Hello everyone… Jim & Warren from www.onehitwonders.com here…

We are a Yahoo top service web store, and have been a Pronto vendor for nearly a year now, purchasing our products through Philip’s approved supply chains. We have enjoyed serving the Pronto community, and the relationships we have formed with many of you. Unfortunately, it appears that the old saying “All good things must come to an end” may be a truthful one…

As a result of a certified letter we received, we have spoken with Linda Bonar, Director of e-commerce sales at Philips. She informed us that Philips will no longer allow our company (and many others, possibly including your personal favorite web vendor) to market and sell the Pronto online. We have a limited time to remove the ability to order Philips products via our web site. According to Ms. Bonar, they have decided to limit distribution via the web, mainly to their “national direct customers”. When asked who this included, she mentioned Sears, Best Buy, Circuit City and Amazon (none of which appear to carry the Pronto online as of 08-02-00).

In speaking with various other Philips representatives in subsequent communications, we have learned that there are also a “few” regional vendors who have Internet authorization, although they did not provide any names. Also mentioned was the fact that they have sent nearly one hundred letters revoking Internet authorization to e-commerce companies.

While not passing judgement on the national direct companies mentioned, we would like to know your opinion on this situation…

Are these the types of vendors you want to purchase current and future Philips products from online?

Do you feel they are up to the challenge of supporting a product like the Pronto?

Are you confident that they are willing to properly manage back-orders when Philips slips into another “dry spell”, where no remotes are shipped for weeks or even months?

Do you think you will receive a fair price on Philips products from them?

Please post feedback to let us know what you think. We also encourage you to contact Philips directly to voice your opinion. Should you decide to contact Philips about this, please be civilized, as this is an important issue to all involved, and should be handled professionally…

I personnally want the best price possible. It has been my experience that the online sites for the large chains either have the same price or maybe slightly cheaper for alot of their products. I am unhappy to hear this coming from Philips, especially considering how coincidental it is to the impending release of the new remote.

I will not spend the suggested retail price that Philips is asking for this remote, given the historical documented problems of the remote and the Philips customer service on some of these issues. The price, I feel, is hyped for this kind of service. I may never purchase Philips products new again, if this is their stance.

Legally, they cannot prevent online shops from selling the products on the web. You may never be able to get access to Philips products from them online, but if you can purchase the products via a distributer, you can still sell them online. They may be flirting with FTC regulations if they restrict who can merchandise their products, at what prices, etc.

Not to mention that at least 3 of these do not even sell the remote in the stores: Best Buy, Sears and Circuit City. If you ask the salespersons, they do not have a clue about this remote. Only the high-end HT shops know about this remote, and even their knowledge is limited. I will have to check their sites, but I doubt they have them.

Well, the main question I have now is this....

"When will the PC hookup version of the OFA Mosaic be available?"

Philips, it was nice, we had fun, but "see ya"!

Rob.
http://www.hifi-remote.com/

What a sad day - for Philips. I am not sure what the motivation is behind such a move (assuming that the above post is accurate), but I can't understand the economics of it. Philips' only concern should be selling the most units at the manufacturer's price it sets. Attempting to control the price at which distributors/retailers/e-tailers sell the units and punishing those who sell at a discount just doesn't pass the "smell test." If they are doiong this, there must be another (profitable) reason for it - we'll just never know what it is.

Speaking only for myself - I would not have paid full suggested retail price for the Pronto. I could barely justify spending $300, let alone another $50-100 on top of that. I don't buy everything off the web, but when the discount warrants - I'll jump.

Philips will cut out an entire segment of loyal followers if it follows through with this plan. Those of us who praise their product will be drowned out by those who condemn this "anti-consumer" attitude.

As far as avoiding the Philips mandate by buying from distributors and then selling over the web - this is at most a band-aid for the gaping wound. One would assume that as soon as Philips discovers that a distributor is selling to an e-tailer, it will just send another batch of letters - this time to distributors.

Well, just my $0.02. If I were a stockholder of Philips, you bet your life that I would have some questions for the genius that came up with this idea. Oh well . . . .

Chas

Jim from www.onehitwonders.com again.

Just thanking you for the initial responses and letting you know what the letter states concerning a distributor (referred to as "Our customers' below) supplying an unauthorized website:

"If it is determined by PCE-NA that your company continues to sell Products on its non-authorized Website subsequent to 30 days from your receipt of this notice, we will take all measures available to prevent your acquisition of those Products so supplied. Our customers' failure to comply with Philips' Policy will result in PCE-NA's refusal to deal in or supply them Products resold by them to violator's of the Policy."

Keep the feedback coming!

Well, this isn't the first time Philips has done this. Just over a year ago an identical stunt was pulled, with letters, refusal to supply products, etc. Didn't go over well with the public back then. Sure, there's a few online vendors out there that probably shouldn't be selling the Pronto, but that should be handled on a case-by-case basis. Not this broad sweep of all online vendors -- supposedly to "protect" the big boys.

I too feel that this decision by Phillips is a bit narrow minded. However, I tend to use the internet to purchase commodity items that 1)probably will never require service or support 2)can't be easily damaged in shipping 3)are cheaper including shipping, etc. Typically, I'll be books,CD's etc online.

For items like a Pronto or other electronic gear, I use the Internet as a tool to gather information and to get an idea of pricing. I usually make those purchases at a local retailer to 1) support the local economy 2)have an avenue for support 3)build a relationship with local vendors.

Is the internet usually cheaper? Yes, because the cost of doing business is cheaper. If I buy a Pronto from a internet retailer, they're SG&A (sales, general& admin) expenses are typically lower. I expect my local retailer to be higher because I expect them to be able to add value after the sale. In other words, I don't look for the lowest price, but the best VALUE.

