Do Dealers think it is sinful..........
hello rosebud, this is avnut. i posted a thread on audiogon about dealers and discounts. you mentioned to another poster,3chihuahuas, that he could give you a "want list" if he was prepared to pony up the cash asap. i wondered if you could extend that invitation to me? i am in the market but wont buy until after i return from ces in vegas. the brands i am looking into are classe,mbl,and dodson, transparent and cardas. please let me know. thanks again. harold |
3chihuahuas: Send me your "want list" and I'll see if I can get you a discount. I can absolutely assure you that, should any of your goodies be available where I shop, you'll get way more than 6% off. In fact, the 6% you get from your "salesman" is pathetic, even embarassing. It wouldn't even cover sales tax where I live. BTW, I am not an audio dealer. If you email me your "wants," you should be able to afford to buy with credit card or cash immediately. Otherwise, please don't bother. [email protected]. |
AVNUT,i no longer surport any of my dealer,s in my area,the lack of honesty and misinformation that seems to fill the showroom floors of these so called hi-end experts is becoming a standard format for selling this expensive equipment,I purchase all my equipment on the used market and the 40 to 60% that i save not buying from a dealer, I'll use in the future for my kids college expense,PERIOD. |
What do you guys think about forming our own network to protest against dealers pricing fixing? I say we have a big enough to know some one (or know some one who knows some one ...and etc.) that can get hifi products at discounts. We would simply extend this discounts to our elite members who are all binded by a common mission statement: To promote hifi products while spending as little as possible. Sounds good to you guys? I am not say it's can be easily done, but can you imagine if this idea takes off? I am not in this audio hobby to make a buck and I am sure some of you feel the same way. Let me know what you think? Here's a teaser..one of my good gal pal designs cables for a cable company just right outside of San Francisco. Her company is contracted by Cardas to produce cables for them. Get the hint guys? |
Enough with the talking and show me the discount. Those who have cited they were able to receive discounts please list names of your sales man/woman and the store which offered it to you. I am possitive these dealers won't mind since it's more potential business for them, especially, since they are earning less margin (from the price breaks)and they can make it up in the volume they'll potentially be getting from us. Let me be the first. Josh as San Francisco Stereos (Mountain View Location) will be able to get you 6% across the board just like what he did for me. I know it's not much, but it's not bad considering how all the other hi end dealers around here have us by the balls with their "MSRP" bullshit. Cheers |
I don't understand why you think Kendall43 is lying. I don't live in New York but in the western part of the U.S.A. I have been able to find virtually any new high end audio product in which I've expressed an interest offered for 25% off retail. I do know that one of the retailers with whom I deal most often has a lot of customers on the East Coast. Perhaps I now understand why this is so. |
[email protected]: My point exactly... MSRP stands for Manufacturer's SUGGESTED Retail Price. It certainly is not illegal to use MSRP, but to force a dealer to charge that amount and not allow them to discount is illegal. |
John_l: Gary at Audio Gallery is THE BIGGEST jerk I have ever met. He is a complete loser with no idea of what it means to appreciate a customer that walks in the door. In this "high end" audio business, there are so few of us to begin with, that to continually treat potential customers with the lack of respect as Gary does, is a disservice to the consumer and the manufacturer. I would rather listen to Bose than to give my business to Audio Gallery On the other hand, the "used store" you mentioned, is probably Echo Hifi. They are terrific people with a true understanding of the business. Not only are they passionate about audio, they also treat their customers as friends. They will always have a loyal customer base. Cornfedboy: I think you are incorrect of your assessment of "discounting". I believe it is illegal to "price fix". It is done to force the consumer to deal with the local dealer regardless of how the dealer treats the consumer. Many manufacturers will also pull their product from a dealer if they sell outside of their territory. This too is illegal. If you can cite case law, I am willing to listen. |
Yes, but why are price breaks so hard to get? It seems to me that one consensus of this thread is that if you invest the time in your dealer he will eventually give you a break. I think the opposite, if you keep paying full price why would they suddenly give you a breaK? p.s. in my own shopping, I go to the same dealers and rarely do they appear symphatic to price breaks, even after many purchases. Maybe that's just the area I live in? |
Kendall43, sorry to shake your tree but I don't believe you either. I live in NYC where there are many, many Hi-end dealers and have yet to find one that discounts 25% across the board. Oh, and lose the attitude, we are all adults here and there is no need to call each other names. We can disagree more maturely than that. |
Awdeeofyle: look, jerk, I can read retail price sheets, just as you could if you tried, Well, maybe not. I routinely receive 25% discounts on highend speakers, electronics and acessories (sometimes more on the last). These are new, in-the box, never-opened products. They are not once-a-year demo units. Those are discounted more deeply. Sorry you live in the boondocks or are, perhaps, too reticent or stupid to ask whether discounts might be available. Fact is: YOU DON'T KNOW WHAT YOU'RE TALKIN' ABOUT. |
Kendall43 What makes you believe that you are getting 25% off? Does the dealer show you his invoices, his mark up, and then give you 25% off? ...If so, is this guy a family member and what is his name? I’m sure we’d all like to get 25% off for nuthin! Please consider that if you really are getting 25% off across the board you are probably seeing this discount off of a higher sticker price than the market standard(s). As stated previously in this thread 25% off on cables or tweaks isn't unrealistic, but 25% discounts across the board would seem very unusual if not unbelievable. There is at least one exception to this, and that's dealer demos. Dealers often get demo units at 25-35% below cost, but this usually only happens once a year, and is limited to one unit per model per product line. These products can definitely be discounted – even below what would normally be “cost” in some cases. Unfortunately there are some folks on this site who believe that once a product sells for a low-ball amount that THIS is the benchmark. Demo & or refurbished product also need to be considered when discounted prices are bandied about. |
