Audiophiles Are Not Idiots …..

[June 24, 2010 addition. Starting a few weeks ago, SORAsound has been offering ZYX Omega for Free. The lowest this cartridge has cost me is $1,380. ZYX Omega G used to retail in North America $8,300 until around end of February, now retails $6,500. Why pay these prices when you can have it for FREE from SORAsound?]

[April 30, 2010 addition.  SORAsound is now offering ZYX 4D from $1,795 to $2,295 and ZYX Omega from $1,495 to $2,695. You can check out the details here. Enjoy reading this posting]

In the last few months, based on certain complaints received, Audiogon has asked SORAsound to remove and/or tame some of our ads. I respect Audiogon as a business and understand their decisions. We do our best not to rock any boats. I cordially offer the explanation below to those who complain about our ads.

First, let me be clear and say I still respect Hisayoshi Nakatsuka san as a cartridge maker. I like Nakatsuka san as a person. He was good to SORAsound. Nami and I still consider him a friend. All people make mistakes in their lives. We all learn to forgive and move on. We still extend our most sincere gratitudes and best wishes to Nakatsuka san.

Now, let me get to your complaints. Perhaps you are bothered by the facts and/or opinions we state on SORAsound.com regarding business practices in some countries associated with ZYX Company and its global agent, Sibatech. Perhaps you are bothered when we question why ZYX Omega G retails at $600 more than ZYX 4D in Japan but up to $4,450 in some countries? Is this statement a fact or not (accounting for variations in exchange rate)? Of course I understand there may be other costs involved depending on business practices of a particular company but you need to improve your own business practices and business processes rather than aim at SORAsound and our ads.

[Feb 13, 2010 addition: Since this posting, through a simple google search and a couple of phone calls we have found a variety of prices for ZYX Omega G. In one European country known for its high cost of living, ZYX Omega G is about $3,040 excluding VAT, in another great European country, again expensive place, ZYX Omega G retails for $2,695 excluding VAT. Given the weak dollar, the discrepancies mentioned here are great. How can one justify the difference between $2,695 and $8,300 for ZYX Omega G? Does the same cartridge sound so much better in North America or other parts of the world where they are retailed at such ridiculous prices?]

Audiophiles are not idiots. Just because we have this great addiction of pouring our money and soul into this beautiful hobby of ours, does not make us total idiots. As of this posting, there is a ZYX Omega MC Cartridge on Audiogon for $3,500. I am told the customer has only had the cartridge about two months, purchased directly from ZYX distributor in North America, and is the silver version that retails for $8,000. This ad alone tells me this customer has probably paid around the dealer price for his ZYX Omega cartridge. Of course I may be totally wrong but my thoughts are based on the following assumptions:

• Given ZYX North American dealer margins appears to be at 50%, this cartridge was probably sold to the end consumer at about same price
• Most people do not like or want to lose $500 or more in two months
• Some ZYX cartridges have in excess of 80% per unit margin, based on current North American retail prices
• So, while the dealer has probably about 50% margin to play with, the distributor has more margin to play with and further discounting is possible. (By the way, I am aware of an offer by a ZYX dealer for 50% off. So I assume in certain cases dealers can sell at “their own cost”).

ZYX prices are bogus. Your business practices give ZYX brand a bad name, not SORAsound ads on Audiogon. It is your business and I wish you the best but please don’t blame SORAsound. You need to ask yourself a few basic questions:  

• If ZYX Omega is sold at so much lower retail prices in some countries, using a similar dealer network and same unit cost for cartridges, then why can it not be done in North America (or other countries with similar pricing)?
• Why is the cost of of silver and gold coil ZYX cartridges higher than copper in North America (and some other countries) when they are priced the same in Japan (and some other countries)? As far as I know distributor cost is the same regardless of the coil?
• Does your distributor sell direct to the end consumers and if so, at what price (note the case of ZYX Omega above) ? Is direct sale at deep discount by a distributor a conflict of interest with dealers or not?
• If SORAsound was dropped because of Audiogon advertising, why is this practice still continued (directly and indirectly) by some of the new folks in one form or another?
• If SORAsound was dropped for discounting, why is this continued by the new folks, and by some on ebay?
• If SORAsound was dropped because of complaints by a couple of ZYX distributors, why do they now say the ZYX situation was much better under SORAsound?
• Why are some ZYX models like Omega are made in blue bodies rather than no color plain acrylics distributed during SORAsound times?
• In all honesty, are these cartridges worth your retail prices?

