# Manufacturer overproduction and the sad effects on local markets



## Allan74 (Jun 17, 2010)

I don't know whether to feel good about this or bad.....

I guess you can chalk it up to the old adage "Be careful what you wish for..."

It's no secret that I use Ebay and like everyone else, I am always looking for that unreal deal to make my day. Unfortunately as of late, things seem to be getting a bit out of control.

Now, before I begin, I want to clarify that my use of terms like _'Less Developed_' or _'Economically Challenged Regions' _is BY NO MEANS me staring down my nose, from up on my high-horse.....or the like. This is NOT me being a dick about things....it simply is what it is.

Moving on.
Over the last year in particular, I have noticed a strong influx of Elettromedia products hit the pages of Ebay - more specifically, Hertz Speakers - and even more specifically, the most popular Hertz Speakers/Components, with the odd Audison Amplifier.

As of today, with using the last 3-odd years as a general statistics gathering pool (_as well as alot of common knowledge_), some may disagree, but it would be fair to say that the 2 most popular Hertz Component kits in North America are and have been to date, the _pre-2008 HiEnergy HSK-165 Components _and _the current Mille MLK-165 Component kits_.

4-5 years ago, after purchasing my first set of HiEnergy HSK-165 Components at my local distro for $500 CAD at the time (_AudioConcepts Mobile, Calgary, AB_) then another 2 sets for $600 on clearance more recently, while the store was changing hands and on the brink of a huge line changeover, you could say that I was less than pleased to find the same product on Ebay from Malaysia for less than half of what I paid.

Obviously at this point, the speculation began as to if they were counterfit copies etc, but in the end, as it seems, they are all nothing more than Manufacturer Overproduction, with the Manufacturer dumping them out the back doors into (as I mentioned above) Less Economically Developed areas etc in an attempt to sell them cheap and recoup some of their costs.

What the Manufacturer didn't forsee was the Worldwide power of Ebay and that same product finding it's way back into mainstream markets, only to compete with their current offerings and undercutting everything and everyone in the process.

*Fast forward to yesterday......*

*(current model) Hertz Mille MLK-165 Components on Ebay.com - $330-$350 USD including shipping.

(pre-2008's) Hertz HiEnergy HSK-165 Components on Ebay.com - $102-$130 USD including shipping.

(current model) Hertz HiEnergy HSK-165 Components on Ebay.com - $230-$300 USD including shipping.

(current model) Hertz Energy ESK-165 Components on Ebay.com - $140-$160 USD including shipping.*

Where are all these speakers coming from ?
Well, they are being sold out of Malaysia.....but where did they originate from ?

Now, don't get me wrong, I have no problem Ebay shopping, but when it comes to Hertz speakers, I (for myself) have only ever purchased on Ebay Italy a couple times, from an actual brick/mortar shop who also lists product on Ebay. I don't use this as an excuse to justify my grey market purchases, but I do feel atleast a bit better than buying elsewhere on the Internet. I now purchase from that and another store, direct, no Ebay anymore.

So, who is to blame for the Hertz market being completely demolished in North America, thanks to bargain-basement prices on Ebay ?
The sellers from Malaysia ? I would think not.
This is, plain and simple...the fault of 'creative' liquidation of overstock or over production that seems to land right at the feet of Elettromedia themselves.

It's pretty safe to say that for the most part, most Hertz speakers ain't worth **** in the North American marketplace.....and are by no means anymore exclusive a brand than Pyle, on Ebay anyways.

*If I was a North American Hertz Dealer, I would be PISSED....and voicing that right back to Elettromedia.*


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## W8 a minute (Aug 16, 2007)

I would suspect counterfeiting. How do you know they're legit?

On another note I've said the same thing about Kicker. I find it hard to believe they can't figure out where the 1000's of amps and speakers on eBay come from. I think they know but they just don't care. A sale is a sale to them. 


Sent from my iPhone using Tapatalk


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## NSTar (Feb 24, 2010)

It's worth air... I mean, if it's sounds good then it's good. If gold were on sale for $10 an ounce and iron were $50 dollars an ounce, I would choose gold 

after all, whatever the price is currently, it's still what it is. If those Hertz sound good..then more power to the consumer. ... it may affect someone's resale though.

If you want, I can sell it to you at an inflated price.


really, I think they should consult a diamond cartel. LOL


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## ss600r (Mar 8, 2009)

Last time I tried to buy something from ebay I had to end up getting money back from paypal. I dont see me taking the risk of buying something from Malaysia even I might be able to fight and get my money back.
Has anyone ever proven any of those Hertz to be faked?


