average stereo markup
Christopher Cady
I am interested in what a typical stereo shop marks up their hi-fi
products. I am especially curious about Definitive Tech's speakers.
If any one can shed some light on the wholesale prices I would be much
obliged.
BTW- thanks to all that helped on my previous question
Sincerely
Chris
Steve Zipser (Sunshine Stereo)
Christopher Cady wrote:
>
> I am interested in what a typical stereo shop marks up their hi-fi
> products. I am especially curious about Definitive Tech's speakers.
> If any one can shed some light on the wholesale prices I would be much
> obliged.
Chris:
There is no such thing as the average or typical mark-up on hi-fi
equipment. The Margins are all over the place. However, a general rule
of thumb is
amps & preamps 35% to 45%
cables 40% to 50%
speakers 40% to 50%
CD Players 35% to 45%
Understand, that a typical dealer must make approximately 33% to 38%
to survive - not to get rich, just to survive! There is a serious
cost for rent, salaries, advertising, freight, insurance, demos goods,
etc. There is an alarming rate of attrition amongst high end
retailers.
As far as mass market goods, like receivers & speakers from Infinity &
Boston & Polk, the large retailers, like Best buys, Sound Advice, &
Circuit City, get a lot of points under the table - so there margins
at list can be as much as 60% to 65%.
Steve Zipser
Sunshine Stereo
Jeff Segawa
>I am interested in what a typical stereo shop marks up their hi-fi
>products.
It's been years since I've sold hifi, but if memory serves, markups
were steep (by percentage) on items like $25 phono cartriges and $70
headphones. Some relatively inexpensive midfi also had good markups. I
do not recall exactly what sort of markups we had on high end
products, but I'd expect that 30-35% would be typical. 30% was not
what we considered to be a great markup when all was said and done!
uh.......OH!
On Mon, 13 May 1996 22:40:17 -0400, "Steve Zipser (Sunshine Stereo)"
<z...@ix4.ix.netcom.com> wrote:
Bunch of stuff, then.
>As far as mass market goods, like receivers & speakers from Infinity &
>Boston & Polk, the large retailers, like Best buys, Sound Advice, &
>Circuit City, get a lot of points under the table - so there margins
>at list can be as much as 60% to 65%.
Infinity's cheaper speakers have higher markups, where dealer
cost is less than 50% of suggested retail, however, these tend to be
sold at discounts more often. Best Buy gets those. Circuit City has
their own line made by Infinity, and I have no idea what kind of
margin they have, but nobody else can shop them, so price matching is
not an issue. As for their more expensive stuff. Dealer cost on a
pair that retails for $3,600 is a little more than $2,000 plus
freight, unless you're buying a lot of them. In the case of a large
order they pay freight for you. Circuit City and Best Buy have never
seen these and never will. Circuit City claims that their line is
pretty much the same as the IRS V's, which is very far from true. As
they get more expensive though, they get a lot less efficient, from
92dB to 87dB when you go up the line, and the 87's get meaner after
that. Go figure.
colin
Gary S. Bekkum
I can tell you that typical markups on audio products vary from about
15 to 35-40 points gross profit. You have to remember that this is
gross profit, which doesn't take into consideration the cost of
shipping and warehousing the products, etc.
Speaker products generally have the highest margin, some up to 50
points at the manufacturers retail price, with the bread and butter
electronic lines at about 30-40 points at list retail pricing. These
days, almost no one can sell electronics at retail prices, except at
the very high end of the market, where there is less competition and
less reason for a dealer to cut his margins. Some brands (Pioneer
comes to mind) have what are called MAP pricing, or minimum advertised
pricing rules. To be competitive, most dealers sell at or below MAP
prices, which are typically 20 -25 points gross profit.
Superstores such as Best Buy and Circut City operate on much lower
margins than chain stores and small dealers. They make up for the
timy margins (often 10 -15 points on video and computer products) by
selling in volume. In addition to MAP items, most Superstores have
"loss leaders" which are sold at or below the dealer's cost, to
attract business into the store. These are most often in the dealers
weekly newspaper insert in the Sunday edition.
If you want the best stuff, and you want it new in the box, then you
can expect that the products you are buying are marked up an average
of 30 - 40 points. Accessories are a different category altogether,
as they can often sell for 2 to 3 times dealer cost.
Remember, the dealer still has to pay for his overhead before he nets
a profit. By the time rent and salaries are paid, etc. a small
dealer is lucky to be breaking even, with the competition he faces
today.
Gary
Steve Zipser (Sunshine Stereo)
Gary S. Bekkum wrote:
> Speaker products generally have the highest margin, some up to 50
> points at the manufacturers retail price,
Not always true. Magneplanar operates at from 25% to 40%, whereas
infinity is 45% to 60%
with the bread and butterr
> electronic lines at about 30-40 points at list retail pricing. These
> days, almost no one can sell electronics at retail prices, except at
> the very high end of the market, where there is less competition and
> less reason for a dealer to cut his margins. Some brands (Pioneer
> comes to mind) have what are called MAP pricing, or minimum advertised
> pricing rules. To be competitive, most dealers sell at or below MAP
> prices, which are typically 20 -25 points gross profit.
Again - misinformation. When I worked at Sound Advice, they got as
much as 50 to 55 points from Kenwood, Sony, Yamaha, and Pioneer.
> Superstores such as Best Buy and Circut City operate on much lower
> margins than chain stores and small dealers.
Bull-dingy! Again, I worked with Sound Advice's buying dept for 4
years, because I was involved in running their high-end department.
These companies really gouge their suppliers, and get all kinds of
points under the table that you do NOT know about, not to mention the
advertising co-op they get.
> They make up for the
> timy margins (often 10 -15 points on video and computer products) by
> selling in volume. In addition to MAP items, most Superstores have
> "loss leaders" which are sold at or below the dealer's cost, to
> attract business into the store. These are most often in the dealers
> weekly newspaper insert in the Sunday edition.
Don't believe that they sell at a loss for a second! They do not!
They do buy close-outs and specials, and they will dump them at low
margins - and they train their salesment to bait & switch to higher
profit items, and they force their sales people to sell garbage like
'Extended Warrantys' which are pure profit & generally not worth
purchasing (except for VCR's & Camcorders). I've seen Sound Advice
get as much as 70 point deals from Infinity, Kef, Blose, and Boston.
> Remember, the dealer still has to pay for his overhead before he nets
> a profit. By the time rent and salaries are paid, etc. a small
> dealer is lucky to be breaking even, with the competition he faces
> today.
On this point we are in total agreement!
Zip
Allan Lue
>If you want the best stuff, and you want it new in the box, then you
>can expect that the products you are buying are marked up an average
>of 30 - 40 points. Accessories are a different category altogether,
>as they can often sell for 2 to 3 times dealer cost.
Assuming I am buying an expensive component at $4,000 listed and
assuming the dealer's cost for the item is $2,400 (60%), what if I
offer to pay $3,200 for it and let the dealer know I will to turn to
another dealer if they turn me down.
The point here is they make ADDITIONAL $800 once they agree upon my
offered price, otherwise they lose this deal and another dealer pretty
much will pick it up.
This $800 will increase their gross profit by $800 and almost all the
amount becomes net profit. (no extra store hours, no additional
salary,...).
Why wouldn't they do it?
-- Allan Lue
uh.......OH!
On 18 May 1996 18:24:49 -0400, al...@alue-ss20.cisco.com (Allan Lue)
> Assuming I am buying an expensive component at $4,000 listed and
> assuming the dealer's cost for the item is $2,400 (60%), what if I
> offer to pay $3,200 for it and let the dealer know I will to turn to
> another dealer if they turn me down.
Maybe they'll do it, maybe they won't. That's why they have
franchises. If you want to drive another hundred miles to find out if
another dealer might meet you, go ahead. It ultimately depends on the
store, but unless you're willing to put the money down before they
order it, they have to stock the thing, pay for it, and then sell it
for little more than half they were counting on. Sure, they might do
it, but then again, some dealers actually have some courtesy between
themselves. If word got out that you were playing dealers against
themselves, you might not be able to get your sales tax covered. But
then again, it really depends on the dealer you asked. If it were me,
and you just said that you knew what you wanted and would pay 80% of
retail on an item with a 60% dealer cost, I would consider it. If you
then said that you were going to go to the other dealer if I didn't
give you that price, I would call the other dealer and tell him what
you were doing, and call the manufacturer to let them tell other
dealers. But, as I said, it really depends.
Steve Zipser (Sunshine Stereo)
Allan Lue wrote:
> >If you want the best stuff, and you want it new in the box, then you
> >can expect that the products you are buying are marked up an average
> >of 30 - 40 points. Accessories are a different category altogether,
> >as they can often sell for 2 to 3 times dealer cost.
