Boycott of metal detector sellers – what is it and why?

It seems that one of the YouTube bloggers, who is known to his audience as «White Digger» went against the system.

Simple example — We take a slogan that is accessible and understandable to every ordinary person: «We don’t go to buy MD from sellers, let them reduce prices!», «We are against raising prices!».

The video itself, if you haven’t seen it:

All this looks beautiful and good. Indeed, what kind of life is it now, prices are rising everywhere, but there are no wages. Everything is bad and terrible. There must be a solution and «White Digger» this solution just arrives on a plate — just don’t go and buy MDs in stores, go to Avito for used ear devices if you need something new.

However, as always happens in our lives, these are all populist slogans and have nothing to do with reality. The problem is much deeper than it appears «White Digger» and his guys. I will try to tell a little from my experience and knowledge how pricing policy and economics are structured in the world based on small manufacturers (MD manufacturers by default — small companies, but if Samsung or Bosch had released metal detectors, it would have been a different story economy, economy of large concerns and TNCs). In part, the largest manufacturers are Minelab and First Texas, companies worth millions, but still do not reach the level of TNCs, and therefore fully fit our bar.

Actually, above was the first video where he was just starting his boycott. Then the next, newer one came out (January 16), where «White Digger» shines with «knowledge» and «knowledge» in terms of the market and how things are happening in the market:

In this video «White Digger» claims that a collapse in prices is good and a monopoly (although it is not a monopoly, it is the exclusive distribution of a certain brand in a designated territory) is a disaster and a problem for diggers in this territory. The statement itself is controversial for many reasons:

1. Exclusive distribution is still given to few people; it must be earned by a high level and (!) growth of sales in your territory, which is achieved purely by promoting the product. Product promotion is carried out at whose expense? That’s right, at the expense of the distributor who imports.
2. Exclusive distribution in a closed market, such as the Russian Federation and the CIS countries (there is either no common market there or exists with a small number of states), implies the presence of a service center for warranty service and repair of metal detectors.
3. Exclusive distribution is the obligations of the distributor and, above all, financial obligations. The company is risking money, its capital, and it is logical that it wants to earn something else from this. If a company sells at a loss, it will definitely go bankrupt. What’s interesting — In this case, no one thinks about the employees of this company, because any medium and large business means a large number of jobs that regularly pay taxes and pay salaries to employees. And no one will work for free. 🙂
4. An exclusive distributor maintains a large inventory of products to supply its dealers with exclusive brand products.
5. The exclusive distributor, under the terms of the contract with the manufacturer/brand owner, undertakes to keep the pricing policy at the level established by the manufacturer/brand owner.

In short, now the brands on the market in the Russian Federation are divided as follows: XP supplies devices to RIF Detectors and MD Region. Reikom Group imports Fisher, Teknetics, Bounty Hunter (with the exception of some lines that are imported by MD Region), Garrett, Nokta/Makro. MD Region imports Minelab and many remaining brands — Quest, Whites, Tesoro and more. What follows from this?

And it follows that if you remove all exclusive distributors in Russia, prices will not go down.

Let’s assume this option: a store from Perm will order Minelab from the Netherlands, Garrett from the USA, Fisher from Bulgaria, and NEL coils directly from Ukraine. A store from Perm can give a lot of orders to a manufacturer? No, orders will be piecemeal. Piece orders are not serviced by the manufacturer at low prices, but are sold to the store at the regular dealer price. Add logistics (delivery), customs duties, and payment of VAT upon import to the cost of the order. A small store also has to live on something and maintain its space, keep a small warehouse, somehow advertise and feed its employees. It comes out — it is necessary to include in the cost of a small order the profit of the store, for which the small seller invests his hard-earned money, and not the «White digger» money, he risks his own money, but he honestly and regularly sells equipment to diggers, pays himself and other employees a salary for which everyone lives and feeds their families. What’s next? The result is simple — the price will be even higher.

Yes, it is possible, like some stores, to transport goods illegally without paying taxes and so on, but these usually do not last long, and they do not provide full guarantees to their customers.

