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In Reply to: RE: VPI Prime Buying Experience posted by Schlep on March 18, 2015 at 14:45:52
A quick update on VPI Prime delivery:
Mat expected to be 'caught up' and have VPIs in owners hands by April 1 (his words - see VPI Prime thread on VPI Support Forum). . . Did NOT happen. (to be very clear on this point, I did not expect it to happen - while I can't see the future, I certainly can see the past).
Not surprisingly, others who have posted to the VPI Prime thread are experiencing the same themes as I have been: 1) no direct response from VPI 2) one had a 'guaranteed' delivery date of something like 3/14 and received. . . nothing (to be fair, the 'guaranteed' date was provided by a dealer, not (as far as I know) VPI. That said, I would like to think dealers have a good enough relationship with VPI that they would work TOGETHER in determining a 'guaranteed' delivery date. Seems no dealer has this relationship with VPI. Heck my dealer wouldn't even bother calling them because they expected no definitive / reliable / accurate / truthful response from VPI (based on their past dealings on this exact issue).
The newest offering of an 'excuse' is VPI went from 4 to 12 employees and is considering adding a night shift. Yawn. . .
I know some of the readers of this will think I'm a horrid man for calling things like this out. That's fine. I believe everything stated above is fact, so it's kind of hard to argue to the contrary.Point is, hey, it's just not me by any stretch of the imagination.
Just my opinion, YMMV. . . : )
Follow Ups:
A quick update on the Prime. . . still undelivered. Ordered December 30 of last year.
Wow, I never though the oft quoted PT Barnum line would apply to me.
It's OK, it simply provides further affirmation that VPI does indeed employ the 'lemonade stand' business model.
Again, just an update, I'm not looking to argue with the sympathizers who liken VPI to an artist who creates magic on their own schedule. Per Matt, the goal was to satisfy all back orders 'by' April. Even after tripling staff, this can't be done. wow. It's probably the new tonearm technology causing problems, or perhaps it takes longer to train new employees to drag their feet like the rest of the organization.
Just my opinion. . . YMMV
Craig
Schlep said: "Thankfully, I'm paying when it is delivered."
Well, you have no funds invested. Maybe your snarky remarks to VPI and Mat bought you a ticket to the bottom of the list .... just say'n
Perhaps so, and if it is so. . . it is further proof that VPI is not a well ran business. But rather a business who reacts negatively to criticism.
Think of it this way; had VPI been reasonably transparent with this issue, you wouldn't even know my name. Again, I am not nearly the only person this has happened to. . . but I may be the most vocal.
Craig
Jeez this sucks!
I have been watching this thread and can't believe you still don't have your turntable and arm from VPI.
We should get a board and start a pool.
I look forward to your June 1st update.
My condolences.
Meat; It's the right thing to do. Romans 14:2
I've been puzzled by a number of issues left un-discussed since watching this and other threads related to VPI's production problems with the new Prime table. I don't know the answer to these issues, I'm just curious why they haven't been discussed by the customer base or explained by the mfr:
1. VPI announced the new Prime table in Sept IIRC, and started taking pre-orders at that time. They started shipping first product in mid December. They were immediately back logged. Q: How do you underestimate production when you take pre-orders? If you planned on holding zero inventory of the product, you would still know with near certainty, how many tables to make by the number of pre-orders.
2. How could sales exceed expectations by a factor of 3x (per HW)? What were VPI's expectations? Did the pre-orders match expectations 1:1, then on day one of production suddenly triple? If pre-orders exceeded expectations, wouldn't that be a good indicator to adjust your production forecasts?
3. VPI seems to be responding by hiring additional staff to help with production. In March? Why not in October so they are properly trained by the time production starts?
4. I've read many posts by Mat where he and HW are just finishing up after a long day of assembling Prime TTs and it is the wee hours of the morning. Admirable that the CEO and the retired founder are rolling up their sleeves to help out. Is that really the best use of their time and capabilities? We're talking assembly work here, right? Why not hire workers from a temp agency to turn screws and let VPI staff do the final QC and test?
5. After 2 months of this level of activity, people are posting that they just received their new Prime table, SN #0070. That's 35pcs/month or just over 1.5 tables per day (based on a 5 day workweek). Does that sound right?