>
> Assuming I am buying an expensive component at $4,000 listed and
> assuming the dealer's cost for the item is $2,400 (60%), what if I
> offer to pay $3,200 for it and let the dealer know I will to turn to
> another dealer if they turn me down.
Simple! Some dealers will take it, and some will tell you to take a
hike. It depends a lot on you, your attitude, and how you approach
the dealer. Are you just calling the dealer cold, or are you using
his time & space - in other words - his demo facilities? Are you
aware that a dealer MUST maintain a certain margin or he will surely
go out of business?
> The point here is they make ADDITIONAL $800 once they agree upon my
> offered price, otherwise they lose this deal and another dealer pretty
> much will pick it up.
There are other costs involved (service, shipping, telephone, slaries,
etc, so it is not necessarily so that the dealer is getting a 'free'
$800. To look at it like that is very short-sighted & narrow-minded.
> This $800 will increase their gross profit by $800 and almost all the
> amount becomes net profit. (no extra store hours, no additional
> salary,...).
You are obviously not in retail! It is not net profit. What if it is
an item that is extremely scarce & the dealer must wait weeks or
months to get the next widgit.
> Why wouldn't they do it?
Like I said, it depends.
Steve Zipser
Sunshine Stereo
LETS GO PANTHERS! Dem Panters - dey can shood dat puck en score dat gole
[Moderator's Note: yeah, but they even put *me* to sleep and I missed
the fourth goal... The fifth was a beauty though! RD]
Scott Johnson
In article <4nnkhn$o...@agate.berkeley.edu>,
Steve Zipser (Sunshine Stereo) <z...@ix5.ix.netcom.com> wrote:
>Allan Lue wrote:
>
>> >If you want the best stuff, and you want it new in the box, then you
>> >can expect that the products you are buying are marked up an average
>> >of 30 - 40 points. Accessories are a different category altogether,
>> >as they can often sell for 2 to 3 times dealer cost.
>>
>> Assuming I am buying an expensive component at $4,000 listed and
>> assuming the dealer's cost for the item is $2,400 (60%), what if I
>> offer to pay $3,200 for it and let the dealer know I will to turn to
>> another dealer if they turn me down.
>
>Simple! Some dealers will take it, and some will tell you to take a
>hike. It depends a lot on you, your attitude, and how you approach
>the dealer. Are you just calling the dealer cold, or are you using
>his time & space - in other words - his demo facilities? Are you
>aware that a dealer MUST maintain a certain margin or he will surely
>go out of business?
As someone who used to work at Radio Shack, in order to help fund his
college education (no flames, please!), I thought I would add my two
cents. You'd be much better off trying to dicker at a private dealer
than at a national chain. At Radio Shack, the only thing which
anybody could even think about haggling on would be discontinued
merchandise, as-is merchandise, and the like. Were I to sell a
product for less than the sticker price, I would be fired in a big
hurry.
(BTW, don't gripe to loudly at the RS salesdroid who asks you for your
name and address. RS salespeople HAVE to ask, and believe me, it
annoys us as much as it annoys you. )
>> The point here is they make ADDITIONAL $800 once they agree upon my
>> offered price, otherwise they lose this deal and another dealer pretty
>> much will pick it up.
>There are other costs involved (service, shipping, telephone, slaries,
>etc, so it is not necessarily so that the dealer is getting a 'free'
>$800. To look at it like that is very short-sighted & narrow-minded.
Agreed. Think about buying cars. A car dealer does have to sell the
cars for somewhat over invoice to make money. There are commissions
to pay, rent, electricity, insurance, repairs, inventory expenses,
advertising, etc. While occasionally it is beneficial to offer loss
leaders, a store has to maintain a certain margin to stay in business.
>> This $800 will increase their gross profit by $800 and almost all
the >> amount becomes net profit. (no extra store hours, no additional
>> salary,...). > >You are obviously not in retail! It is not net
profit. What if it is >an item that is extremely scarce & the dealer
must wait weeks or >months to get the next widgit.
In that case, you probably will pay the sticker price or not get the
item.
>> Why wouldn't they do it?
>
>Like I said, it depends.
>Steve Zipser
>Sunshine Stereo
>
>LETS GO PANTHERS! Dem Panters - dey can shood dat puck en score dat gole
>
>[Moderator's Note: yeah, but they even put *me* to sleep and I missed
>the fourth goal... The fifth was a beauty though! RD]
I wonder if Vanbiesbrouck is an audiophile????? :)
Scott
Gabe M. Wiener
In article <4nlinh$g...@biosun.harvard.edu>, Allan Lue
<al...@alue-ss20.cisco.com> wrote:
> Assuming I am buying an expensive component at $4,000 listed and
> assuming the dealer's cost for the item is $2,400 (60%), what if I
> offer to pay $3,200 for it and let the dealer know I will to turn to
> another dealer if they turn me down.
Man, you sure don't know the retail biz! What makes you believe that
every point above cost is netted profit?
> This $800 will increase their gross profit by $800 and almost all the
> amount becomes net profit. (no extra store hours, no additional
> salary,...).
What about those customers who now have to wait because the goods are
not in stock? Why should he sell it to you for $3,200 when he knows
that he can move the entire inventory of widgets for $4,000?
--
Gabe Wiener Dir., PGM Early Music Recordings |"I am terrified at the thought
A Div. of Quintessential Sound, Inc., New York | that so much hideous and bad
Recording-Mastering-Restoration (212) 586-4200 | music may be put on records
ga...@pgm.com http://www.pgm.com | forever."--Sir Arthur Sullivan
Allan Lue
>>> The point here is they make ADDITIONAL $800 once they agree upon my
>>> offered price, otherwise they lose this deal and another dealer pretty
>>> much will pick it up.
>
>>There are other costs involved (service, shipping, telephone, slaries,
>>etc, so it is not necessarily so that the dealer is getting a 'free'
>>$800. To look at it like that is very short-sighted & narrow-minded.
>
>Agreed. Think about buying cars. A car dealer does have to sell the
>cars for somewhat over invoice to make money. There are commissions
>to pay, rent, electricity, insurance, repairs, inventory expenses,
>advertising, etc. While occasionally it is beneficial to offer loss
>leaders, a store has to maintain a certain margin to stay in business.
In case I walk into (or call)a store and offer to pay $3200 on a $2400
cost comonent, the store only needs to make a phone call to order one
for me or (they have it in stock) order one to maintain exactly the
same amount of inventory. If people say shipping must be counted extra
to the $2400 cost, fine let's say $50, and of course there is that
phone call for say $5.00. Other than these I don't see where the store
needs to spend extra money just because of this deal. This is assuming
the component involved is not limited production item or too difficult
to find.
It's probably true that a high-end dealer needs to maintain an average
30%+ margin to survive. Same to car dealers, they probably need
something like 5~10% (their service department may make more net
money). But as a buyer, don't you wish pay as little as possible for
your purchasing?
Many high-end components are sold at list prices probably because all
the dealers agree with the manufacturers to sell those brands at list
prices. It's a way to prevent pricing war. Some brands even won't
allow a dealer to sell (over phone) to anyone not in its local area
unless there is no dealer exists within a reasonable distance(maybe
100 miles) from that particular customer. This policy more or less
has the whole high-end community reachs a balance - most costomers pay
40% margins so some number of high-end stores can survive. It still
works if only a small portation of buyers pay less than 40%, but it
gets into pricing war and some stores will be out of business once too
many customers are paying less than that.
For me, I like my local dealer, actually I either pay list on new
items or 10~15% off on demo ones. But as a human being, I can't stop
thinking what if I can pay less than that. Buyers always like to pay
less money for better products, isn't this a very important driving
force for economy?
Sanghoon Lee
al...@alue-ss20.cisco.com (Allan Lue) wrote:
> Assuming I am buying an expensive component at $4,000 listed and
> assuming the dealer's cost for the item is $2,400 (60%), what if I
> offer to pay $3,200 for it and let the dealer know I will to turn to
> another dealer if they turn me down.
[ quoted text deleted -- jwd ]
That's not a bad idea, but that's not a way dealers were trained to
react. No dealer, as far as I know, will let it happen for the first
30 minutes.
--
Sanghoon Lee ///\\ ||||| \\\\/ ho...@polymer.uakron.edu
{ - - } { @ @ } { ^ ^ }
^ - O
Allan Lue
It's probably true that a high-end dealer needs an average 30%+ margin
to survive. But when a customer walks in (or calls) to offer 20% over
cost for a component we are not talking about average margin. The
store only needs to make a phone call to order a component (either for
that customer or to maintain the exact number of stock items) and pay
the shipping. The question is "To do it or not to do it" when
probably most or many customers pay 40% margin.
High-end dealers sell components at list prices probably because
that's the policy they agree with the manufacturers. It's a way to
prevent pricing war. This policy maintains a balanced ecosystem in the
high-end community - buyers pay 40% margin and some number of stores
stay in business. The balance changes once too many buyers pay less
than that.