Then there is the question of warranty. A seller from Perm sold an ICQ to a digger, and the next day it broke. The seller will not exchange a broken device for a digger with a new one, it’s the money invested, but when the manufacturer replaces the device for him, if he receives 10 returns, then he can close down and declare himself bankrupt. Therefore, it is more convenient for a seller from Perm to send ICQ for repair to a service center in his country, where the device will be repaired for free, and after 5 days or 2 weeks it will be returned back to the digger; it’s also the season, you can dig. And if you send the device under warranty to the manufacturer’s service center? Very often such centers are located in the same place as the manufacturer’s warehouse. Minelab would go to the Netherlands, XP to France. You will send ICQ to the USA ? And you will receive it back in three months, at best. The season is over, there is nowhere to dig.

One of the sellers more or less explained how it works and what kind of system it is.

Another argument was — raising VAT by 2%.Supposedly, if VAT went up by 2%, then the metal detector should cost 2% more, and not five percent or more. At a quick glance it looks like it is, but «White Digger» forgets that VAT was raised on everything — fuel went up by 2%, car repairs went up by 2%, rent, including VAT, went up by 2%, consumables all went up by 2%. Expenses increased not by 2%, but by a total of 20% or more! It turns out that who will absorb the loss on rising prices everywhere? Manufacturer of metal detectors, reducing prices by a few percent? He has similar problems, when components also cost and they need to be ordered (in quantities of thousands), everyone has to pay salaries and fulfill warranty obligations at their own expense. As a result, a small store has to raise prices in order to somehow stay afloat.

What could such a boycott lead to?

Simple answer — to store closures.Do you want new devices — buy online, but many in the regions outside the Moscow Ring Road will no longer be able to come and touch them with their own hands. The exclusive distributor will also lose a certain percentage of sales and receive less volume, which means that next year he may be left with invested amounts in the warehouse of metal detectors of old models, for example, and not import the new model in the required volume.

And the closure of stores in the regions — these are lost jobs. Sellers will have to look for themselves in a new field and, which is important for many small towns, look for work for months and change from earnings to earnings, and this is good if there is only one seller, but if he has wife and two children? It’s good to talk about it until the problem affects you personally.

Who benefits from such a boycott?

When something is shouted loudly under the guise of noble slogans — it sounds good, but in reality there are those who benefit from it.And it’s profitable to make money from you, or to gain influence over you.

In the first case, this increases ratings, the number of subscribers grows, income from advertisers increases, YouTube pays more for displaying advertising.

In the second case, I see one store in Russia, or even more than one, that dumps and, frankly speaking, does not comply with the general policy of the manufacturer. You have to play by the rules, such stores, in most cases, either close after a few years or find themselves cut off from supplies. And this is right and fair. Yes, the price may be a little more favorable than in other stores, but in a general sense this leads to the same problems that I described above — the seller barely survives on his earnings, does not pay wages and taxes, hides profits, does not develop his business, ruins the business of others, and in the end, he plays against himself, because at one moment he will send more than a dozen diggers with their warranty problems. It is rightly said that «the miser pays twice» and in this case, the saying completely describes the whole story of the buyer of a cheap metal detector.

Comment from the store «12 Talers»

I recommend watching, it briefly and clearly outlines the essence of the problem and what it can and will lead to:

It is also explained why prices for XP are rising, for the most part, this is caused by the desire of the XP company to bring order to prices on the metal detector market in Russia.

What would be more appropriate to do?

Naturally, instead of shouting about a boycott, we should start with ourselves and our environment. How much do you get? Is there an opportunity to increase your income? Maybe you need to go and talk to management to raise your salary by a few percent? Maybe then it’s better to boycott your employer and local authorities?

How much money goes past the budget? Everyone is used to complaining and saying that everything is bad, everyone steals and lives dishonestly. What if you try and start restoring your houses and roads? Start doing business normally and according to the rules? Don’t make kickbacks (or do, but not so huge)?

It’s time to finally understand that roads, on the repair and construction of which a very large amount of money is spent on the left, hitting the pockets of ordinary people every year (state employees, healthcare, education, support for entrepreneurship, opening new jobs), those who They steal this money for themselves, and then they drive on broken roads. They break their own cars. They themselves lose their loved ones and relatives in accidents because of their own bungling and greed.

And this problem is widespread and affects everything in Russia, unfortunately.

It would be more appropriate to start with yourself and think — «am I living correctly? Am I stealing? Do I share with the poor and help my loved ones?» Even the simplest small changes by everyone would lead to major changes in their home, neighborhood, street, city or country.

And boycott is nothing more than a desire to promote yourself and raise your rating using statements and slogans that are accessible and, most importantly, absurd for reality.