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## NSTar (Feb 24, 2010)

ss600r said:


> Last time I tried to buy something from ebay I had to end up getting money back from paypal. I dont see me taking the risk of buying something from Malaysia even I might be able to fight and get my money back.
> Has anyone ever proven any of those Hertz to be faked?


Would love to know...anyone know of anyone who bought them?


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## ss600r (Mar 8, 2009)

Allan is right about things like this hurting the brick and mortar sotres though, but then again any online biz hurts local stores.


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## Genxx (Mar 18, 2007)

This is a classic case of what happens many times when companies use a distributor or sale to a distributor.

It has happened to many of the car audio companies. It sucks for the B&M and does effect the company also. IMO It has just become part of the game/industry its a risk the car audio companies have to decide if they are whiling to take.

The brands you see less on ebay are the dealer direct companies. This is the reason you do not see HAT, Zapco and others in bulk on ebay, like you do Kicker, Pioneer, RF ect.

Just remember 99% of the time you get no warranty off ebay or possible fakes. You have to decide if you want to take the risk just like the companies using a distributor.


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## Allan74 (Jun 17, 2010)

There also seems to be much more markup on certain Elettromedia products than others, perhaps due to popularity, supply/demand, higher production runs equalling lower costs....or whatever the case may be.....as if it were functioning just to help keep them in a certain hierarchy or class, as it were. Everything 'Audison' seems to be expensive, while Hertz are all over the 'pricing map'....

If that is in fact the case, it's never been more evident than it is/was with the Mille MLK165 Components or the HiEnergy HSK165 Components.....according to Ebay & the Grey Market anyways.

*For instance, direct from Italy.....*
I paid nearly as much for my ML1600 Midbass drivers by themselves, as I did my complete MLK165 set of Components (_Tweeters, Mids & X-overs_) from the same dealer.

As I have recently found it advantageous to buy Hertz Mille & HiEnergy speakers direct from Italy, it seems as though the ONLY Audison products that are cheaper over there are speakers. The Amplifiers and the BitOne are actually ALOT MORE MONEY (on average), by the time you factor in the costs of shipping/duty/taxes etc. Hertz Amplifiers on the other hand are cheap, even after shipping/importing fees etc.

*I can say this for certain....*
Having my MLK165 Components worth nearly nothing, thanks to recent Ebay developments is one thing, but the day that I see the rest of the Mille lineup (_such as ML1600's, 500R's, ML280's etc_) up for sale at bargain-basement prices in large quantities on Ebay....will be the day that I will know for sure that it's time to move onto something different....LOL...REGARDLESS OF HOW MUCH I AM IN LOVE WITH HERTZ 

If it looks fishy, smells fishy.....then it's usually fishy


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## The Baron Groog (Mar 15, 2010)

10yrs ago, before the internet, car audio was all small brick and mortar dealers, since the advent of the net price has become king and people buy off whomever is cheapest.

This has had a knock on effect for the consumer, both good and bad:

Good, same products for less money, products available next day from anywhere

Bad, "box movers" supplying the product instead of specialised dealers which leads to the B+M dealers shutting their doors as they can't compete on price, loss of knowledge within the industry, loss of interest in the consumer, smaller market, less products, less high end products, more focus on price then product-the list goes on!

Unfortunately the retaillers are to blame-the manufacturers cannot set prices, they may introduce sales terms and advertising terms for their dealers to prevent them advertising the product at too low a price online, but ultimately the retailler governs the price the product is sold for. 

In the UK a few large online companies, some with retail premises, control the price-because they sell large numbers of products they can still make money on a small profit margin and working in the industry I know some only make money on their "retro" (payment made by the manufacturer to the retailler for paying his bills on time, typically 3%) and will quite happily "loss lead" with complete ranges of products (read Japanese) in order to make money by switching you to more profitable lines or selling accessories. The more aware the public is of the product the more likely it will be sold cheap, hence the wide range of Jap gear at just above cost!

Interestingly EM products are sold through Four Dealers in the UK. This allows Four to maintain the price for both themselves and also the dealer-making price slashing impossible and allowing small, highly skilled, B+M dealers to still make "good" profit on these more "exclusive" brands and not have to worry about competing with companyX online.

EM are devaluing their own product if they are dumping in Malaysia, however their US/Euro dealers are still making good money on them and more importantly for EM they're still making good money on it-it's got to be hard to find a decent balance between maintaining your exclusivity and selling lots of product.


