Fellas, here’s one to post on the store wall.
Dealer Cost Car Audio and related stores/Web sites owned by Ravi Ghataode were fined a total of $200,000 by the Orange County District Attorney’s Office this month. They were ordered to pay $130,000 of that back to customers. The remaining $70,000 were fines.
The stores were discounting products on the Web and advertising goods that were not in stock. When the consumer placed an order, his credit was charged immediately. But in hundreds of cases, the product never shipped and consumers were told it was backordered. They waited because the prices were so low, said the prosecutor Michelle Cipolletti.
A complaint to the District Attorney’s Office resulted in an investigation.
The stores charged include Dealer Cost Audio, Gold Star Audio—a high end car stereo store in Irvine, CA. selling top brands–, Gold Star Audio Sound, Inc., National Audio Center Inc, and Indo Audio. Prosecutor Cipolletti, said Dealer Cost Car Audio was also involved. That web site alone received 1337 complaints to the BBB in 36 months and had an “F” rating by the BBB.
Dealer Cost Car Audio also shows many products selling for below cost from what we could gather.
Owner Ghataode also goes under the name Robert Ghataode or Robert Jones, said the DA’s office. He admitted no fault or liability in the case.
For at least three years, the defendants advertised low-priced audio and car audio products on the Internet. While some were shipped properly, hundreds were not. Consumers were also given false refund and confirmation numbers. Or they were falsely told their credit card had been refunded.
The stores must now deliver products within 30 days or provide a refund and are enjoined from making any false statements about product arrivals or advertising products that are not in stock without disclosure.
You can see the press release from the DA’s office here.
And you can post on your wall this story in the Orange County Register here.
Finally the vendors get messed over just like us little guys. You guys are so right. I do the same with most manufacturers if i can get their product with people selling them as new shipped for less than i can get it. See ya. We installers retailers need to make a stand we take all the pain of displaying their product the risk of theft, people come in to see then shop online. We should be charging the manufacturer to display their product. We gotta make a stand at some point.
Sonic Electronix next? LOL, http://www.la.bbb.org/Business-Report/Sonic-Electronix-13198878
They got an A+ with BBB, because of their awesome customer service and low prices. The product is the same you’d get at a stereo shop except half the price! Sonic Electronix is awesome, there’s no way you can put them in the same class as Dealer cost. Give me a break… Seriously. And, again, if you don’t believe me, just look at the BBB, they’re unbiased and so are the rest of the review sites that Sonic Electronix actually links on their home page.
Wow so how is that all the big Manufacturers did not know when a stereo shop puts in a big order that they were wholesaling the product and ruining the market . I wonder if that means companies like ALPINE ,JL AUDIO ,KENWOOD ,PIONEER ,ROCKFORD FOSGATE ,AUDISON ,ETC will stop doing business with Goldstar Audio .
I hope everyone gets their refunds and the manufacturers will stop supporting these criminals .
People gravitating to the internet was just a response to people making money hand over fist at the retail shops in the late 80\’s/early 90\’s. Now, the price of most everything has gone up and wages are stagnant so people look to get the best deal.
Personally, I do all my install stuff myself, so I have no need for the services of an install shop. I don\’t think they will do enough for me to justify the the typical large markups. If I go to a local shop, they will have to order it anyway so I am not saving time. I am basically paying them a premium to personally hand me a box – a $100-200 charge I can do without.
Manufacturers have been warned for years about Goldstar’s hook-up with these unauthorized price bashing websites (indo, dealer cost, etc). Now that it’s all out in the open, AND they have been ripping off customers, EVERY vendor should break off with these guys. Are your sales $$$$ THAT important that you have to associate with criminals and industry killers?
@20 Years Running Things We are a Memphis, DD, & Phoenix Gold Dealer. We picked these lines for their level of quality and dealer protection. Hopefully soon the other audio manufacturers will see that the race to ZERO, gets you nowhere.
I get a few customers a quarter that have bought from Sonic Electronics and are unhappy w/ the quality of their equipment, and even more displeased by the level of customer service.
Manufacturers build product to sell product. Some care about their distribution and others don’t care at all. Spend 10 minutes online and learn a little bit about your lines. If you have product in your store that doesn’t move because it’s too damn cheap online, it’s YOUR OWN FAULT. Find a new supplier. In another 5 years or so all this will be sorted out. The manufacturers will soon HAVE TO choose sides, there won’t be any middle ground left. Either they will support the online model or they won’t. There are already some that have made the choice (Memphis for example). For the most part they are the only places I buy from. I’m just waiting for the day that a major head unit manufacturer makes the choice. I don’t have access to their internal numbers but it’s hard for me to believe that there would be ANY independent store in the country that wouldn’t buy a ton of product from one of the main line suppliers if they chose to keep it clean. I’d drop Alpine, JVC, Clarion, Kenwood or whoever in a heartbeat if one of the others decided to make the change. And the first one to do it would sign up a TON of new dealers. I would guestimate I could sell 65-80% of a single line in headunits if the line was clean and reasonably profitable…instead of the 4 fairly evenly divided lines we do now.
Bottom line is, there’s a huge problem in our industry. There’s a race to Zero. There’s no excuse for products being sold for almost no profit. There are so many companies in other industries that just don’t tolerate this kind of sales so there’s no excuse. Our industry should follow companies like Festool, Powermatic, Jet and many more that ship world wide and still control prices at the retail level. The small business guys are the true hero in our industry. We have little motivation to compete the Internet but we still do. Without us to do professional installations, mobile electronics dies. Manufacturers should show us more respect. When I look at a new line, I go on line in front of the sales rep. If I can find his product at cost as fast as he can, he is directed to walk out the front door. Manufacturers have more responsibility than the government to make sure this crap doesn’t happen.
This is for Dan. VENDORS are the companies you buy products from to sell. From Alpine, Pioneer, Sony, etc., to the distributors and marketing warehouses that sell to you. David is stating that Robert Ghataode, owner of Dealer Cost Car Audio, owes his VENDORS for the products he received on credit terms, and apparently isn\’t paying his bills.
The Vendors should think real hard about doing business with people/companies like this in the future. Do a little investigation into who is buying products from you. If they are selling them at the same cost or below 15% profit, then their business model is not going to succeed, and you will be left hanging with large amounts due….
@danstereogod Vendors are who dealer cost car audio would be buying from… and @opee why? They’re actually pretty legit.
This is for David, if you are a vendor and are buying from online dealers you deseve to get screwed. Get a legit business and buy from the manufacturer, and you will never have problems. I tell my customers every day about things like this. This is just one of many that need to be shut down for good. We need some type of consumer protection in the mobile electronics industry.
awesome.. Sonic electronics would be the next one……
It’s a small victory and the effort by the DA is appreciated. The action doesn’t address the issue of the companies selling below map or below cost. The only benefit of this is that it may discourage some shoppers from buying online from these types of sites. If it sounds to good to be true it probably is.
finally some one got him!!!!!
he owes vendors hundreds of thousands!!!!!!
good job.
It’s about time, all you big name companies out there need to advertise this heavily before you lose more customers.