. This is great for consumers. Great to see that Letshuoer will stand behind its product regardless.
This grey market business is undoubtedly shady, and needs to be called out on their site and elsewhere.
On the other hand, these are the guys that gave us stuff like the HD58X, HD6XX, HE-4XX, Meze 99 Noir, Elex, and last but not least, my all-time favorite, the TH- or TR-X00. I wish they’d just stick to that kind of business.
I think (Mass)Drop’s fate was sealed when the original equipment manufacturers (e.g., Shenzen Audio) figured out Drop’s business model. Many OEMs decided to sell competing items and cut out the middleman. Apos Audio was born as a direct sales channel, people could also get stuff from AliExpress, etc. These changes went mainstream after the THX AAA 789 was a big hit, and as people waited and waited and waited for the 2nd batch. It was pre-COVID so there was no clear reason for the delay, and by the time the 2nd batch of 789s arrived Topping and SMSL and others had similar products available.
Drop’s move to gray/shady stuff may follow from the lack of profit to be had. Chinese products are solidly established today, so they don’t need a bootstrapping middleman. Sennheiser (not Chinese) changed its fate with the 6XX…and perhaps damaged its profit margin and reputation and business model. The first batch of 6XXs was limited to something like 5,000 copies “for Massdrop members only” but sold out instantly. Still, the 6XX greatly expanded the audiophile headphone market.