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Article #245 (376 is last):
From: xx004@cleveland.Freenet.Edu (Atari SIG)
Subject: A response on Atari Dealers overcharging article
Date: Fri Nov 23 13:36:32 1990

     The following is an article that Joe Adato of B&G Electronics
has responded to and his response article.  It is not a news article but
it does need to be posted.  The reason for this is because this topic
has caused many hard feelings between many people in the Atari Community.
As I knew it would when I first wrote it.  Was it worth it?
It all depends on if you take the suggestions made by both parties in
the following articles.

-------- Beginning of editorial comment on dealers by Len Stys --------

     I would like to take this time to clear up some confusion
that has been brought up by Joe Adato from B&G Electronics.  Joe had
commented that in the first newsletter, I had wrote in an article a statement
that claimed almost half of the Atari Dealers throughout the U.S. over charge
their customers.  Joe says that B&G Electronics, an Atari Dealer here in
Cleveland feels strongly against this and that what I had stated was a
common misconception.  He said that when you own a store front, you have
to pay for having a store front, this includes paying electricity, gas,
phone bills, employees, and taxes.  The dealership then provides for users what
mail-order cannot such as look at before you buy, help, and many other
things in exchange that you pay for the store front bills.  It is a fair
exchange and I have no argument with this.  However, I was looking at the
little "extras" involved that are commonly overlooked by everyone-
including Atari Dealers.  For example, a dealer may have a BBS and they
think is a nice thing to have for their customers, so they add the cost
of the BBS on to the products that you buy from them.  Another example
might be for a dealer to have enough hired help so that when you walk
into the store, you do not have to wait for the salesman to get done
with another customer.  They then add on the cost of having that employee
there for you (so you don't have to wait) on to the product that you are
going to buy.  The list can go on and on according to what your dealer
thinks YOU want them to provide "extra" for you.  Soon, your dealer is
charging you for everything they think you want and you have no other
choice but to pay for these "extras" because they are an Atari monopoly
in town.

     My article's main point was to show how the Atari Advantage package
could benefit us.  I believed that it could increase dealership and with
increased dealership- the price of products will be lowered due to
competition.  You would be able to choose what "extras" your Atari Dealer
should or should not provide.  If your Atari Dealer has extra employees so
you don't have to wait, you can say to yourself, "I don't like to wait and my
time is valuable so I'll pay the extra $5 for that employee to help me as soon
as I walk in."  But if you would be willing to wait instead of paying the
extra $5 then you can go to another Atari Dealer who doesn't have as many
employees and charges $5 less for that disk drive.  The more people going
to the Atari Dealer who provides or doesn't provide the "extra" will tell
both Atari Dealers what YOU want.  But as long as there are very few Atari
Dealers, they decide what "extras" you want.

     The point wasn't to attack your Atari Dealer.  It was to state that
more Atari Dealers will benefit you, the consumer.  Competition will not
only let you choose what "extras" you like but it will also make sure that
you aren't being taken advantage of.  I had phoned several dealers across the
U.S. and price compared.  Some dealers were charging a certain price while
others were charging as much as 25% more- this is what caused me to make
the statement that almost half the Atari Dealers over charge.  Even
though I explained how a dealer may over charge, I don't believe I had to.

----------- end of editorial comment on dealers ---------------


   In the last issue of the FreeNet newsletter, its editor, Len Stys,
referred to a discussion/disagreement that he and I have been having
since the newsletters opening issue.  Since he has chosen to make this
discussion public, and he explained his position, I appreciate the
opportunity to explain my position.

   Mr. Stys' contention, if I understand it correctly, is that over half
of the current Atari dealerships, in this country, over charge for the
Atari products they sell.  Mr. Stys argument is that these Atari dealers
over charge because they have a monopoly and have weighted themselves
down with extra services that you, the customer, pay for.  I believe that
Mr. Stys does all Atari dealers a great injustice with statements like
that.  I believe that, on the whole, Atari dealers provide an important
and necessary service to all Atari owners.  Without these dealerships you
would probably not be using an Atari product.

