Test Equipment and the whole game

[Fungus]

The Dutch version of Amazon's website clearly states a 2 year warranty period.

2 years is the law in the EU, the question is who gets to deal with it.

Usually it's the manufacturer, not the place you bought it, eg. If I buy a toaster in a large retail store then I don't send it back to the store if it breaks, I contact the manufacturer and they deal with it.

eg. I've done this with a Benq monitor in Spain - I call Benq and they send a guy to my house with a replacement. He picks up the old one and takes it away.

With Amazon it's not so clear. If it's a major appliance manufacturer then you're probably OK. If it's a Chinese oscilloscope you're completely screwed. If it's a Siglent Oscilloscope, who knows? Will Siglent EU cover me here in Spain if I didn't buy from them?

[nctnico]

The Dutch version of Amazon's website clearly states a 2 year warranty period.

2 years is the law in the EU, the question is who gets to deal with it.

Usually it's the manufacturer, not the place you bought it, eg. If I buy a toaster in a large retail store then I don't send it back to the store if it breaks, I contact the manufacturer and they deal with it.

eg. I've done this with a Benq monitor in Spain - I call Benq and they send a guy to my house with a replacement. He picks up the old one and takes it away.

With Amazon it's not so clear. If it's a major appliance manufacturer then you're probably OK. If it's a Chinese oscilloscope you're completely screwed. If it's a Siglent Oscilloscope, who knows? Will Siglent EU cover me here in Spain if I didn't buy from them?

Doesn't matter. Your contract is with Amazon (or any other seller) and they have to make sure the warranty is carried out correctly. It is fine if they outsource that to a third party but as a seller they are still responsible.

[bd139]

There's the law and there's the completely separate concept of getting people to comply with it...

[tautech]

I used to think a bit like OP , but now I realise that Test Equipment is a crappy business to be in and the only customers that matter in the vast majority of countries are educational and government buyers. Hobbyists are a rounding error and take up too much time with begging and questions.

Well yes, you have correctly identified just 2 market sectors however there are several more and each with subcategory's.
Each should be a valued category and each can require an entirely different investment of time to fully satisfy the buyers inquiry at a level that you just can't get in any shop...yes the occasional sale takes only the time to complete the paperwork and others total an hour of emails to demonstrate an instrument can indeed meet the buyers requirements.
The good (fast simple sale) is also balanced with the bad (protracted drawn out sale) yet sellers that lose sight of buyer satisfaction shouldn't be in this game as it's not like selling groceries that ppls must buy to stay alive.

I don't understand the distributor hate at all, yeah they charge a markup - as they do in every industry.

Running a business costs and it must be funded. Over the last year shipping costs have jumped dramatically and coupled with component supply chain issues and the lack of shipping containers has created the perfect shitstorm yet it's only those with their heads in the sand that didn't see this coming 12 months ago. 
Forecast to improve Q3 and I can't wait.

[TheUnnamedNewbie]

The Dutch version of Amazon's website clearly states a 2 year warranty period.

2 years is the law in the EU, the question is who gets to deal with it.

Usually it's the manufacturer, not the place you bought it, eg. If I buy a toaster in a large retail store then I don't send it back to the store if it breaks, I contact the manufacturer and they deal with it.

There is actually no question at all in the EU who gets to deal with the warranty - it is always the trader (source: https://europa.eu/youreurope/citizens/consumers/shopping/guarantees-returns/faq/index_en.htm )

This is also why you can refuse when a trader tries to tell you to reach out to the manufacturer. It is their responsibility to fix the problem, not yours, if it requires reaching out to the manufacturer they should do that for you. Sometimes it can be interesting to reach out to the manufacturer, esp if they have a warranty program that goes beyond the warranty provided by a seller (EG, friend's of mine have had Dell come to their house to replace a hard disk there so they could work the next day - without even being a commercial service contract entity).

Now as to the OP's initial ramble: I've learned over time that often things that seem ineficient to me might be so for a very good reason. More often then not I learn over time that my thoughts on how it ought to be aren't the great after all.

[nctnico]

There's the law and there's the completely separate concept of getting people to comply with it...

That is where the legal assistance insurance comes in...
Bad reviews also go a long way if they start to accumulate.

[bd139]

Or just buy it from a distributor who will support it and save yourself a shit show....

[noobiedoobie]

I'm in the process of upgrading some of my older TE and noticed the Siglent equipment being sold by Amazon. However, I do not see them listed as an authorized distributor on the Siglentna web site. How did you determine they are an authorized distributor ?

Only by the name of the Amazon store.

Dave is quite correct on this one, Siglent NA do indeed have an Amazon store that was opened a few years ago by the now retired GM.
Right before your post this screenshot shows the official Siglent NA Amazon store:

Now do you see what I was saying?  That is the way to go... online and free and open market

Btw it was me who pointed it out not Dave.