For me, actually I like my local store, I either pay list for new
items or 15% off for demo ones. But as a human being I can't stop
wishing to pay less. Isn't "Paying less for better products" one of
the natural driving forces for the economy.
[quote deletion - wsr]
Tom Ascher
This thread turns up from time-to-time and it usually leads to a
discussion of the pull we as consumers feel on one hand to purchase
items at lowest cost and on the other hand to repay dealers for
service (and also to keep them in business)!
We are not ordinary consumers and the business of marketing and
selling high-end audio is not an ordinary enterprise. There are far
higher levels of service expected and provided.
My own personal preference would be to separate the "service" aspects
of the transaction from the actual purchasing aspects. That is, I
wish there were a way of paying directly for the service,
independently of the purchase.
I've been purchasing, building, tweaking audio equipment for over 40
years. It's getting to the point where I really don't want to
PURCHASE equipment anymore. But, I do want to continue learning about
new items, technologies as they appear, and on occassion bring home an
item to audition, realize that yes, I do like the "flavor" of that
item, but not necessarily in preference to what I already own, and
return it to the dealer.
I've purchased enough items from my local source that they don't mind
my coming in now and then to audition something new, or bring it home
to listen to. But I fear that my purchases will become fewer and less
frequent, but this doesn't abet my need to hear new items from time to
time.
I have suggested paying some kind of fee or rental, or retainer for
the service I receive and the opportunity to audition new equipment
from time- to-time, but my local dealer is such a nice person, he
never responds.
I guess the idea is that on occassion I will feel so guilty about
auditioning so many things without buying that I will on occasion
purchase another item even though I don't really need!
But I wonder if any dealers routinely have a pay for audition
agreement with customers, and if so how this works out.
=====================================================================
Tom Ascher Internet: u15...@uicvm.cc.uic.edu
University of Illinois at Chicago Phone: (312) 413-3665
Mitchell Erblich
With respect to high-end dealers, it also depends on the relationship
between the dealer and customer. Sometimes, If the customer has been
buying from a dealer for a number of years, even on non-discounted
items, the dealer can and will discount.
It has been done for me on new items, up to 20% off.
Mitchell Erblich : merb...@ossi.com
Richard D Pierce
In article <4nqmat$p...@biosun.harvard.edu>, Allan Lue
<al...@alue-ss20.cisco.com> wrote:
> It's probably true that a high-end dealer needs an average 30%+
> margin to survive. But when a customer walks in (or calls) to offer
> 20% over cost for a component we are not talking about average
> margin. The store only needs to make a phone call to order a
> component (either for that customer or to maintain the exact number
> of stock items) and pay the shipping. The question is "To do it or
> not to do it" when probably most or many customers pay 40% margin.
Many, many manufacturers will not ship equipment on onesy-twosy
orders. Many require a minimum order. Others will not give the best
margin for a single compoenent order.
> High-end dealers sell components at list prices probably because
> that's the policy they agree with the manufacturers. It's a way to
> prevent pricing war. This policy maintains a balanced ecosystem in
> the high-end community - buyers pay 40% margin and some number of
> stores stay in business. The balance changes once too many buyers
> pay less than that.
And if there are dealers and manufacturers currently engaged in such
practices (known as, among other things, "fair trade"), then they are
breaking Federal law explicitly prohibiting such practices.
It's both amusing and saddening to see all of the very naive notions
being bandied about how pricing and the retail business works.
Sigh.
--
| Dick Pierce |
| Loudspeaker and Software Consulting |
| 17 Sartelle Street Pepperell, MA 01463 |
| (508) 433-9183 (Voice and FAX) |
Allan Lue
In article <4npq0n$2...@eyrie.graphics.cornell.edu> ga...@pgm.com
(Gabe M. Wiener) writes:
> In article <4nlinh$g...@biosun.harvard.edu>, Allan Lue
> <al...@alue-ss20.cisco.com> wrote:
>> Assuming I am buying an expensive component at $4,000 listed and
>> assuming the dealer's cost for the item is $2,400 (60%), what if I
>> offer to pay $3,200 for it and let the dealer know I will to turn to
>> another dealer if they turn me down.
> Man, you sure don't know the retail biz! What makes you believe
> that every point above cost is netted profit?
You don't seem to get the point, the dealer makes $800 gross once
he(she) say yes to the deal, loss the deal if it's a no. The store
won't change a bit just because of this deal. Add $50 for shipping and
$3 for the phone call if you insist that's extra to the 60% cost. So
almost $750 becomes net profit. Okay, maybe some salesperson's
commission if it's not a one man store.
I am not saying every customer offers 20% over cost, I am saying some
day some particular customer makes this offer. Then the question
becomes "yes or no" for the dealer.
Certainly some stores will be out of business once too many buyers pay
only 20% over cost. Pricing war is sure to happen.
>> This $800 will increase their gross profit by $800 and almost all the
>> amount becomes net profit. (no extra store hours, no additional
>> salary,...).
> What about those customers who now have to wait because the goods
> are not in stock? Why should he sell it to you for $3,200 when he
> knows that he can move the entire inventory of widgets for $4,000?
This is a concern only if the dealer has absolute fixed amount of
allocation for that particular component. For example 5 per month, no
more. As long as the dealer can order the amount they can sell, this
would be a very small issue, not even an issue if they have enough
inventory to cover the time for the extra 1 item(normally they will
order more than 1) to be delivered.
-- Allan Lue
aa...@uruguay.it.earthlink.net
A lot also depends on other factors. If you shopping at a chain store
you are more inclined to get the best deal if you push. The mom and
pop stores sometime get a little "stuck up" and you get killed. The
best time to buy is the last day or two of the fiscal month as quotas
are often made or not then. I know I work at a large chain. The
Suoer high end stuff you won't find at the chain stores though.
Take care
Larry
Jeff Bernhard
Allan Lue (al...@alue-ss20.cisco.com) wrote:
: It's probably true that a high-end dealer needs an average 30%+ margin
: to survive. But when a customer walks in (or calls) to offer 20% over
: cost for a component we are not talking about average margin. The
: store only needs to make a phone call to order a component (either for
: that customer or to maintain the exact number of stock items) and pay
: the shipping. The question is "To do it or not to do it" when
: probably most or many customers pay 40% margin.
I'm mystified: Why should the dealer give you such a deal, if it
doesn't help his bottom line?
With some brands, the dealer must order a certain minimum to defray
(perhaps entirely) shipping costs, which can be considerable depending
on the size and weight of the item. Additionally, there is an
opportunity cost, that by tying up some of his resources to order the
item, there other items he might otherwise order that have to wait.
There is additional effort on his part, time and energy, used to
ensure the item arrives on time in good condition, and if this doesn't
occur, to track the shipment and perhaps return a damaged item and
request a replacement. This doesn't seem like much: What do such
efforts 'cost'? What did the dealer 'pay'? Well, salaries and the
like, among other things. Now, why should you benefit from all this
and not give some compensation in the process? Why should you expect
this and not add to his bottom line? He's running a *business*. The
judgement of what is fair varies, I guess, but having experienced the
retail side of life, I know that a 40% margin just isn't that fat. 20%
is absurd. One last thing: If the item is hard to get or in limited
supply, isn't it reasonable to sell it to someone willing to pay that
40% margin? It isn't as if that extra 20% is going to lead to early
retirement or allow him to shut his doors for the next week or two and
take a vacation ...
--
Jeffrey Bernhard Harris Computer Systems Corp.
Jeff.B...@mail.hcsc.com Voice: (954) 973-5496 Fax: (954) 977-5580
*** The opinions expressed herein are mine, not those of my employer! ***
Rick Becker
In article <4nqq4t$4...@agate.berkeley.edu> Tom Ascher
<U15...@UICVM.CC.UIC.EDU> writes:
>I've purchased enough items from my local source that they don't mind
>my coming in now and then to audition something new, or bring it home
>to listen to. But I fear that my purchases will become fewer and less
>frequent, but this doesn't abet my need to hear new items from time to
>time.
I've bought over half of my system, used, from a local dealer and
continue to audition used equipment from time to time. I give them an
honest opinion of the pieces when I return them. On occasion, I turn
up a problem they didn't know existed.
To show my appreciation I've been known to show up at Christmas
time with a box full of cookies from the finest Italian bakery in
town.
Rick Becker
Rochester, NY
Allan Lue
>And if there are dealers and manufacturers currently engaged in such
>practices (known as, among other things, "fair trade"), then they are
>breaking Federal law explicitly prohibiting such practices.
>
>It's both amusing and saddening to see all of the very naive notions
>being bandied about how pricing and the retail business works.
>
I am not an expert in laws. But how about Saturn car dealers, they all
sell cars at MSRP and they are much more visible than high-end audio
dealers in this country. Do they break any laws?