Regardless, I still believe that a company such as Phillips should support the free enterprise system and allow customers to choose where they purchase products.

I don't think this is much different than the big automakers preventing direct sales of cars through the net. Why? Because the local dealers will still have to support a car that wasn't purchased from them. It undermines authorized dealers and hurts them to the point where there won't be a profit.

I am not defending Philips, I just like to at least try to understand both sides. I don't see a problem with Philips limiting sales to authorized dealers. And if they find out a distributor is selling to "unauthorized dealers" then they have every right to stop selling Pronto's to that distributor.

As far as purchasing the Pronto from Circuit City, Best Buy or Walmart (yeah,right!). I would have done that in a heartbeat before buying mine off the web. The Pronto is not typically the type of thing I like to buy on the web, but I had little choice. That is why I bought mine from an authorized dealer that I found about in this forum. Good price, good support.

Personally, I think Philips may just trying to protect the reputation of product and service (however good or bad that is). But more likey they are just trying to make the thing more available. They are mistaken though, if they are doing this simply to sell as many at MSRP as possible. Stores like Circuit City and particularly Best Buy have buyers that will eat them for lunch!!! Sharks, they are doncha know! Good for us! I have never found a deal on the web that was good as a sale at Best Buy. Never had problem returning anything either. Just bought an open box DVD for only $109!!! It had no remote, but who cares! I have a Pronto! Heh heh. Seriously though, that was a $200 DVD player they were selling for $109 simply because it had been opened and the remote was missing. And because I was buying from them, I knew I wouldn't have any problems returning it if there was a problem. Plus they even threw in their $20 DVD calibration/demo DVD thingy for nothing!!!

So long story short, I do feel bad for onehitwonders.com, I really do. I have much respect for Yahoo shops. Always a good deal, and incredible service and support from all Yahoo shops. I shop Yahoo shops exclusively at Christmas. I think they are getting a raw deal. But I tell ya to be honest, if the Pronto had been available at Best Buy and it was within $50 of the price I paid through online sources, I would have gone to Best Buy (even though the sales people are dumb as rocks for the most part, but certainly better than Circuit City where they are dumb AND obnoxious).

Summary: Hey Philips! It's kewl that you want to go with big chain stores, and we know they probably put pressure on you to limit web competition, but we don't like it!!!!

Does that help?

Mark

Mark states:
"I have never found a deal on the web that was good as a sale at Best Buy"

LOL ! Then you need to learn how to use the Net and the search engines. You can find a better price for pretty much anything that Best Buy sells.

Also, does this policy include the RC5000 or is it just the Pronto ?

Kevin-
I agree with Mark's words. He's not saying that he's never found a lower PRICE on the web, but saying he's never found a better DEAL on the web. To me, and probably to him (sorry Mark if I'm putting words in your mouth), a deal is more than just raw price. Like I said in my post above, VALUE is important. The ability to walk back into a local retailer with a problem does add VALUE, and to some of us, that's worth a higher PRICE!

I'm not terribly surprised by this. I really think it has little to do with reputation and customer support. Undoubtedly the prime factor is profit. A senario that is common the audio/video equipment market is for manufacturers to refuse to provide warrantee service if their products were purchased from unauthorized sources. If this is legal or not has been the subject of much debate, yet it is still happens. Usually the justification for this policy is to protect the dealers and consumers alike. Since many of these manufacturers don't take action against the distributors who sell to unauthorized dealers, the motivation is painfully obvious. They get to sell product yet don't have to provide warrantee service. Net result, better profits. If Philips next step is to adopt a policy of no warrantee unless purchased through an authorized dealer, I'm pretty sure what their motive is.

Jim L

I think its great!! And about time. Many excellent companies have resell agreements to protect their vendors. This will not be the end. Companies don't like to bite the hand that feeds them. How many taxes go unpaid because of E-commerce?? Yes,. Uncle Sam is wrestling with that one.. A company who sells his product direct? Watch the resellers drop it like a hot potato!

As I've stated before.. I guess that now it's a crusade.. Support your loacl economy!..

Flat tax ... YES!

I won't consider a Pronto sale if Philips imposes the 'price fixing" policy mentioned. I think they are treading on thin ice, legally speaking.

Hey Jay,

I love reading your posts and agree with you on many issues, but I think your a little overboard on this. You missed the point, the object of reseller agreements in far too many cases is to screw both the dealers and consumers alike. Do the e-tailors go away, hell no, the company turns a blind eye to the distributors who violate the agreements. The result is sales are not adversely impacted because everybody is still selling the item. If the consumer needs service the first question he's asked is where he bought it, oops sorry not an authorized source, warantee void. This is not good for you or me.

Sure, some companies are trying to protect their vendors, but others with similar agreements are not. Want examples, Acoustic Research for speakers. Go to their website. No mention of the fact that warrantee is only valid if purchased from an authorized source. You find that out after the purchase. Think that's great, you can find these speakers available from tons of non-authorized sources. Think AR is aggressively trying to rein in their distributors? Not a chance that would impact sales. Both the vendor and consumer are injured. Want to get a little closer to home, silver Prontos are not waranteed in the states by Philips, think Philips is beating anybody up to stop them from being re-imported into the States? I doubt it.

You are quite concerned about local communties drying up due in part to economic pressure from the net. I am sympathetic, really. However, I got a couple of decades on you and watched this happen in my town before you were born. Know what did it? A mall outside the city limits. Wouldn't seem like much of a threat today, but back then people were saying the same things you are. Progress hurts sometimes. Bottom line for me is companies behave according to what is in their own economic best interest, so do vendors such as yourself, and so will SMART consumers. It's really quite simple if you think about it.

Jim L