[tautech]

I'm in the process of upgrading some of my older TE and noticed the Siglent equipment being sold by Amazon. However, I do not see them listed as an authorized distributor on the Siglentna web site. How did you determine they are an authorized distributor ?

Only by the name of the Amazon store.

Dave is quite correct on this one, Siglent NA do indeed have an Amazon store that was opened a few years ago by the now retired GM.
Right before your post this screenshot shows the official Siglent NA Amazon store:

That is the way to go... online and free and open market

And treading on the toes of their already assigned distributors and resellers. 
At least Siglent NA has the salaried staff to deal with the support required when they chose to use this selling platform.

[nctnico]

Or just buy it from a distributor who will support it and save yourself a shit show....

That is a great idea. I've lost over 2k euro that way! Buying from a so called authorised distributor is in no way a guarantee you get support or customer service! The only thing the words 'authorised distributor' say is absolutely nothing.

In the end the only right answer is to research which sellers care about their customers and which don't. Sometimes that can be a big company and sometimes a one-man-band. You can't tell without doing research.

[bd139]

Ok clarification: buy it from a distributor that isn't shit 

Or go to Keysight and pay.

Edit: If you're running a business it's generally best to pick something with a crazy NBD warranty or something you can replace instantly because at the end of the day you're going to be without it until whatever warranty process happens. Now I'm no longer on the EE side of things but I have 2-3 of everything I need at hand ready to roll should fate smite me. Because that's cheaper than actually losing the money for the day.

Better to have two cheap scopes that scrape the job by than one really good one that disappears for a month if it goes wrong.

The key thing most small time orgs (and one man outfits) have absolutely no idea about is risk mitigation...

[noobiedoobie]

Now as to the OP's initial ramble: I've learned over time that often things that seem ineficient to me might be so for a very good reason. More often then not I learn over time that my thoughts on how it ought to be aren't the great after all.

That is the thing about people. People don't how things must be until they are shown it in reality. That is how disruption is. Could you have thought you could buy groceries to electronics online? Today it is a reality. Imagine yourself 30 years ago, had online shopping been pitched to you, you would have found 100 reasons why it should remain the way it is - customers can't check what they are buying, quality, blah blah

Today TE is the way it is because of a vicious circle: The cost is high so the demand is small; the demand is small because the cost is high and a good reason(not the only reason) why the cost is because someone wants a massive cut for selling.

Also I see a lot of points about hobbyists begging and asking too many questions - to justify the need for distributors. Did anybody wonder why that is happenning? Because all the colleges they studied in opted to use analog scopes just enough to finish the course syllabus because DSOs are so darn expensive and if some kid blows a channel then oh boy! and so not many even saw a DSO. No wonder they ask questions. Now cocky manufacturers like Tek and R&S have realised this and have released educational versions. Reminds me of the Cigarette industry way back whose marketing strategy was "Catch them young".  R&S asks for verification that you really are a student.Schmuks.

The closest thing I can relate this to are cars. Cars have dealerships for the same reason service, support spares and other BS. Look at what Tesla is doing, they sell direct - Now was that so difficult? NO

That's why I said so about dealerships. They are a relic of a bygone era when post and landline telephones where the best means to communicate.

Today it isnt. TE companies would sell a lot more equipment if they reduce the price. Educational institutions to enthusiasts to industry. This seems like a like a chicken or egg problem  but it isn't. Companies have to swallow their ego and bid adieu to distributors and focus on selling direct.

I started this post with a very faint hope that Dave would mention this and lot many other who run youtube channels on electronics can talk about this too and somewhere few years down the line companies atleast consider releasing online only models if not openly opt for direct selling. I know this sounds like day dreaming but something must be done.

I just love what the Chinese are doing. I was thinking of writing a post in the general chat section on all the models they copied and how the world is a remarkably better place today because of it. Don't get me wrong but I don't agree the way that country behaves politically.

Man is a tool-making and tool-using animal. He just needs tools to make more tools!

[noobiedoobie]

That is a great idea. I've lost over 2k euro that way! Buying from a so called authorised distributor is in no way a guarantee you get support or customer service! The only thing the words 'authorised distributor' say is absolutely nothing.

In the end the only right answer is to research which sellers care about their customers and which don't. Sometimes that can be a big company and sometimes a one-man-band. You can't tell without doing research.

Exactly! People are thinking distributors are some kind of knights who will swoop in and serve your cause when you are in trouble. They don't know how they only end up adding fuel to the fire. This is true with any company's distributor. Ofcourse there might be one good distributor in a country. But thats been the general experience so far both as an individual and working for a large company. The distributor only has an incentive to make a sale but very little if any to service. So they are all great when they want you to buy(some not even here) but if your gear goes for hike then you almost always lose sleep.