Another question: some manufacturer won't allow their dealers to sell
equipments to non-local customers, does this break any laws?
-- Allan Lue
Gabe M. Wiener
In article <4nse2i$n...@eyrie.graphics.cornell.edu>,
Allan Lue <al...@alue-ss20.cisco.com> wrote:
>You don't seem to get the point, the dealer makes $800 gross once
>he(she) say yes to the deal, loss the deal if it's a no. The store
>won't change a bit just because of this deal. Add $50 for shipping and
>$3 for the phone call if you insist that's extra to the 60% cost. So
>almost $750 becomes net profit. Okay, maybe some salesperson's
>commission if it's not a one man store.
And once again, you sure don't know retail.
If a storekeeper has invested X number of dollars in a given month
into inventory, and if he knows full well that he can move each widget
for a $4,000 profit, why would he want to sell it to you for less when
he knows full well that he can move the whole inventory for $4K
profit?
Your position is senseless from the retailer's perspective.
>Certainly some stores will be out of business once too many buyers pay
>only 20% over cost. Pricing war is sure to happen.
But they DON'T happen in high-end audio. Dealers keep their margins
pretty static.
>This is a concern only if the dealer has absolute fixed amount of
>allocation for that particular component. For example 5 per month, no
>more. As long as the dealer can order the amount they can sell, this
>would be a very small issue, not even an issue if they have enough
>inventory to cover the time for the extra 1 item(normally they will
>order more than 1) to be delivered.
You still haven't answered the question. For X amount of outlay, why
should the dealer sell a product for less than he knows the market
will bear?
Allan Lue
>I'm mystified: Why should the dealer give you such a deal, if it
>doesn't help his bottom line?
>
>With some brands, the dealer must order a certain minimum to defray
>(perhaps entirely) shipping costs, which can be considerable depending
>on the size and weight of the item. Additionally, there is an
>opportunity cost, that by tying up some of his resources to order the
What's the probability that everything goes wrong just because of this
particular deal? You can't apply worst case condition to every single
event.
>item, there other items he might otherwise order that have to wait.
>There is additional effort on his part, time and energy, used to
>ensure the item arrives on time in good condition, and if this doesn't
>occur, to track the shipment and perhaps return a damaged item and
>request a replacement. This doesn't seem like much: What do such
>efforts 'cost'? What did the dealer 'pay'? Well, salaries and the
>like, among other things. Now, why should you benefit from all this
>and not give some compensation in the process? Why should you expect
>this and not add to his bottom line? He's running a *business*. The
>judgement of what is fair varies, I guess, but having experienced the
>retail side of life, I know that a 40% margin just isn't that fat. 20%
>is absurd. One last thing: If the item is hard to get or in limited
>supply, isn't it reasonable to sell it to someone willing to pay that
>40% margin? It isn't as if that extra 20% is going to lead to early
>retirement or allow him to shut his doors for the next week or two and
>take a vacation ...
It's already said that this applies better to non-limited production,
not difficult to order items.
As some people already said, "It depends", I raised the question and I
am glad to see so many responses.
-- Allan
HiFiJones
(A ponderance of readers reflect on the dealer markup.)
I'm a dealer. I think I'm a good one. I spend a lot of time with my
customers. Most sanguine posters here understand the fate of my lot,
and *believe me* this isn't directed to them. Mature music lovers
tend to be sensitive to human needs.
But for the dunderheads who drive good dealers out of business: I for
one tire of the priggish belief that dealers should exist as
profit-free conduits (and tutors) for wankers.
My question to them: Would you take the risk to go on your own -- quit
your job and open a store -- without a guaranteed paycheck? Would you
peddle your services, submit yourself to invisible costs, fret over
the mortgage, the bills, the commisions, and spend *a lot of* time,
without security, as a favor to hobbyists who more often then not are
blown with the opinion wind before they return to their cubicle and
401K plan? All for the love of your hobby? Guess what? It's our
hobby, too. It's our love.
I don't include those entering the hobby. I was once a student with
limited funds, and still deeply appreciate the patience of folks at
Opus Three in Memphis when I had braces, no shoes and a ponytail. I
spent very little money with David Hardin there in the early 70s, but
he treated me (sorta) well regardless.
I'm talking about wankers whose hobby seems to be exploiting the
dealer network and then subverting it.
It's a business. Like any business, there's good and there's bad.
Find a good one and enter a mutual support system. Bad dealers drive
customers elsewhere. Wankers drive out good dealers and encourage the
bad.
If cost is your main concern, buy used gear. I know of no other
business more geared to the latest and greatest. You can buy
fantastic gear for a song.
Ken Askew
Alchemedia Digital Systems
Rick Becker
In article <4o04gd$i...@agate.berkeley.edu> ga...@pgm.com (Gabe M. Wiener)
writes:
> You still haven't answered the question. For X amount of outlay, why
> should the dealer sell a product for less than he knows the market
> will bear?
Basically, market knowledge is always incomplete and ever-changing.
From my experience in retail furniture, I can offer some possible
answers.
1. I've got three 250 watt/channel solid state stereo amps that have
been sitting on the shelf for the past six months and my customers are
asking for single ended triode monoblocks. I need to move my
inventory dollars into different products.
2. I haven't sold a brand K product in a while and I want to keep the
franchise active,
3. If my dollar volume with brand Y is over $50K per year, I qualify
for a 10% discount on my wholesale cost. A few more sales will put me
into this bonus category.
4. Customers are asking for silver faceplates and all my stock is in
black.
5. The manufactures rep persuaded me to stock each size in the
speaker line, but the mini-monitor just hasn't sold.
6. (not from furniture experience) The dealer across town caries
three lines that just got rave reviews in Stereophile, and one of my
lines just got panned. I can see it is going to be a slow month.
7. The State is rebuilding the bridge just down the street, and
access to my store is severely limited. Customer traffic is way off.
8. A passing truck kicked up a stone that cracked my front window,
and I've got to get it replaced, fast.
9. A customer walks in and wants to by a hundred watt amp from me,
but can buy another brand from another local dealer for less (he's not
very knowledgable or particular), or can mail order the same amp I
sell for less. (I spend alot of time with this customer, imparting
knowledge of my brand, and explain the risks and inconvenience of mail
order, the back-up service and return policy we offer, etc. And when
they leave without buying, I reach into the lower drawer of my desk,
pull out my voodoo doll and stick a pin in the lower lumbar region, so
the customer is now on the market for a new mattress, and will be back
again, soon! ) :>
Except for number 6, all of these have happened or are variations of
what I've experienced in my retail furniture business. (Just kidding
about the voodoo doll, but obviously the thought has occured to me...)
And the list could go on and on...
Rick Becker
Rochester, NY
Daniel Baker
These are just some thoughts on dealers and high end audio in general,
not (necessarily) a response to particular points brought up before.
Note that I am not presently in the industry. If there are inaccurate
details or misperceptions, I invite follow-up.
High end audio dealers have a much closer relationship with the
manufacturer than most retailers. Often there is an agreement not to
sell below a certain price relative to MSRP. A dealer sometimes
agrees not to sell outside of one's "region" -- so if Soundex and
Sound by Singer both carry a certain line, Singer might not be
supposed to sell to me in Philadelphia because Soundex is closer. Of
course, it depends both on the manufacturer and the dealer what rules
exist and how steadfast they are. A manufacturer might be reluctant
to drop a dealer if they sell a lot of equipment (and other dealers
would be unlikely to take up the slack), and a dealer might stick to
an agreement with a manufacturer who has a hot product that the
manufacturer knows will sell with or without that dealer. Usually
it's a more respectful working relationship than I'm making it sound,
but business is business sometimes.
I've found that a "good" deal on most pieces of equipment is 10% below
MSRP. If the product is in high demand, you might get 5% below. In
general, I don't buy from dealers who don't negotiate, either on
price, included accessories, delivery, installation, etc.
Also realize that in high end audio, often the dealer is a bigger
business than the manufacturer. That's not usually the case in most
industries, and can affect who has more influence in the
manufacturer/dealer relationship. Look at the ads in Stereophile and
other magazines -- some of the biggest ones are from dealers
(tangentially, many dealers could do with advice from a graphic design
firm!).
Traditional dealers (a store with listening rooms, knowledgable
salesmen, usually stocking numerous lines) are *extremely* important
to high end audio. I can't think of an industry where the retailer is
more important, except perhaps automobiles. It is crucial that
potential buyers be able to audition properly set-up equipment,
preferably with the ability to do A/B comparisons with other pieces.
Nothing can take the place of listening for yourself (certainly not
reviews, though they can provide some guidance). Since associated
equipment and room acoustics can have a profound effect on the
evaluation of a piece in question, one should be able to substitute
various pieces on the same system in the same room. Usually this
would be done at a dealer, unless the consumer can arrange loans from
more than one dealer. Speaking of which, a good dealer will let you
borrow the equipment for a weekend, to try it in your own system and
for an extended audition. Local dealers are generally the only
outlets who can do this.
