[pct-l] Free SPOT rebate with 2 year contract-beware

[Albach]

regarding this thread:

 Re: Free SPOT rebate with 2 year contract-beware

What you are likely facing here are two issues:
(a) reseller terms; and (b) services vs. fixed product purchases.

(a) reseller terms:
As a general rule a manufacturer sets a floor on the minimum amount a vendor can sell their products and this is written into the reseller contract. Why? To protect their brand image, guarantee a reasonable profit to a wider range of resellers among others. Essentially the retailer accepts the contract and its terms or not. Typically they don't get to not accept and still sell the products.

(b) services vs. fixed product purchase:
Hopefully I can do this justice. There is SPOT the handheld device and then there is SPOT the service. Modern accounting practices say a vendor must recognize revenue for these in different ways. So lets start with the handheld device - as mentioned above I'm sure there are floors to the rates at which these can be discounted. But this is essentially a capital expenditure and you get a physical product to take home. Spot however is worthless without an infrastructure of space vehicles whirring above the earth and while I can't guarantee it I'm pretty sure they don't belong to Spot. Similarly Spot likely did not build a telephony infrastructure to get your Spot message to whomever you selected. All of this infrastructure requires ongoing payments for continued use from SPOT. REI or any other reseller has neither the obligation or ability to deliver any of it.

Here is my bet - these kinds of product + service combination are pretty unusual in outdoor rec environments per my observation but rather common in the tech industry (my *real* world) so I'm guessing that REI's blanket 20% discount was not really thought through with regards to this style of hybrid product.

What the actual impact is on SPOT's profitability is or my own guestimates above is speculative. But it looks very familiar and am suggesting this explanation for why the SPOT folks noted that this transaction was unfortunate.

-Robert



-----Original Message-----
> From: Carl Siechert <carlito at gmail.com>
>
> Date: Mon, 15 Jun 2009 21:20:00 
> To: Cris<cj5w4wd at earthlink.net>
> Cc: <pct-l at backcountry.net>
> Subject: Re: [pct-l] Free SPOT rebate with 2 year contract-beware
>
>
> My only reaction to this: WTF?
>
> Not only is it bad customer relations (and not only would it cost Spot less
> than what they're sending everyone else), but isn't it illegal for a
> manufacturer to tell retailers what price they can set? "It is unfortunate
> that REI would have issued a discount for your purchase..." Indeed. What,
> exactly, is a "full purchase price"?
>
> On Mon, Jun 15, 2009 at 5:14 PM, Cris <cj5w4wd at earthlink.net> wrote:
>
>   
>> Make sure you read ALL the fine print before you count on a rebate from
>> Spot.  They find ways to weasel out of it.  When I used REI's "anything"
>> 20%
>> off, Spot got all their money but REI covered the discount.
>>
>> Cris
>> ...mountains don't tolerate fools...
>> ________________________________________
>> From: customerservice at findmespot.com [mailto:
>> customerservice at findmespot.com]
>>
>> Sent: Monday, June 15, 2009 6:15 PM
>> To: cj5w4wd at earthlink.net
>> Subject: RE: Find Me Spot Contact Request for Existing SPOT Customer
>> [pfCase:5148, pfTicket:5006277]
>>
>> Good Day Cristine,
>>
>> We apologize for the frustration that you have experienced in regards to
>> your rebate submission,....
>> ...It is unfortunate that REI would have issued a discount for your
>> purchase when the terms and conditions of the rebate stated that a full
>> price purchase would be necessary for approval of the rebate.
>>
>> Once again, we do apologize but can not honor your rebate at this time.
>>
>>
>>