6. Despite the CEO and the retired founder working day and night to produce tables, they still find time to refinish an old house to use for custom listening rooms and visiting press? I can certainly see the appeal to do a project like this, but when you have standing back orders for 3 months, I would think all other priorities are subordinated to fixing production.
7. I've never visited the VPI factory, so I'm not sure what they actually make there. It sounds as if most, if not all of the components are outsourced to vendors and VPI staff assemble the components into finsished product. Is this a correct assessment?
8. If the hold up is at the subcontractors VPI uses, did they not communicate their production expectations or pre-orders to their vendors? Are there no other vendors they could use to help alleviate the back log?
Questions 1, 2, and 3 are entirely related.
No-one anticipated the vinyl revival would become quite as international as it became across 2014, and no-one anticipated it would continue to grow at such an exponential rate in the places it had begun.
For example, we were expecting the UK vinyl market to increase by about 20%-30% year-on-year, as it has been doing since about 2009. Instead, the LP market grew 98% in a single year, and the growth has been across the board. This kind of growth is good, but potentially catastrophic for small businesses - I know of a couple of well-respected companies in the turntable business who are placing orders into late 2016, because demand is in overload.
The other problem with this overload is simple - try asking the bank for extended credit on what they see as a dead entertainment format. You either get a flat 'no' or end up signing the sort of contract that you haven't seen since you last saw Goodfellas.
As a 2015 TT business, you don't get to pay for extra staff needed to be in the TT business in 2015 until the money to pay for those extra staff starts coming in, which is why bosses spend all day and night building stuff. And if they are building stuff, they don't have time to answer emails about the stuff they haven't built yet.
There are those who are experiencing the same sudden growth problems VPI is suffering, but they aren't quite so visible here because most of you aren't spending $500 on a complete turntable package, or because their brand doesn't have the same traction in the US. There are also a lot of brands where the vinyl revival is simply passing them by. At least VPI is one of the all-too-rare rising stars.
On the other hand, I completely get why 'cut VPI some slack' doesn't work here, because a lot of slack has already been cut. But in part, this is because I don't think there are many other US TT makers with a dog in the international fight any more. Which is a shame.
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Editor, Hi-Fi Plus magazine, Lun-duhnn, Ingerland, innit
Everything I asked in my first post is still valid. You make it sound like VPI is a start up with no resources; they have been around for 35 years. If they don't have a standing line of credit to tap, they are terrible business people.
Banks don't determine loans by what industry you are in; all they care about are ratios: Debt to Assets, Debt to EBITA, Loan value to free cash flow or Loan Value to sales.
If sales are increasing (and your pre-orders indicate this) and you think you can charge your customers before you build their product and hold off hiring needed staff until after you bank the profits, you're not going to be in business very long. For a start up, maybe this is necessary, but again, VPI is 35 years in.
Delays and money problems aside, why doesn't VPI just give a realistic timeline to their dealers and customers, per the OP? Excuses are like a$$holes: Everybody's got one and they all stink. It all points to the same conclusion: Bad business practices.
Did the whole debt crisis just pass you by? Maybe it's different in your time, but here in 2015 the banks aren't loaning to small businesses. And they definitely aren't loaning to businesses in this sector, irrespective of the financial solidity of the company, or the length of time the company has been around.
But I like this concept all the same, because I'm financially sound and there are a lot of gaslight designs that are out of patent. I could clean up and take over the whole gas lighting market.
You're right that a company should give realistic delivery timelines. But this cuts both ways; if a company said "sorry domestic buyers, we have to satisfy the two-thirds of our market that now represents our export market first... please hang fire for six months or so" would you wait?
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Editor, Hi-Fi Plus magazine, Lun-duhnn, Ingerland, innit
I don't think we're talking about long term loans here; more like a 90-120 day line of credit. The kind of money we're talking about, you could put on a credit card (I throw away offers for $25-50K preapproved CCs almost every month). VPI also doesn't seem to be hurting for cash as HW just spent 2 weeks in the Caribbean and they just refinished a house and filled it with high end audio equipment. Are VPI's production problems related to working capital, or did they just plan poorly?
What difference does it make where the demand is coming from? It should be filled on a first come first served basis, and (again) they took pre-orders for 3 months. I think the O/P would have been satisfied if he received an answer that outlined realistic timelines and then VPI stuck to it.
Why are you making excuses for VPI?