   Most Atari dealers are not in the business strictly for the money but
because they believe in the power of Atari computers.  If the making of
money were the sole reason for selling Atari computers I have no doubt
that there would be many fewer Atari dealers, in this country, than there
are now.

   Manufacturers establish what is known as a  Manufacturers Suggested
Retail Value (MSRV) for the products they produce and sell to their
retailers.  Atari Corporation is no different.  As an example, Atari
Corp. has stated that $699.00 is the MSRV for the new 1040STe.  This
means that any Atari dealer can charge $699.00 for this product and not
be accused of over charging or price gouging.  If the dealer wishes he
can charge something less than the MSRV of $699.00.  I personally know of
no Atari dealer that is charging more than the MSRV.   In fact, just
about every Atari dealer I know of sells the 1040STe for much less than
the MSRV.

   There are several factors that contribute to what an individual Atari
dealer has to charge, for the products and services he sells.  Mr. Stys
mentions some of them, i.e. rent, electricity, gas, phone, and employees.
Mr. Stys realizes that these expenses are normal and is prepared, as a
customer, to pay his fair portion of them when making his purchase.  Mr.
Stys problem is with what he has termed "extra comforts".  These extra
comforts are things like,

  1) Running a BBS board so all Atari owners can stay in touch with
     each other and help each other when help is needed.

  2) Having an 800 phone number so customers, living out of the local
     call area, can have an easier time of reaching their Atari dealer
     for assistance.

  3) Having a sales force large enough to care for customers so there
     will be a minimum amount of waiting when the customer enters the
     Atari dealers store.

   It's clear that services such as these are what Mr. Stys is objecting
to.  These, so called extra comforts, are for the customer and are not
intended to make life for the Atari dealer easier.  Although it does take
extra equipment which adds a small additional charge to the cost of the
product that you, the customer, purchase from your chosen dealer.  Mr.
Stys objects to having to pay for these extras, and I can understand his
feelings.  There is no doubt that Mr. Stys is extremely knowledgeable
about computers and especially Atari computers.  There is no doubt that
when Mr. Stys chooses to purchase any Atari product, be it hardware or
software, he knows all there is to know about it.  He doesn't need the
extra help that most Atari dealers provide for their customers.  But
unfortunately most Atari owners, especially first time buyers, are not
nearly as knowledgeable about Atari computers as Mr. Stys is, and it is
these individuals who need this extra help.

   For example, when a customer walks into B & G Electronics, he/she can
try out any piece of software that we have.  Most of the time the
customer has little or no knowledge of how to run the software.  This
means that a B & G  employee must spend time with the customer showing
them what the product will and won't do.  This takes time, lots of time.
It is not unusual to spend at least 1/2 hour showing a customer a
particular product.  While doing this the employee is unable to take
phone calls or help any other customer who might enter B & G.  Without
this extra help, B & G would not be able to exist and provide the quality
service that its customers have come to expect.

   Mr. Stys might suggest that we recommend an Atari User group to these
individuals so they can get the help they need.  We do!!  Depending upon
where our customers live, B & G will recommend that they visit one of the
four Atari User groups now in existence in the Cleveland area. 
Unfortunately, it has been our experience that most Atari owners, for one
reason or another, do not belong to any Atari User group.  Nor will they
avail themselves of these groups.  I have no answer to why this is, Ijust
know (as do most Atari dealers) that it is.  This means that the main
source of Atari information to these Atarians is the information they get
when they call their local Atari dealer.

   Since there are very few Atari dealers throughout the country, those
that are still in existence are becoming even more important.  Different
dealers will use different methods to try and stay in touch with their
customers.  B & G  uses three techniques;

  1) We publish a newsletter at least once a year and mail it to all of
     our customers.

  2) We operate a public BBS board so any Atarian can call and
     communicate with other Atarians or other computer owners.  In this
     way no matter where they may live they have an avenue for finding a
     solution to a problem they might be having or information about
     particular program, or game, they're interested in.

   3) An 800 phone number.  This addition gives those individuals who
      don't own a modem and who don't have an Atari dealership located in
      their city a way of getting the help and information they need.