High end audio also needs visibility and opportunities to expose new
people to the beauty of well-reproduced music. A casual shopper might
stop by a dealer, either out of curiosity or the intention to buy mass
market trash, and be introduced to the high end. Dealers fill this
role.
A continuing relationship between the dealer and the consumer is also
important. If there is an ongoing dialogue, a dealer can better
advise a customer and help the customer's system to evolve (if that is
what the customer wants). It's important to many audiophiles to be
able to drop by their favorite dealer to see what's new or just to
listen to a system other than his own -- and be recognized. It's sort
of cool to be able to walk in a store and have people know your name,
what sort of system you have, what music you like, etc. Cheers for
the audiophile.
This is why I strongly advise against mail order. Mail order is
diametrically opposed to the high end ethos -- you can't really
audition equipment properly (even with 30 day money back guarantees),
and rarely is there an ongoing relationship between dealer and
customer. Even if it is possible in certain circumstances for a mail
order place to fill your needs, I still advise against it -- I think
we should give that business to regular dealers and support them, for
the sake of future purchases, other audiophiles, and the high end in
general. Some places, like Audio Advisor, are OK for accessories, and
actually they do try to serve their customers well. Still, though, I
don't like the concept of mail order for high end audio. Mail order
has ruined some types of retailers (small computer stores, for
example), and it would be a tragedy for that to happen to this
industry.
Similarly, unless you have had a bad experience with a local dealer or
only a remote dealer carries a product you want, I advise people to
patronize local dealers -- or at least make the drive to actually go
to a dealer you are thinking of buying from. While having something
shipped to you from a real dealer isn't as bad as buying mail order
from a warehouse, it's still best to make the trek in person.
Finally, it is crucial for a dealer to make their listening rooms
available to people who might not be thinking of buying right then and
there, particularly young people. Decision making about new
components can take some time, and sometimes repeated exposure is
necessary to appreciate or perceive musically significant differences
in sound. And as for young or aspiring audiophiles, it's great when
dealers will let someone come in and listen without even the thought
of buying something for a while, to introduce them to the high end.
Usually, future purchases will be made by that person. It might be a
year, but it will probably happen. When I was just getting into high
end audio, an invaluable experience was when a salesman at Soundex
spent a lot of time with me a couple of afternoons (once I was there
for five hours) just talking about music and equipment, and listening
to various systems. I told him that I wasn't remotely thinking of
buying anything, but he was still receptive. And I've ended up making
many purchases at Soundex since. He is no longer at Soundex, but I
owe a lot to Ira Segall, that salesman.
Hopefully some of these thoughts are interesting and useful. Sorry
about the length -- "I didn't have time to make it shorter." Happy
trails,
--Daniel Baker
HiFiJones
Jeff Swauger
Daniel Baker wrote:
>
>
> High end audio also needs visibility and opportunities to expose new
> people to the beauty of well-reproduced music. A casual shopper might
> stop by a dealer, either out of curiosity or the intention to buy mass
> market trash, and be introduced to the high end. Dealers fill this
> role.
Definitely true. Most people will never find even the "low" end of
decent audio gear that many specialty dealers sell (NAD, AA, etc.)
because it's just not at Circuit City, Sears, Silo, etc.
One store here had what, at the time I thought was a suicidal idea,
but has worked out incredibly well for them. They moved into a strip
mall attached to a Circuit City. People who come out of CC dazed and
confused, stressed by all the high pressure salesdroids, and the
general cacophany of the place and the inability to tell what anything
looks or sounds like, often wander into this shop. It's an oasis of
calm, quiet, well decorated space with gear they've never seen, with
good sales help (non-commission), decent listening rooms, and prices
not that much higher than CC for the bottom lines they carry, which
are much better than CC stuff. They offer good service, delivery,
installations, custom work, etc. Everything a high end store should
do. They will negeotiate some on price, more on the low end stuff than
on the high end, but they aren't inflexible. And they apparently are
doing well. I've been in there buying things when CC shoppers stagger
in, and the reactions are amusing. People never thought a place like
this store could exist, and seem really amazed.
I bought my new Proton TV there. It was a little more than I could
mail order it for, but we negeotiated a price we both could live with
between retail and dirt bottom, and I was happy to pay the difference
for the level of service they provided me on this. Generally I prefer
to go with a local dealer, unless it's a product I want and no one
around locally carries it.
HiFiJones
Scott Johnson
In article <4nqdhv$r...@agate.berkeley.edu>, Allan Lue
<al...@alue-ss20.cisco.com> wrote:
[quote deletion - wsr]
>In case I walk into (or call)a store and offer to pay $3200 on a $2400
>cost comonent, the store only needs to make a phone call to order one
>for me or (they have it in stock) order one to maintain exactly the
>same amount of inventory. If people say shipping must be counted extra
>to the $2400 cost, fine let's say $50, and of course there is that
>phone call for say $5.00. Other than these I don't see where the store
>needs to spend extra money just because of this deal. This is assuming
>the component involved is not limited production item or too difficult
>to find.
That may work IF:
You are willing to wait for the item to be AND pick it up IMMEDIATELY,
so that the transaction does not effect his inventory.
-AND-
You make the purcahse AS-IS, with absolutely no warranty from the
dealer WHATSOEVER. This includes the basic warranties of being able
to return merchandise that is DOA.
-AND-
You expect absolutely NO service from the dealer, other than that
which you are willing to pay for up front.
All these niceties that we take for granted in a retail transaction
are built into the price of that which we buy. It is naive to think
that the only costs associated with retail are wholesale price of the
goods, shipping, etc.
>It's probably true that a high-end dealer needs to maintain an average
>30%+ margin to survive. Same to car dealers, they probably need
>something like 5~10% (their service department may make more net
>money). But as a buyer, don't you wish pay as little as possible for
>your purchasing?
In general, yes. But any skilled negotiator tries to figure out how
much the dealer has to sell the widget for, in order to break even,
and then starts from there. You should add some to that figure, as
the dealer is entitled to a little profit, after all that is why he is
in business in the first place.
Marching in and offering to pay invoice and not a cent more will get
you nowhere.
>Many high-end components are sold at list prices probably because all
>the dealers agree with the manufacturers to sell those brands at list
>prices. It's a way to prevent pricing war. Some brands even won't
>allow a dealer to sell (over phone) to anyone not in its local area
>unless there is no dealer exists within a reasonable distance(maybe
>100 miles) from that particular customer. This policy more or less
>has the whole high-end community reachs a balance - most costomers pay
>40% margins so some number of high-end stores can survive. It still
>works if only a small portation of buyers pay less than 40%, but it
>gets into pricing war and some stores will be out of business once too
>many customers are paying less than that.
[quote deletion - wsr]
One can question the legality of these pricing practices, though.
Just heard on the news yesterday that the feds are going afterToys R
Us, who have apparently been pressuring their suppliers to keep these
suppliers from selling to Costco and the rest of the warehouse crowd.
This may or may not bviolate anti-trust law.
But this is rapidly diverging from audio, so I'll stop here....
Scott
anshu (a.) prasad
Gabe M. Wiener (ga...@pgm.com) wrote:
: if he knows full well that he can move each widget
: for a $4,000 profit, why would he want to sell it to you for less
If the dealer is unable to increase volumes of sales and is receiving
full retail price for every unit, then certainly the dealer will not
sell for less than full retail price. But, my experience is that this
is generally not the case. Supply isn't that limited and demand isn't
that high, at least not here in Canada. Perhaps the situation is
different in the US.
: You still haven't answered the question. For X amount of outlay, why
: should the dealer sell a product for less than he knows the market
: will bear?
I believe the market, at least in Canada, is unable to bear current
high-end retail prices and thus dealers are forced to sacrifice margin
for increased volume. I don't think any dealer I've ever spoken to
expected full retail price from anyone, and I've easily negotiated
discounts of 25 - 35% off list price for new items.
--
,> )\ `a_ Anshu Prasad _a' /(
( _ )/ /{_ ~~ NORTEL ~ _}\ \( -
`(,)_,)/ Ottawa, Ontario, Canada \(,_(,\\
,<_ ,<_. Opinions are my own, not my employer's ._>, _>,``==>
Allan Lue
>But they DON'T happen in high-end audio. Dealers keep their margins
>pretty static.
I never say that will happen in our real world, since now it's a
balanced economic ecosystem.
>>This is a concern only if the dealer has absolute fixed amount of
>>allocation for that particular component. For example 5 per month, no
>>more. As long as the dealer can order the amount they can sell, this
>>would be a very small issue, not even an issue if they have enough
>>inventory to cover the time for the extra 1 item(normally they will
>>order more than 1) to be delivered.