[noobiedoobie]

By the way here are the numbers people:
(I took pain to dig into these figures)
Revenues of TE Companies:

Agilent: $5.5 Billion
Rohde and Schwarz: $2.8 Billion
Keysight: $4.2 Billion
Tektronix: ~$1 Billion

Those are company revenues. Worst case the distributors get 10% margins so thats $500mn, $400mn and $100mn for each respectively, which the company is technically giving away. Keysight spent $289 paying all their employees globally last year. Tell me $400 million, the money they give away to distributors is not enough to feed a sales and support staff if they have to sell direct. That too this assuming a meager 10% margin given away.

Dave could you please make this point anywhere you get a chance?

Edit: Corrected the revenue figures

[nctnico]

Edit: If you're running a business it's generally best to pick something with a crazy NBD warranty or something you can replace instantly because at the end of the day you're going to be without it until whatever warranty process happens. Now I'm no longer on the EE side of things but I have 2-3 of everything I need at hand ready to roll should fate smite me. Because that's cheaper than actually losing the money for the day.

That is an entirely different subject. You can always choose between having redundant equipment or having an SLA in place. Neither have anything to do with selling equipment. A company offering SLAs better lives up to their contracts or they go broke from the penalties they have to pay.

OTOH having redundant equipment can be cheaper. It greatly depends on whether you are talking about a 10 euro pair of pliers or a 50 million euro printing press.

@noobiedoobie: 10% margin is way to low. Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

[tautech]

Let's look at: 'the whole game'.

Without doubt electricity and electronics have given mankind their greatest advances for more than a century and will continue to for the foreseeable future.
To advance we need test equipment and where once there was only a handful of TE manufacturers this is no longer the case. Dozens and dozens now exist so we are more spoilt for choice than ever before with capability beyond belief and at prices that weren't even dreamed of just a decade ago.

These amazing times have grown the TE marketplace where even hobbyists can enter with new equipment for insignificant amounts compared to yesteryear and have an amazing lab to develop products or just developing their understanding of electronics.

[tautech]

@noobiedoobie: 10% margin is way to low.

Yep.

Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

[tunk]

Agilent: $5.5 Billion
Keysight: $4.2 Billion

Didn't Agilent leave the TE market when they spun off Keysight in 2014?

[noobiedoobie]

Yes, they are now into instrumentation in chemical and life sciences. Answer edited

[noobiedoobie]

@noobiedoobie: 10% margin is way to low. Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

Oh my holy FET! 50% to 60% that is ridiculous. I can't sleep now. What heavy lifting? TE is bought on very objective pros and cons whats the distributor have to do with it. 50% for making a few calls and possibly giving a demo of a product they themselves dont understand.

[tggzzz]

@noobiedoobie: 10% margin is way to low. Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

Oh my holy FET! 50% to 60% that is ridiculous. I can't sleep now. What heavy lifting? TE is bought on very objective pros and cons whats the distributor have to do with it. 50% for making a few calls and possibly giving a demo of a product they themselves dont understand.

Many industries have a strong distinction between wholesale and retail, because the business and skillsets required are different.

I suggest that you would learn a lot by researching and understanding why that is the case in many industries.

[noobiedoobie]

Its a myth that being a distributor of a TE company needs skillset. Have you spoken to those guys? They read stuff off the brochure/datasheets if you ask them questions. If your doubts are little too technical for their competence they divert it to the technician at the company.

I understand the distribution hierarchy in other industries like automobiles, construction materials etc. and the retailers have thicker margins than distributors. I have done my research and for goods like TE I am of the firm opinion that the distributor is a needles appendage.

There was a siglent distributor who was trying to justify need for distributors. His reasons - Local language support, service and support. None of which are convincing.

[Bassman59]

The closest thing I can relate this to are cars. Cars have dealerships for the same reason service, support spares and other BS. Look at what Tesla is doing, they sell direct - Now was that so difficult? NO

That's why I said so about dealerships. They are a relic of a bygone era when post and landline telephones where the best means to communicate.

Here in the US, every state has laws requiring that cars be sold through franchised dealers, not directly from the manufacturer. These laws exist because car dealers are wealthy and can afford to donate to political campaigns. Every time there are pushes to eliminate those laws, the dealers dump money into campaigns and they make dire predictions: "Car dealerships are major local employers! If you eliminate us, all of those jobs are lost!" That's self-serving bullshit, of course. The owners of the dealerships lose, and that's all they care about.