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## W8 a minute (Aug 16, 2007)

I agree with most of this but i think the consumer is MORE educated not less educated. The consumer now has the ability to google the manufacturers instead of the brand names. Many brand names are mearly middle men between the customer and the build house and the end user is too smart to pay needless mark up. This also applies to supply houses, distributers, and the B&M who 9 times out of 10 is nothing more than a salesman. 

IMHO I don't need any of them. Design it, build it, show me the honest specs or a third party review and I'll make my own deciscion. 


Sent from my iPhone using Tapatalk


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## will3 (Aug 13, 2009)

All this pretty much hit the nail on the head, in regards to the current 12v market place , the internet has had both postive and negative effects on the industry and consumer knowledge , sadly because of the internet we have moved from a performance driven industry into a price driven one ,with more and more high end manufactures caring less about development, and quality and more about price point.
And I will add it is not just the nets fault , the distributors, manufactures, and B&M stores played a hand in all this as well.


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## The Baron Groog (Mar 15, 2010)

The extreme consumer's are more educated, thanks to forums like this, what I meant is that unfortunately the mass consumers (mostly 17-25yr old males in the UK) are less aware of the product and more aware of the price-they put little emphasis on quality and lots on the BS marketing, what their mate has in his car and what looks cool rather then sounds good.

In the UK we used to have a huge sound off at Earl's Court-one of London's premier event venues-but the market no longer supports it, sound offs are still held but don't recieve the publicity they once did. Most of the manufacturers demo cars sound like ****-they're loud, they look good but have no stage, poor tonality and only serve to impress spotty teenagers who clearly know nothing about audio let alone SQ. Show the same system to a home Hi-Fi geek and he'd probably just curdle up and die. This just goes to reinforce peoples view that car audio is just for chavs (trailer trash) and drug dealers as when they go into a store (halfords is the UK's largest car audio retailer) and are given bum advice they leave with a sour taste in their mouth and don't look into car audio any further.

The big retailers aren't concerned with the product, just the price/profit so have untrained staff who couldn't tell you the benefits of one product against another and will just tell you prices not useful specifications.

The B+M dealers, while still salesmen, inspire people to go further and pursue a quality sound and installation-while profit is still important for them I'd warrant that they have more of a passion for the product and this is what sells it and gets the guy who was just after some new speakers to buy a full system and then spend years adding/changing and coming back to the same dealer-unfortunately without the manufacturers supporting them by allowing them to maintain a decent profit margin they will disappear, leaving the car audio carcass to be torn appart by the online vultures.


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## FAUEE (Jul 22, 2010)

In regards tot he Hertz thing... A lot of what you're seeing is likely very well made forgeries, as is apparently becoming common with Focal. This is already a HUGE thing with headphones. Pretty much every name brand pair of headphones on ebay (things like Sennheiser, JBL, etc.) are fakes. There's an entire website devoted to people buying these headphones and figuring out if they're fakes or not. Typically the fakes will look the same, but they are not the same,and don't perform the same. They're largely aimed at the "enthusiast" market as well, higher end gear that commands a premium and gets sold online for MUCH less (ie $100 headphones for $20 + free shipping from China).

The market for car audio is shrinking at an exponential rate these days. A decade ago you couldn't really get a nice sounding stereo system in a new car, there were a few higher end cars that weren't terrible, but subwoofers were found pretty much only on flagship luxury models. Now EVERYTHING has at least 1 factory sub, and most cars offer an upgraded sound system that's pretty good. Mitsu & Nissan + RF, Chrysler + Kicker & Boston, Ford + Sony, heck even Hyundai's newer Infinity systems aren't terrible. Add to that the replacement of a radio becoming increasingly useless, expensive, and ugly and the demand is shrinking significantly. We're also living in a time of reduced discretionary income, the internet being a MUCH larger part of every day life than ever before, and higher operating costs with lower margins.

Car audio will never be the same as it used to be. Many companies will shut their doors if they don't adapt. Especially at risk are the smaller companies that require extra work to find them. Smart companies will seek to reach out to the car makers and make them a large part of their business. The Harman group has already had huge success doing this, whoring out almost every brand they own to someone (Infinity, JBL, H/K, Martin Logan...)

On the actual aftermarket front, the brick and mortar stores are likely screwed. I don't expect there to be any large chains that carry car audio in store outside of a small selection for "emergencies", and installs will be either expensive specialty shops or budget all-in-one places (like Pep Boys). It's just not possible for a b&m store to compete with something like SonicElectronix, which sells items under other retailers' cost in a lot of cases, with free shipping. They're able to operate on razor thin margins because they do a huge volume and get discounts and perks for their huge volume as well. Heck, they sometimes have items 70-90% off MSRP, and they're definitely not losing money on them.

