+1

 

There are definitely good arguments in this thread. However I wanted to point this out -

The R&D costs of developing any product is fairly substantial. Toolings, design, testing make up the vast majority of the underlying costs of a product. A very famous wheel manufacturer once told me "Making a wheel is like baking a cake. Once you have the ingredients down, you can keep making them for very cheap."

So yes, the US importers do have to transform a percerntage of their gross margins into advertising. But for the most part these firms do NOT have to absorb R&D cost. On the majority of "high performance" products, especially wheels and electronics, once fixed costs are paid for the unit cost is virtually nothing.

There are many many global firms that do not have a grey market problem through smart pricing and infrastructure strategies. I'll name a US firm that you all know - Greddy. They do not have a serious grey market problem.

So the question I pose to you is - what is the reason for the excessive price difference between the United States and a country 5500 miles away? If you think about it there are only two reasons for this.

1. Operating / economic inefficiencies of the US firm. This could be for any reason, whether they are being "ripped off" by the Japanese firm or that the US firm's infrastructure costs are not congruent to the product they are selling.

2. Profit maximization - When the perception of a JDM product is a "premium" product firms will keep prices unnaturally high to maintain perception of brand value. This is why the exact same purse but with a "Prada" logo will fetch $1000 more than the one without.


As for the warranty issue, while it may be a problem on a larger scale, chain stores like Costco, Walmart, Kmart, Fry's, etc. will usually take the warranty burden on themselves. For smaller business, especially in the high performance industry warranty often becomes a difficult process REGARDLESS of whether the product is gray market or not. The reason for this that even the "big name" manufacturers often do not or cannot service the product in house. We have had customers return for warranty legitimate authorized products such as gauges and wait over SIX MONTHS to have the gauge repaired. Often times we have found it more efficient to send a USDM gauge directly back to the manufacturer in Japan via airfreight and have it repaired in a few weeks!

Not all companies fall 100% into this mold. But it is something to think about.

Cheers,

Gary
Gruppe-S

 

Interesting information.

Although if we were all being really honest, the warranty on most of the items that come from Japan are really nonexistent. From my experience in the past, the "warranty" is more a marketing device than an actual tangible item. When you try to use this so called warranty, you just end up running into a lot of red tape and B.S. and in the long run, you might as well just buy another part rather than thinking that the honorable manufacturer is gonna take care of you. Just my .02

 

Great post! The question that I have always had is why don't the "real" manufacturers go after the makers/sellers of the replicas? I realize that in some cases it may be difficult since they are not *exact* duplicates. One prime example would be the eBay seller that is selling "Bride" seats that actually have the Bride logo on them.

 

It seems like all the vendors in this thread are very anti-grey market. This also tells me that the negative impact of grey marketing effects the vendors bottom line and is probably beneficial to the consumer in most cases.
Just my .02

 

Woah, big misunderstanding there. These are not "replicas" or "knockoffs". That is trademark infringement / dilution and covered under US trademark law (and is completely illegal). This is the importation of genuine Japanese products just by companies that are not supposed to be importing it.

For example all NHTSA approved R32, R33, and R34 Skyline GTR's in the United States are "grey market." They are real Nissan cars, just have not had the permission of Nissan USA to import.

It's a big difference!

Gary
Gruppe-S

 

grey market and replicas FTW!!! LOL joking

nice write up

 

i guess if the product is authentic and one can save a bundle, people would still consider buying grey market....same with auctions, a calculated risk is involved.

 

Exactly right - big difference between grey market items and knockoff items.
Caveat emptor in either case...

 

^ +1

 

Indeed, let the buyer beware.

Then again, let the buyer beware with any purchase from anyone (not just grey market, you gotta use your brain when spending money).

Although cliche, if its too good to be true, it really usually is in this industry (or there's some kind of catch).

I'm not a fan of taking that kind of risk with my hard earned money.

I try to buy pretty much everything in person for anything I purchase, makes me feel better.

 

Great thread, but now maybe we should get down the distinctions of who those authorized distributors are. Often they can be found on the manufacturer's website to indicate whom the contact is for the US market in the case of Japanese companies. I'll get the list going with what I know off the top of my head.

Nismo - Nissan Dealers Only
Rays Wheels - Mackin Industries
Project U Brakes - Mackin Industries
SSR Wheels (Speed Star Racing) - Tire Rack
Cusco Products - Bozz Performance
Racing Hard Wheels - Dazz Motorsports

This is not meant to discredit great shops that are active on these boards, such as Gruppe-S, but simply clear up the facts of the matter.

 

Actually Bozz is defunct and the leading Cusco importer is Nukabe Auto (once there were 2). As for Nismo, SSR I am have not seen any exclusive distribution arrangements - Nismo USA seems to do things a bit different than Nismo Japan. As for Racing Hart, I believe RH Evolution and Racing Hart is a separate line, but not too sure on this.

Cheers,

Gary
Gruppe-S

 

Sounds more like black market , grey market stuff is more like items that are not normally sold in an area. Basically like the JDM parts people bring over to sell , my NSR250 etc etc.

 

I don't purchase much aftermarket for my Z, in fact I haven't bought anything (yet) since I have owned it in May.

However, as you said, grey market is a legit business in the US and around the world. You mentioned Warranties as one of the main difference between legit, strait from the manufacturer, or "second hand" (if you will). I just think it is fair to present to the consumer the fact that most warranties are a ripoff. How often does the product work? Almost always. And which companies offer the best Warranties....the ones that never break. That is because they make an absolute killing on Warranty income. They bring in FAR more than they ever have to put out for a 100% replacement. Warranties are for making money for the vendor, simple as that. They didn't put it there to lose money on it.

So my point is, that in most cases, one is better off buying the grey market and not paying extra for a warranty they will never use.

Just my .02 cents.

 

They are different lines, but DAZZ is distributor of both.

Nukabe is essentially Cusco USA now.

Warranty isn't really the big issue of what Andy was getting at though.

Like I said, obviously the customer will typically prefer grey market because they are more concerned with the amount of money they spend.

However, if you take a look at the bigger picture, keeping authorized distributors intact is the way to keep the market organized, legitimate, and consistent (among other things).

I think it's hard to realize as a consumer our viewpoint as vendors.

 

A very fitting thread for the classified and off topic sections.


http://en.wikipedia.org/wiki/Grey_market

"Entrepreneurs buy the product where it is available cheaply, often at retail but sometimes at wholesale,

[import it legally] to the target market and [sell it at a price] which provides a profit but [which is below the normal market price there]."

"Typically the manufacturer will refuse to honor the warranty of an item purchased from grey market sources, on the grounds that the higher price on the non-grey market [reflects a higher level of service]."

"Warranty law [is not] crystal clear, and is highly dependent on local law."


Caveat emptor

 

Hmm, good to know about Cusco. As for SSR, I'm just going off of their USA website. I didn't mean for that list to be the exclusive distributors, just authorized ones that I knew of. Yes, its very possible for there to be more than one distributor.

Except in the case of Nismo USA that is. I'm pretty sure Nissan has a policy that if you want your Nismo part warranted here in the states (i.e. for a dealer to service it), then you have to purchase it through the dealer in the states. If you're trying to buy something that is only made/distributed by Nismo Japan and not among the parts catelogue here in the states though, all bets are off.

 

So let me get this right - I should spend thousands of dollars more than I should so someone can market and advertise a car to me that I already own? I understand the whole "take pride in your ownership" and "contribute to the common good" here, but until car dealers and aftermarket retailers become more upfront with their pricing and make me feel like I'm part of the common good (instead of a victim of the process), I'll take my chances. Believe me, seeing my car every day is enough advertisement for me