   We in Cleveland are lucky.  Here there are two Atari dealerships. 
There are several cities throughout the United States that do not have
even one Atari dealership.  If you want to buy an Atari product don't go
to Youngstown, Ohio because there is no Atari dealer to be found there. 
If you want to buy an Atari product don't go to Spartensburg, South
Carolina because there's no Atari dealer in that town either.  I could
fill pages with places that don't have a single Atari dealership.  This
means that those Atari dealers that are still in business have an
obligation to try to reach these people and let them know that they are
not alone.  These individuals depend greatly upon Atari dealers from
other cities for the products they receive and the information they get. 
Sending newsletters, running a BBS board, and having an 800 phone number
make it easier for these people to keep in touch and not feel like
they're somewhere in the middle of nowhere.

   Another point Mr. Stys makes, which I disagree with, is his claim that
Atari dealers have a monopoly.  That's like saying that all Chevrolet
dealers have a monopoly because if you want to purchase a Chevrolet you
have to go the a Chevrolet dealer. Or, all Sears department stores have a
monopoly on Craftsman products because if you want to buy a Craftsman
hammer you have to go to a Sears department store to get one.  As I
mentioned earlier, Cleveland has two Atari dealerships, therefore a
monopoly does not exist in this city.  Since there are Atari dealers
(mail order houses and retail stores) throughout the country, if an
individual is unhappy with his current Atari dealer all he or she has to
do is pick up the phone and call another one.

   I realize that this may sound like a contradiction, to what I said
earlier, but it's not.  As long as a dealer has an 800 phone number or a
BBS board the customer is always just a phone call away.  That is exactly
why it is important for a dealer to have a BBS board and an 800 phone
number.  As mentioned before, Atari dealers sell Atari computers because
they believe in the computer.  If they were solely interested in making
money they would have a much easier time and make a much greater return
for their investment if they sold MacIntosh or IBM computers.

   Are there enough Atari dealers in this country?
   Not by a long shot!

   Could we use more?
   Absolutely YES!!

   Is Atari corporation doing enough to promote Atari Computers?
   Without a doubt...NO!!!

   Could Atari Corp., or should Atari Corp. do More?
   Well, I think we all know the answer to that question.

   Mr. Stys is correct when he states that you should choose carefully
who you want your Atari dealer to be.  But, he does all Atari dealers an
injustice when he tries to dictate what they should or shouldn't charge
for their product line.  There is a direct relationship between price and
service.  Any store, be it a computer store or shoe store, bases its sale
price on the total cost of the product.  This cost includes not only the
cost of the item itself but all of the "extras" and the right, of the
store keeper, to make a fair and reasonable profit for his investment of
time and money.  If you, the customer, feel that the service and help you
get from your Atari dealer justify the cost of the product, then you
should continue to bring your patronage to that store.  If, on the other
hand, you feel that you're being charged too much then it's your right
and responsibility to find another dealer who will cater to your wants
and needs.  On this I believe Mr. Stys and I agree.


     There is a chance that this article will appear in the next Atari
SIG Newsletter- that is if one still exists.

     The only comment I have to make in response to Joe's article is to
do what he suggests- shop around.  If an Atari Dealer is indeed
overcharging on a product or service then you will buy it from another
dealer and that dealer will not enjoy your patronage.  The statement
used time and time again that says, "support your LOCAL Atari Dealer"
does not exist anymore.  It is now "support your LOCAL Atari Dealer IF
you feel what you are getting is worth what you are paying for."

     Please be aware that I was not only stating Atari Dealers overcharge
on products- in which most cases, they are not allowed but there is no
restriction on the service they charge you on having something done
on your computer.  This is where I have received many comments of support
and agreement.  I had also stated that I never had paid below retail
on prices.
     The statement in where over half the Atari Dealers in the U.S.
overcharge their customers was taken from the first issue of the
Atari SIG Newsletter from the Atari Advantage article by me.
It suggested that the Atari Advantage package might be a good way to
increase dealership thus giving you more of a choice.

      We have two opposing arguments here and my best recommendation is
not to believe either one of them.  Just find out for yourself.
Len Stys

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