There are of course more questions but for starters, it would be good to find answers to the aforementioned questions, from the audiophile/end consumer perspective. Bear in mind that even in countries with significantly lower retail prices, you can still get a discount. So, if I were you, I would not defend your business practices and processes. I would have fixed it.

Audiophiles are smarter than you think. If you think by muzzling or getting SORAsound dropped out of Audiogon, audiophiles will open their wallets to you, you are in the right company with your suppliers.

Give us credit for trying to alleviate the impact of the mess by still avoiding to sell in other markets. SORAsound is simply trying to sell its ZYX Co products, still plenty in stock. I am told many people in my shoes would have sold anywhere and dumped their products. We still avoid selling ZYX products into other territories because we don’t want other distributors to get hurt by this mess.  If SORAsound sold its stock in other countries, ZYX distributors in those markets would get even more upset and the situation for ZYX would get worse. Why is it that your global agent does not seem to be concerned for sales in other territories but SORAsound is? Talk to your suppliers who were all well aware of the level of SORAsound ZYX inventory and our investment (not just money) in ZYX Company at the time they dropped us.

It may be worth your while to understand your suppliers (e.g. Sibatech, ZYX Co and their distributors) business practices. How do their personalities reflect in the way they do business? Why do you think SORAsound was dropped despite being ZYX’s best distributor (IMHO and as Nakatsuka san had told me a few times), after six years without any warning or explanations? If you find out the answer, I pay you to tell me! (Of course I know a lot more now than a few months ago and soon I may write about what I think those reasons were). I even flew to Tokyo to meet with them and find out what happened but they did not meet with me. I told them they did not need to hire SORAsound back only I wanted to understand what SORAsound had done wrong, and if we had done something wrong, we would apologize for it in person. But they did not have the decency to meet with me after I flew all the way to Tokyo. Would you meet with someone who drives two hours with you and has worked with you for only two months? I would like to think you have that much integrity. In fact, I know (of) some of you. I think you would exhibit that level of courtesy.

SORAsound served ZYX Company and its global agent, Sibatech for about six years with utmost loyalty, putting ZYX Co on the map in North America. We supported them and bought from ZYX Co. even when we did not have customers, to ensure they had a steady income from SORAsound. When SORAsound was dropped, we had over 80 ZYX phono cartridges, 4 ZYX ARTisan phono stages, 4 ZYX CPP-1 pre-preamps, 3 ZYX Live Headshells, other accessories and demo/review items. Maybe not so smart of me to have invested so much of my time, money and energy in the line but I hope this was an indication of our loyalty and support for ZYX. No matter how shrewd of business people they may be, they should have put some more thought into their actions.

There is too much supply in the market, from ZYX to say the least. There are new and great manufacturers like Miyajima Labs. Lyra is always coming with more innovations and thanks to the genius of Jonathan Carr replacing their already great products with even better ones. Economy is down. Demand is low. And every now and then you run into less thoughtful suppliers. What do you think is the impact on our businesses collectively?

On the bright side, your complaints only add material to SORAsound.com, making it even more informative, and our customers / audiophile community more informed. Furthermore, they push us to advertise on other sites as well. Perhaps you should appreciate the openness we exhibit here. Hopefully this note has shed some light on the situation for you. With SORAsound, you get what you see. At least we make an attempt at that. ZYX Company dealers who want to talk to me, are always welcome to call me. I will deal with you and anyone else professionally, cordially, and honestly. If you prefer, you can submit a comment here. It will be published and I will answer it.

Again, I sincerely wish you, and ZYX Company the best. Although I wish it had not occurred, I have learned a lot from this situation. I am proud of SORAsound accomplishment and contribution to the audiophile community. SORAsound is bound to bounce back better and higher. I hope we all put this behind us in near future. For my part, I prefer not to waste any more time or energy on it but at times it is appropriate to respond. To audiophiles, and my dear customers: THANKS for your support as always.

[June 24, 2010. Please read how you can have ZYX Omega for FREE.]