>
>You still haven't answered the question. For X amount of outlay, why
>should the dealer sell a product for less than he knows the market
>will bear?
You still don't seem to understand the the MARGINAL financial effect
for a particular item sold here. Let's say a particular dealer will
sell five $4000 amps for January (God knows that), and assuming
inventory is not a concern for him
In God's planned spreadsheet he makes 5 x 4000 x 40% = $8000 gross
profit on this component. Now a customer(the sixth one, not forseen by
God) says he can only afford $3200 for this amp, so the dealer makes
additional $800 gross once he says okay or the buyer walk away (to
another store for the same or a different component). Now the gross
margin is $8000 + $800 = $8800 once the deal is done. The dealer
actually does better than what God planned for him. And once again
assuming inventory is not an big issue here.
-- Allan Lue
Stereo Boy
People who find a good dealer like you are very lucky indeed. In my
case, I have yet to find a good dealer, so I do all my buying via
mailorder. I dont want to, but I must. I have NEVER found a dealer
who knew more than I did, or who actually had some technical EE
training. No, the ones I have met know much less than I do, and all
thier knowledge is gleaned from Stereophile, TAS and the manufacturers
brochures.
I find it kind of depressing.
Ty Chamberlain
DiscoVision - THE WORLD ON A SILVER PLATTER!!
Ster...@aol.com
Steve Zipser (Sunshine Stereo)
Allan Lue wrote:
> In God's planned spreadsheet he makes 5 x 4000 x 40% = $8000 gross
> profit on this component. Now a customer(the sixth one, not forseen by
> God) says he can only afford $3200 for this amp, so the dealer makes
> additional $800 gross once he says okay or the buyer walk away (to
> another store for the same or a different component). Now the gross
> margin is $8000 + $800 = $8800 once the deal is done. The dealer
> actually does better than what God planned for him. And once again
> assuming inventory is not an big issue here.
Well Allan,
I find that if I do that, then this customer expects these discounts
on every product he buys - and a situation like that is potentially
lethal to the retailor's business. Also, it can cause 'political'
problems with other dealers for the same item. Your logic is not
faulty, you just aren't looking at the big picture. You are selfishly
examining only your own little mini situation.
Zip
Steve Zipser (Sunshine Stereo)
Stereo Boy wrote:
>
> People who find a good dealer like you are very lucky indeed. In my
> case, I have yet to find a good dealer, so I do all my buying via
> mailorder.
Where do you live, that this is so?
> I dont want to, but I must. I have NEVER found a dealer
> who knew more than I did,
There are plenty of good quality, knowlegeable, and most importantly
EXPERIENCED dealers out. That you've never come across one is
absolutely fascinating to me (and surprising as well!).
> or who actually had some technical EE
> training.
It is not necessary to be an EE to be a good salesman, to be a good
listener, to be an audiophile, or to be a music lover.
> No, the ones I have met know much less than I do, and all
> thier knowledge is gleaned from Stereophile, TAS and the manufacturers
> brochures.
Guess what, Charlie Brown. Most of the good dealers I know have been
around the 20+ years I have in the business - again, where do you live
that you can't find a competent dealer???
ZIP
LETS GO PANTHERS! Its the YEAR OF THE RAT!!!
Stewart Pinkerton
ster...@aol.com (Stereo Boy) writes:
>People who find a good dealer like you are very lucky indeed. In my
>case, I have yet to find a good dealer, so I do all my buying via
>mailorder. I dont want to, but I must. I have NEVER found a dealer
>who knew more than I did, or who actually had some technical EE
>training. No, the ones I have met know much less than I do, and all
>thier knowledge is gleaned from Stereophile, TAS and the manufacturers
>brochures.
>I find it kind of depressing.
But probably not so depressing as paying for the overheads on a hi-fi
store and carefully designed listening room so that know it all nerds
can come in and listen for hours on end to all the latest gear and
then buy it by mail order 'cos they can save a few bucks. Ultimately,
this will destroy the retail industry and you'll have to rely on
Stereophile reviews because there will be nowhere apart from hi-fi
shows where you can actually listen to the new stuff...........
--
Stewart Pinkerton | If you can't measure what you're making,
A S P Consulting | how do you know when you've got it made?
(44) 1509 880112 |
Richard Carlson
In article <4o2gh7$k...@agate.berkeley.edu> Daniel Baker
<ba...@cvrc.med.upenn.edu> writes:
>These are just some thoughts on dealers and high end audio in general,
... stuff deleted
>borrow the equipment for a weekend, to try it in your own system and
>for an extended audition. Local dealers are generally the only
>outlets who can do this.
... more deleted
>This is why I strongly advise against mail order. Mail order is
>diametrically opposed to the high end ethos -- you can't really
>audition equipment properly (even with 30 day money back guarantees),
>and rarely is there an ongoing relationship between dealer and
>customer. Even if it is possible in certain circumstances for a mail
>order place to fill your needs, I still advise against it -- I think
>we should give that business to regular dealers and support them, for
>the sake of future purchases, other audiophiles, and the high end in
>general.
... even more deleted
Well, many of us don't _have_ a local dealer; although there a couple
of good, service-oriented "mass-market-style" shops here -- and I've
spent considerable $$$ at both over the years -- once I moved beyond a
certain level, I had little choice to go mail order. For example,
last time I looked, you simply could not buy a CD transport here, or a
preamp other than Adcom or Forte. One dealer does have a "high-end
room" with B&W, Forte, Rotel equipment, and allows home trial, but
choice is very limited (as are comparison opportunities), and there
has been enormous turnover in sales staff. So while I'd love to have
an ongoing relationship with a local dealer, it just isn't possible
here. That means relying on reviews and mail-order, or _occasional_
road trips to dealers elsewhere (which of course doesn't lend itself
to weekend home trials).
Centrally isolated in central PA,
Rich
* Rich Carlson Psychology Department, Penn State University *
* 613 Moore Building, University Park, PA 16802-3106 *
* C...@PSU.EDU (814) 863-1736 fax (814) 863-7002 *
Evan Champion
HiFiJones wrote:
> It's a business. Like any business, there's good and there's bad.
> Find a good one and enter a mutual support system. Bad dealers drive
> customers elsewhere. Wankers drive out good dealers and encourage the
> bad.
I buy computer equipment direct from distributors and audio/video
equipment from reputable stores.
The reasoning: I know exactly what I want and who I want to buy it
from when it comes to computer equipment. It has to be very esoteric
or a brand new, revolutionary technology for me to need someone to
explain things to me, and if it comes to that point a store isn't
going to be able to help me anyway.
When I look at audio/video equipment, however, I'm at a loss. I have
to rely on what other people think (combined with my own observations
through auditioning equipment, of course) to make decisions about what
equipment suits my needs best. I need help, and I'm willing to pay
for it.
It all comes down to service. You tip a bartender well for mixing a
good drink, your barber for a great hair cut, and I don't think
markups on equipment are any different. I have absolutely no problem
at all paying markups, even significant markups, if I feel that I am
getting value out of the arrangement. I think that probably most
other people feel the same way.
Evan
--
Evan Champion * Director, Network Operations
mailto:ev...@synapse.net * Directeur, Exploitation du reseau
http://www.synapse.net/ * Synapse Internet
Allan Lue
In article <4o4sh4$m...@agate.berkeley.edu> "Steve Zipser (Sunshine Stereo)"
<z...@ix2.ix.netcom.com> writes:
> I find that if I do that, then this customer expects these discounts
> on every product he buys - and a situation like that is potentially
> lethal to the retailor's business. Also, it can cause 'political'
> problems with other dealers for the same item. Your logic is not
> faulty, you just aren't looking at the big picture. You are
> selfishly examining only your own little mini situation.
Hey, this is a discussion, isn't it? Do we allow one to exploit every
potential scenario in a discussion? especially when you also agree
the logic is not faulty here.
Can a comsumer 'think' about paying lower prices?
I don't want to see a pricing war happen either.
-- Allan
Steve Zipser (Sunshine Stereo)
Just another observation on this thread. As one with many years of
retail experience in high end, I have found that the level of grief
and aggravation one recieves from a customer is directly proportional
to the discount!
The less a customer pays, generally, the more he wants.
Zip
PS: LETS GO PANTHERS
Mike Ford
In article <4o55co$b...@eyrie.graphics.cornell.edu>,
Stewart Pinkerton <a...@borealis.com> wrote:
>ster...@aol.com (Stereo Boy) writes:
>
>>People who find a good dealer like you are very lucky indeed. In my
>>case, I have yet to find a good dealer, so I do all my buying via
>>mailorder. I dont want to, but I must. I have NEVER found a dealer
>>who knew more than I did, or who actually had some technical EE
>>training. No, the ones I have met know much less than I do, and all
>>thier knowledge is gleaned from Stereophile, TAS and the manufacturers
>>brochures.