Of course, back in that bygone era, franchised dealers might have made sense, but now they're just in the way. There is no reason for a car dealer as such to exist. I want to buy my next car from Costco. I am not kidding. The manufacturers can set up company-owned repair/maintenance shops and also offer franchise options for independent shops (basically the shops can pay for a nice plaque and direct access to the factory for parts and documentation).
 

Today it isnt. TE companies would sell a lot more equipment if they reduce the price. Educational institutions to enthusiasts to industry. This seems like a like a chicken or egg problem  but it isn't. Companies have to swallow their ego and bid adieu to distributors and focus on selling direct.

Reducing the price? Are you in a business that manufactures specialist equipment? Do you know the margins and the overhead? Doubtful.

(Aside: this forum always baffles me. It claims to have a large audience of professional engineers -- that is, people whose work results in products sold. So these professionals understand things like "overhead" and "BOM cost" and what it takes to run a business, and all of that goes into their products' selling prices. Yet there are people on this forum saying "they need to reduce the price" (or worse, ask for hacks and workarounds for software licenses). And right away this is what tells me whether someone is a professional or a pretender/hobbyist. Yes, we all want products to cost less. But we also want the best performance out of those products, and we want the supplier to remain in business to support the product. So pick two.)

Selling through distributors is a separate issue. At least here in the US, they're already doing that. Right now in another browser tab I have the Keysight oscilloscope page open. I clicked on "BUY NOW" and it's in my cart and if I give them my credit card number they'll happily send me a nice 'scope. Tektronix is the same. Fluke, too.

I bought a Rigol power supply through distribution (Saelig) since Rigol does not sell direct. That's likely because they're not big enough to do their own worldwide distribution.

Man is a tool-making and tool-using animal. He just needs tools to make more tools!

So which toolmakers deserve to make a living from their work, and which do not? This is the question you are asking.

[nctnico]

@noobiedoobie: 10% margin is way to low. Count on at least 30% but 50% to 60% is more likely if a distributor moves a decent volume and does some heavy lifting to give support.

Oh my holy FET! 50% to 60% that is ridiculous. I can't sleep now. What heavy lifting? TE is bought on very objective pros and cons whats the distributor have to do with it. 50% for making a few calls and possibly giving a demo of a product they themselves dont understand.

Well, they'll need a building, inventory, insurance, accounting, equipment to loan for demos, people to deal with logistics, customers, etc. A manufacturer could do this by themselves but they'd add the overhead of maintaining a distribution network (which is not their core business)  AND still have all the costs involved with distribution. A direct sales channel would be great but it will also involve answering lots of questions. Look at how many basic questions are asked about test equipment on this forum. Distributors probably get these questions all day long.

Clothes are even worse... At least 70% margin and more likely 90%. Even with a 70% discount shops still make a profit. The founder of Zara (a chain of clothes stores) is richer than Bill Gates.

[rstofer]

Of course we do.....timely support in the local language and time zone. Spare/accessories if required.
Additionally territorial marketing agreements have been signed....inquiry to manufacturer results in notification to regional distributor to follow up on a likely sale and this is a process that works.

Trust me I know how the process works.
Local language support, Spares etc Again none of which the company cannot do by itself directly on a platform like Amazon.
' Territorial Marketing agreements' - Thanks for proving my point! Its just another way of creating 'territorial monopolies' where none should exist. These agreements are great for cement and fuel business not the tech business.

The manufacturers wants to put their efforts where it produces the most revenue.  That's manufacturing, not hand-holding hobbyists.  Leave the nonsense to the distribution channels.  Leave some percentage for the distributors in the MSRP and call it a day.

Businesses are not charities!  They make a product that fits a niche and tend to sell it for as much as they can get away with.  The market tells them when they are overpriced and underpriced.  The market is pretty smart that way! 

As a stockholder living on a fixed income, I expect those companies whose stock I own to make a profit.  A lot of profit.  If they don't, I'm going to dump my stock.  Not just me but millions of other investors.  I'm not a charity either! The stock market is pretty efficient too!


Besides, the distributors do the stocking.  The manufacturer makes a batch, sends them to various distributors and they're out of the loop.  Maybe the odd warranty claim but that's a separate department.

Just because Amazon lists a product and maybe even ships the product doesn't mean they sell the product.  Look at the ever-popular DS1054Z at Amazon. Sure, they warehouse it (maybe) and ship it but it is sold by TEquipment.

https://www.amazon.com/Rigol-DS1054Z-Digital-Oscilloscopes-Bandwidth/dp/B012938E76

Same story for Dave's version of the BM786.  His inventory is sitting in Amazon's warehouse.  Amazon will ship it but it's sold by EEVblog

https://www.amazon.com/EEVblog-BM235-Brymen-Multimeter/dp/B01JZ1ADCO