I'm not making excuses for VPI. More importantly, if someone has a complaint with the company, especially one that they feel they has not been sufficiently explained in private conversation, then they should take it public.I have absolutely no problem with that. And there's no way I would attempt to defend the action of a manufacturer under those circumstances..
However, someone with a posting history of precisely four posts, all on the topic of VPI, and some containing some relatively detailed information about the company (such as serial numbers, HW's holiday plans)... well, forgive me, but my Spidey Sense is tingling here. I would defend a manufacturer against such activity, if I smelt a rat.
Of course I might be wrong here, but who are you? Rival manufacturer? Disgruntled ex-distributor? Stalker?
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Editor, Hi-Fi Plus magazine, Lun-duhnn, Ingerland, innit
Edits: 04/02/15 04/02/15
New to this blog, not VPI's forum, if you follow them at all you would know all of this is common knowledge.
I also used to work in finance, so I understand loan criteria. Your gas light example was so naive and simplistic I wasn't going to respond to it, but it occurred to me that since you write about audio equipment for a living, maybe you do not understand finance or mfg.
If you did a start up company to make gaslights, you WOULD have trouble securing a loan; not because you mfr gaslights, but because you are a start up with no assets, sales history, cash flow or collateral. It wouldn't make any difference if you mfrd gaslights, solar panels or wind turbines. However, if you were an established company that made gaslights for 35 years and your numbers were in line, then you should have no problem getting a line of credit to expand production. Banks aren't run by the little guy on the Monopoly game board, they are run by people who work for a living and follow rules established by their governing boards and the regulatory agencies.
If you are a follower of VPI's forum, fare enough. And if so, I apologise for barking at you, but this is one of my hot buttons from personal experience. Having been on the wrong side of a FUD campaign from a perfidious rival in a past business, my take on those who use the anonymity of a forum to undermine a rival is pretty harsh.
As to the financial issues, maybe this is the difference between UK and US finance. It has been all but impossible for manufacturers in this sector to extend their credit in the UK, irrespective of the health of the company or how long they have been in business. It's possibly why so many of our companies are now in with private equity companies. And they generally won't look at a brand the size of VPI.
I also know people in the magazine business, working in controlled-circulation B2B companies with good track records in growth markets, and they can't get a red cent out of their banks because 'media is dying'. Nor can they invest in migrating to web without venture capital.
So maybe things are different now, or maybe they are different here.
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Editor, Hi-Fi Plus magazine, Lun-duhnn, Ingerland, innit
I have no axe to grind with VPI. I thought I could shine a little light on the subject by asking what I thought were relevant questions. Didn't mean to step on anyone's toes.
No toes trodden on, and I don't disagree about asking questions in this matter.
Have a great Easter
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Editor, Hi-Fi Plus magazine, Lun-duhnn, Ingerland, innit
Greenthumb1 -
Nice post; I like it more than my own posts regarding this :)
You raise some good points - probably never to be addressed by the people who know best. . . VPI.
My issue is really centered around a total absence of communication, at least reliable, consistent communication. Communication to both retail organizations and the customer / end user.
I 'get' that orders exceeded expectations. This is OK - how can you really predict this accurately. What I don't 'get' is why not sit down, consider all of the process inputs including delays and such and share a very realistic adjusted timeline with consumers and retail organizations? That level of transparency would have been greatly appreciated. At least I would know a 'real' timeframe and make decisions or adjust expectations according, i.e., I would not have to play a 'guessing game' as to 'when'.
Based on a brief conversation, I would guess Matt is a good guy. I think he's over committed and doing what he thinks is best at managing the whole process. My personal opinion is that VPI would be in a much better position had there been candor in the matter from the beginning.
I'm not in any way invalidating anything you have said / typed, because I've had pretty much all the thoughts you outlined.
It's too bad - the VPI tables I've heard sounded pretty good to me. Will I end up buying /owning one. . . probably not.
Craig
I can certainly understand your frustration; I think you have been more than patient.
My guess for the lack of transparency is if VPI put all their cards on the table and explained where they are and what happened, they wouldn't have any excuses to fall back on. If the delays were justified, you would think they would explain it in terms that reasonable people could understand, and take themselves off the hook. On the other hand, if the reasons fall back onto VPI, I could certainly see why they wouldn't expose that.
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