>
>>I find it kind of depressing.
>
>But probably not so depressing as paying for the overheads on a hi-fi
>store and carefully designed listening room so that know it all nerds
>can come in and listen for hours on end to all the latest gear and
>then buy it by mail order 'cos they can save a few bucks. Ultimately,
>this will destroy the retail industry and you'll have to rely on
>Stereophile reviews because there will be nowhere apart from hi-fi
>shows where you can actually listen to the new stuff...........
A dealer once coined the phrase to me "tire kicking audiophile". I do
appreciate the toil of the retail store owner, this is a hell of a
time to be in retail for any product. I have heard a whole bunch of to
be frank total BS about how the retail store serves the customer. Some
customer service I assume can't be avoided, but many retail stores
work very hard at it. Because most consumers are niave, in real estate
the agent most people "think" is working for them has to explicitly
state in the final contract that indeed in all but a very few cases
they are paid by the seller and ethically acting in the sellers
interest.
The job of the front line of retail is to get you to buy as much as
possible at the highest profit margins. The only frequent
circumvention of this is the spiff, where the manufacturer pays the
salesperson directly to act as their agent instead of the stores and
push their products. A small fraction of retail people combine being
nice, social, informed on products, with personal interest in them and
some tiny sense of ethical responsibility for the poor consumer.
Generally they are kept away from customers as much as possible (ie.
Steve at Stereo Design in San Diego).
Retail exists because it is more profitable right now for
manufacturers, or in some cases impossible to bypass. The number one
item Porsche owners dislike are the dealers. Owners tell that to
Porsche all the time in marketing surveys etc. When Porsche attempted
to respond to this by changing the dealer structure so that people
could buy directly and dealers would be paid flat fees for showing
cars, the lawsuits were a mile deep.
Times are changing, and the internet will be part of it. I feel pretty
comfortable that if I ask a product question here I am going to get
some of the best information available. A balanced accounting of good
and bad points, with a general flavor of what product ownership is
really like. The best that a dealer can give me is their own biased
view, and maybe a listen or home trial. I do value the latter, and I
am willing to pay for it. Retail has no reason to fear me.
Customers don't kill retail stores. Manufacturers though often pull
the plug, and that is who should be feared. The direct channel is now
well proven for a variety of products, and so are many non retail
alternatives like the Home Shopping Channel stuff. Should product
makers decide they can make one dime more via another channel, they
will.
Have a nice day, and no offense intended, just what I see as the
facts.
Allan Lue
In article <4o2gdc$j...@biosun.harvard.edu> sjoh...@hevanet.com
(Scott Johnson) writes:
[ quoted text deleted -- jwd ]
> That may work IF:
>
> You are willing to wait for the item to be AND pick it up
> IMMEDIATELY, so that the transaction does not effect his inventory.
>
> -AND-
>
> You make the purcahse AS-IS, with absolutely no warranty from the
> dealer WHATSOEVER. This includes the basic warranties of being able
> to return merchandise that is DOA.
>
> -AND-
>
> You expect absolutely NO service from the dealer, other than that
> which you are willing to pay for up front.
Why???
They can simply say no if they don't feel it's good for them to sell a
component 20% off with full warranty and service. Not to say the
warranty is more the responsibility of the manufacturer? Is the store
going to refund some of the difference to the manufacturer? I will say
that's truely honest if it happens.
No one forces anyone to do anything in this case.
-- Allan
Stereo Boy
> But probably not so depressing as paying for the overheads on a
> hi-fi store and carefully designed listening room so that know it
> all nerds can come in and listen for hours on end to all the latest
> gear and then buy it by mail order 'cos they can save a few
> bucks. Ultimately, this will destroy the retail industry and you'll
> have to rely on Stereophile reviews because there will be nowhere
> apart from hi-fi shows where you can actually listen to the new
> stuff...........
Thats something I dont EVER do, and I think it is terrible when people
do that. As far as I'm concerned, if someone is going to audition
components in a local store, then they should buy them there. If they
dont intend to purchase locally, then dont bother going in. I would
gladly pay a higher price to buy locally from a knowledgable dealer.
But, unfortunatly, there are none where I live. (Abq, NM)
Ty Chamberlain
DiscoVision - THE WORLD ON A SILVER PLATTER!!
Ster...@aol.com
StereoBoy is a Registered Trademark of Patrick T.Chamberlain
H. Les Holt
As an attorney and audiophile, I need to clarify a point.
A number of writers in this thread stated that high end prices are
high because the manufacturers and retailers agree to keep them that
way.
If this is happening, it is a direct violation of the United States
antitrust laws. It is known as price fixing, and is "per se" illegal
(meaning that there can be no business justification for this practice
that makes it supportable).
Not only would such a practice violate the civil laws, exposing the
perpetrators to triple damages, but it also violates the criminal
laws, leading to possible prison sentences and fines.
I think it would be helpful to keep this legal perspective in
mind.
Jim Sharp
Steve
This is not just a problem in the audio business. I have also found it
to be true with computers/communications equipment. Is there a trend
here?
Our rule is - The customer who pays the least, wants the most...
JIm Sharp
Thx1901
I like highend stereo equipment it sounds better than mass market
equipment if you agree suport your local dealer don't nickel and dime
them to death 10 or 20 % discounts don't make up for long term service
and friendships that can pay off in more ways than you think. I have
spent to many years in retail owning my own stores and running other
peoples stores although I have made good money I have also lost
hundreds of thousands of dollars because of people who will only buy
on sale. You want to know how I made my money back simple mark it up 4
times sell it at 50 % off. think it doesn't work compare mrsp's of
the same items in adds from audio advisor sixth ave etc. support live
music and your local dealer cheers
Len Moskowitz
Daniel Baker <ba...@cvrc.med.upenn.edu> wrote:
>This is why I strongly advise against mail order. Mail order is
>diametrically opposed to the high end ethos -- you can't really
>audition equipment properly (even with 30 day money back guarantees),
>and rarely is there an ongoing relationship between dealer and
>customer.
Then perhaps you might also advise against magazine reviews of high
end equipment. If I've been reading an author's reviews and learn to
trust his opinions, I often feel that I'm safe ordering a piece of
equipment, high end or not, via mail order, unseen and unheard. So
far, I've never been disappointed.
--
Len Moskowitz
Core Sound WWW site: http://www.panix.com/~moskowit
mosk...@panix.com
Steve Raineri
Jeff Bernhard wrote:
> I'm mystified: Why should the dealer give you such a deal, if it
> doesn't help his bottom line?
>
> item, there other items he might otherwise order that have to wait.
> There is additional effort on his part, time and energy, used to
> ensure the item arrives on time in good condition, and if this doesn't
> occur, to track the shipment and perhaps return a damaged item and
> request a replacement. This doesn't seem like much: What do such
> efforts 'cost'? What did the dealer 'pay'? Well, salaries and the
> like, among other things. Now, why should you benefit from all this
> and not give some compensation in the process? Why should you expect
> this and not add to his bottom line? He's running a *business*. The
[ quoted text deleted -- rgd ]
Hi Jeff
I guess you don't understand. There are LOTS of people who think
that others should work for free!! Now they want to get paid for their
work, but don't think that others should be able to make a living.
People don't realize that 85% of small businesses fold within a couple
of years of their inception. Now I'm not saying that people shouldn't
try to get the best price, but to all those people who are challenging
the prices. What if YOUR boss said: "I'd like you to work for half your
normal pay this month because I can get someone cheaper to do your
work."
Steve
KCdgw
In article <4o4in7$o...@biosun.harvard.edu>, Evan Champion
<ev...@synapse.net> writes:
>It all comes down to service. You tip a bartender well for mixing a
>good drink, your barber for a great hair cut, and I don't think
>markups on equipment are any different.
I couldn't agree more. The Audio Shoppe in Santa Monica (when it was
in business) under both owners, Gary Crichton and Bill Malloy, was
more than just a Linn dealer. Gary and Bill educated me when my
research was lacking, shared some wonderful hours just hanging out and
listening to music, and counseled me when it was time to upgrade.
Their advice and friendship was worth any markup, and I gladly paid
their price for the gear.
For high-end audio, no discount can offset the benefits of a good
dealer, IMHO.
Cheers,
KC
Those who know the truth are not equal to those who love it - Confucius.
Rick Becker
In article <4od3ta$f...@tolstoy.lerc.nasa.gov> Steve Raineri
<steve....@brite.com> writes:
> What if YOUR boss said: "I'd like you to work for half your
>normal pay this month because I can get someone cheaper to do your
>work."
This happens to a degree when wages fail to keep up with inflation.
Or, in the expreme degree when a company re-locates to a more
profitable environment, eg. moving to a more tax-friendly state, or
moving production to foreign countries.