B&M stores go 2 routes, they try to wow people with great service but charge higher prices and sell the highest end most protected brands they can (JL comes to mind), or they give in, hire minimum wage newbies and sell cheap crap trying to almost compete on price. Of the two, only the high end has any chance of working.


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## Allan74 (Jun 17, 2010)

Here's another couple points to think about:

Most of the companies products that are being 'forged', never began production in China, but decided to move there for the benefits of a freely exploited cheap manual labour force.

China, as a people, are not stupid. They can do the math. If they are shipping out @ a price of $25/unit to Hertz, or other companies for a product that easilly demands 10x that on the open market (say, $250), why wouldn't they open up their back doors and sell to the black market for $50/unit.....essentially doubling their money ?

Doing this might have the product miss that final all-important quality control phase, therefore, shotty products adding extra needed leverage to Manufacturer's claims of forgeries due to sub standard product at times ?

We can speculate all we want, but some things just seem to make more sense than others.


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## FAUEE (Jul 22, 2010)

It's also highly likely that the "forgeries" are in fact legit products that failed quality control and were "destroyed".


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## illcrx (Nov 11, 2010)

Yes I do find it rather interesting that companies like woofersetc.com and ebay sellers and others seem to get all the product they need to conduct business yet the manufacturer has no knowledge nor cares to actually do something about it. 

The same is said for the home audio industry, so many "unauthorized" sellers get product and I get a hard time from my wholesaler because I have a legit problem and I STILL have to jump through hoops to get a warranty issue resolved. Most of these companies dont care about anything but their bottom line and leave the consumer in the dust. Its all ******** and I wish someone would say they have to service everything that comes their way if its their product backdoor or not. This way they have to pay attention to whats going on with their manufacturers, that'll get some of the dealers making products in the states again Im sure of it.


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## Angrywhopper (Jan 20, 2010)

FAUEE said:


> In regards tot he Hertz thing... A lot of what you're seeing is likely very well made forgeries, as is apparently becoming common with Focal. This is already a HUGE thing with headphones. Pretty much every name brand pair of headphones on ebay (things like Sennheiser, JBL, etc.) are fakes. There's an entire website devoted to people buying these headphones and figuring out if they're fakes or not. Typically the fakes will look the same, but they are not the same,and don't perform the same. They're largely aimed at the "enthusiast" market as well, higher end gear that commands a premium and gets sold online for MUCH less (ie $100 headphones for $20 + free shipping from China).
> 
> The market for car audio is shrinking at an exponential rate these days. A decade ago you couldn't really get a nice sounding stereo system in a new car, there were a few higher end cars that weren't terrible, but subwoofers were found pretty much only on flagship luxury models. Now EVERYTHING has at least 1 factory sub, and most cars offer an upgraded sound system that's pretty good. Mitsu & Nissan + RF, Chrysler + Kicker & Boston, Ford + Sony, heck even Hyundai's newer Infinity systems aren't terrible. Add to that the replacement of a radio becoming increasingly useless, expensive, and ugly and the demand is shrinking significantly. We're also living in a time of reduced discretionary income, the internet being a MUCH larger part of every day life than ever before, and higher operating costs with lower margins.
> 
> ...


I agree with alot of this. I had a discussion/debate with a few forum members on this site months ago about the net and b&m retailers.

If B&M stores go under, I predict that many car audio manufacturers close their doors. The general public and majority of car audio buyers go to the stores to buy their product and installation. Many do not know how to install or don't have the time to do it. Car audio will become a luxury that only enthusiasts will purchase and take the time to become educated and install the products. Most manufactueres will not be able to survive solely on enthusiasts purchasing from online retailers.


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## Sound Suggestions (Dec 5, 2010)

Just a case of a manufacturer being able to sell products at a higher cost to the American market because they can, the market here will support the cost because we can afford it, I see the same trend in another industry that I am involved in. We pay more because we will, others pay less or they wouldn't buy otherwise. The sad part in all this is that we generate most of the profits to these manufacturer just for them to turn around and distribute their products world wide to get their brand name recognized. To be able to purchase the same products from malaysia at a lower price from eBay (due to the power of eBay) is ashame and is the reason why ultimately local distributors and ultimately these manufacturer will eventually be out of business. Just my 2cents.


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