As an audiophile, I try and keep the focus on the music and the
quality of the sound. Buying used equipment, buying hot products
before impending price increases, and using Canare GS-6 cable for
interconnects and speaker cable are some of the strategies I use. The
most expensive mistake one can make is to confuse one's ego with one's
stereo equipment.
Rick Becker
Rochester, NY
Daniel Baker
thx...@aol.com (Thx1901) wrote:
>suport your local dealer don't nickel and dime
>them to death 10 or 20 % discounts don't make up for long term service
I have found, after dealing with a couple dozen dealers for various
things, that a selling price of 10% below MSRP is pretty much
standard. There are exceptions -- I've been told, "MSRP is the price.
Pay it or go elsewhere." I have also found, however, that dealers who do
the standard 10% off are often *more* helpful than the MSRP-or-nothing
dealers, and it is more likely I will be able to develop a mutually
beneficial relationship with them. They're willing to go out of their
way to give me a good price, and I'm am then willing to go out of my way
to return to them for future purchases.
This isn't "nickle and diming them to death." They're still making a
nice profit. And as I said, 10% below MSRP is common enough that it
appears to be a standard practice. I *wouldn't* want them to shortchange
themselves, undermine the manufacturer, or devalue the equipment by
charging well below MSRP. I explained the importance of thriving
dealerships in my original post. I also wouldn't want some place with
shoddy advice and service selling for 25% off and putting out of business
a class outfit that does the standard 10%.
However, Steve Zipser did recently make the comment, "The less a customer
pays, apparently, the more he wants." (or something close to that.) And
Zip has enough experience in high end retailing to know what the business
is like. I honestly don't think, however, that 10% below MSRP is
unreasonable.
--Daniel Baker
Daniel Baker
mosk...@panix.com (Len Moskowitz) wrote:
>Then perhaps you might also advise against magazine reviews of high
>end equipment. If I've been reading an author's reviews and learn to
>trust his opinions, I often feel that I'm safe ordering a piece of
>equipment, high end or not, via mail order, unseen and unheard. So
>far, I've never been disappointed.
Reviews definitely have their value. However, one can not blindly follow
advice merely because it appears in print. Reviews are very useful as a
guide through the sea of high end audio equipment, system matching,
making a short-list of equipment to audition, etc. But no review can
completely take the place of one's own perceptions, and should not be the
sole basis of a buying decision.
There are situations, though, where one can get to know a reviewer over
time through his writings, and learn to trust (or disagree with) that
reviewer's opinions. For example, though I still wouldn't buy a piece
based entirely on a review, I have found that Robert Deutsch's findings
usually closely match my own. So I understand what you mean in trusting
some reviews over others, and being reasonably certain of satisfaction
with a purchase just from a particular review. Personally, though, I
feel much more comfortable listening for myself and using reviews only as
a loose guide.
--Daniel Baker
David deForrest
So, knowing as we all do, that there IS a conspiracy directed
precisely to those ends, why has the situation remained more or less
as described for 20+ years I've been involved in audio?
David deForrest
buyb...@buybeach.com
(Miami Beach, FL)
phone: 305-866-5401
Len Moskowitz
Daniel Baker <ba...@cvrc.med.upenn.edu> wrote:
>Reviews definitely have their value. However, one can not blindly follow
>advice merely because it appears in print. Reviews are very useful as a
>guide through the sea of high end audio equipment, system matching,
>making a short-list of equipment to audition, etc. But no review can
>completely take the place of one's own perceptions, and should not be the
>sole basis of a buying decision.
Agreed. The review can be the basis of buying via mail order with a
return provision. Then you audition the equipment in your home with
your system for the cost of shipping and return it if you don't like
it.
Between reliable reviewers and reliable mail order dealers, the local
dealer can disappear for all I care. In general, they are a
superfluous link in the distribution chain.
> Personally, though, I feel much more comfortable listening for myself
> and using reviews only as a loose guide.
Exactly! And mail order lets you do that in your own home instead of
a dealer's tweaked showroom.
Bob Myers
David deForrest (buyb...@buybeach.com) wrote:
> So, knowing as we all do, that there IS a conspiracy directed
> precisely to those ends, why has the situation remained more or less
> as described for 20+ years I've been involved in audio?
What conspiracy? What most of the audio consumers griping about the
prices fail to understand is that this is how a free market WORKS,
kids. The materials cost in a product (such as the usual "a CD only
has a few cents' worth of plastic in it) has practically NOTHING to do
with the selling price. Even the complete cost of manufacturing the
item, paying the designers, etc., isn't really what sets the PRICE,
nor will it ever. The price is set, purely and simply, by what the
market (that's you and me) is willing to pay for an item. The COST
simply is part of determining whether or not you can make a profit on
the sales at that price.
How much is an ounce of diamonds "worth" right now? How much would
they be worth if I invent a machine that can make them out of plain
old charcoal, and a few cents' worth of electricity? Now, how much
would they be worth if there were only one such machine, and for some
reason it can only make a few carats of diamond a month?
Bob Myers KC0EW Hewlett-Packard Co. |Opinions expressed here are not
Workstations Systems Div.|those of my employer or any other
my...@fc.hp.com Fort Collins, Colorado |sentient life-form on this planet.
Chris Kantack
Daniel Baker (ba...@cvrc.med.upenn.edu) wrote:
...snipped lengthy article on high end dealer insights....
: Hopefully some of these thoughts are interesting and useful. Sorry
: about the length -- "I didn't have time to make it shorter." Happy
: trails,
: --Daniel Baker
Dan,
Great article. (It wasn't too long.) Thanks for the insight.
I often take a pretty cynical view of the high end. But I'll
be the first to admit that some high end dealers are real "gems"
when it comes to treating the customer well.
Keep in mind though, that high end shops are not as common as
your local "7-Eleven". Many people (those living far from a
very large city), live hundreds of miles from the nearest
"high end" dealer. If they want to shop high end, they practically
have to go the mail order route.
Your comments about customers having to have repeat exposure to
appreciate high end sound is also well taken. It is essential
that high end dealers treat the customer in a way that is far above
the standard taken by a typical retail outlet. Also, the dealer
should not assume that someone wearing a T-shirt and blue jeans
is any less of a potential customer then another person wearing
a three piece suit.
Chris Kantack
Alan Chandross
In article <4on7tj$e...@agate.berkeley.edu>, mosk...@panix.com (Len Moskowitz) writes:
> Between reliable reviewers and reliable mail order dealers, the local
> dealer can disappear for all I care. In general, they are a
> superfluous link in the distribution chain.
>
> > Personally, though, I feel much more comfortable listening for myself
> > and using reviews only as a loose guide.
>
> Exactly! And mail order lets you do that in your own home instead of
> a dealer's tweaked showroom.
While I have no problem with the idea of buying by mail, I do think
that the local dealer fulfulls a valuable function. Despite the fact
that the showroom has been "tweaked", it does allow you to sit down
and, at one time, hear a variety of products in a surrounding
calibrated to give each one of them a fair chance. I suppose one could
buy several pairs of speakers by mail and then keep one, returning the
rest, but then you're paying potentially high shipping costs, plus a
great deal of hassle. Even my die-hard never-buy-retail-in-a-shop
friends admit that there's value to be had by listening first in a
dealer's showroom prior to buying the same item at 20% off by mail
(personally, I detest this practice, but that's a moral judgement that
each person needs to make for him/herself). Without local dealers, it
would be difficult to hear multiple different components, and nearly
impossible to play around with different sets of components when
you're shopping for a first system or a wholesale upgrade involving
multiple components. I, for one, am glad to pay that 20% when it
allows me to hear a product I wouldn't have considered otherwise,
because it hadn't been reviewed and/or isn't available readily through
the mail (that's how I bought my Linn Intek, and I'm still happy I
did).
Alan
Raymond Hoff II
I completely agree. Plus, I might add that my local dealer will allow
me to return ANY product and try a different model (plus or minus the
difference in cost) until I'm COMPLETELY satisfied with a purchase.
Ray
Peter J. Ullman
Raymond Hoff II wrote:
What does he do with the then "used" product?
Thx1901
My old dealer ( american sound in toronto a blatant plug for angie)
offered six months to trade in or trade up anything purchased with the
full value going to the next purchase. the returned merchandise was
sold as used equipment.
The cost benefit relationship with trade up deals like this is simple
not every-one uses the trade in policy but every-one feels more
confudent in making thier purchase resulting in higher sales etc.
I just don't know
Steve Zipser (Sunshine Stereo)
Actually, this is neither new or unique. We have offered a one year
upgrade policy since our inception. I know other fine dealers who also
practice this policy. We also feel it is necessary to offer policies
like this to give the consumer an increased level of comfort. Does
shoppers advantage, or 6th Av cathouse offer policiies like that?
Steve Zipser
LETS GO PANTHERS!!! (please?)