What about the MFG price protection? It always seems like when ever I ask for a discount, the dealers would give a MFG price proctection lecture....and how they can't give any discounts because the MFG would pull the plugs on them? Isn't this against the law? ...a.k.a price fixing? Then again..isn't true that some MFG price the products for branding status? Non-audiophilers may simply associate a more expensive piece of equipment to a better performer and vice versa. This is a normal practice in the automotive industry. I can even recall a case study about Marantz I read back in a marketing class during my college days. I can't remember exactly when, but there was a time when Marantz tried to lower its price hoping to capture market shares, but ended up lossing sales because consumers started associating the brand as a cheap product. It took Marantz many years, if not more, to get the brand back to "hi end" level in public's mind. |
[email protected] & Nostroke@ces,.org: you guys are really lame using those fake email names. besides, you give yourselves away by using your paragraph indents. finally, you have to be nearly as stupid as your posts not to realize you can be "pingged" so we can trace your domain address, etc. if we wish. if i were an audio dealer, i wouldn't let either of you in my shop, let alone offer you discounts. our motto: "no shirt, no shoes, no brains, no service." come outta the closet guys. if you want any respect, don't put on fake beards and glasses. i, for one, know who you are. happy holidaze, JERKS! |
Gents, there are very good dealers and very bad dealers. Some treat their customers like gold and some treat their customers like dirt. It is a shame when a few bad dealers tarnish the public's view of all dealers. I still think that if a dealer services you properly and takes a consultitive role in your purchase it is not ethical to threaten him with taking your business elsewhere if a sizeable discount is not offered. |
Hey Nostroke. So sorry. Do you work for the CES ? The waltz part really hurt. I was referring to an entire system for 5K. My Vandersteen price came from a local used high end dealer who has been in audio for 20 years or so. I'm a good customer to them. This topic addresses the purchasing ethics of high end audio and the inquisitive nature of audiophiles as related to the internet and the hardship of running a high end audio dealership. I theorize that most dealers are audiophiles and that ironically their most frustrating customers are probably just like them. The internet has affected high end audio forever. Customers are less captive. As a correlating point I state my own purchasing choices and patterns. Good dealers do provide experience and value for their services and deserve to be paid for this. Absolutely. I made a conscious choice to not use retail dealers and do my own legwork. Completely fair. I state my own bad experience to illustrate the abrupt motivation. I gather almost all of my information from magazines, forums, friends and actual ownership. The internet has made this possible. It's more interesting too. This particular dealer was unprofessional and did not deserve my business. If that speaker was my choice, I would have purchased it new from him. Without a doubt. Customers are right sometimes too. |
Got news for you. There aren't many people who waltz into a hifi shop and drop 5K on a set of speakers. Many dealers go out of their way to demonstrate and educate prospective customers with the hope that they will grace them with a sale. If an "audiophile" demands a discount from a dealer, the dealer is likely to blow him off. Dealers are savvy to the behavior of the typical "audiophile stroker" and don't go out of their way to accommodate them. The dealer knows that after he has demoed the product and invested time answering questions, the stroker is just go buy it somewhere else for 2% less $. FYI: Vandersteen's have a markup of 35%. That isn't much after you consider the cost of shipping, capital outlay to stock them, etc. |
#1 sounds like our local Portland, Oregon Vandersteen dealer. Are you listening Richard V. ? My bad experience with this dealer when I was a serious 'new' buyer of Vandersteen 3a Signatures made me decide I would just buy/try on the internet. I am much happy with this choice because I now know about high end audio from experience. The money I lose buying used/selling used pales by comparison to what I would have lost in initial depreciation. I do call a few dealers when I am in the market for something specific and ask them if they have something used or on special. One interesting side effect of this is that I buy my audio supplies online too. Tubes, record cleaners, etc. I have to pay the shipping on the stuff, and it does sell for retail on the net which means I am actually spending MORE for it. I don't even know where the other retail dealers in Portland are located. ------------------------------------- I do think Notreally is being a little hard on dealers in general. It must be very frustrating to deal with 'true' audiophiles, so you must cut them some slack. On the topic of markup, I know that the Vandersteen 3aSignature sells for 2100 to the dealer who then sells it for 3500. Remember these audio dealers probably have 200K+ in capital sitting in their building plus the monthly lease and all. A function of this markup is the ongoing cost to sell ratio. There aren't too many businesses that are so capital intensive with such a tenous sell position. ----------------------- I wonder if the internet is helping or hurting dealers. It hurts them in that they don't have the 'captive' market they used to. A person can demo in their showrooms then search the whole country for that product. Their in-showroom used market profit is diminished as well. It helps them in that it removes many of the 'true' audiophiles from their showrooms. I have a feeling they make their real money from non-audiophiles. People who walk in and say "I've got 5K to spend, set me up". |
Don't get me started! If you are lucky there are 3 high end dealers within reasonable driving area. And probably #1 is a dealer of the very high end (Wilson, Levinson) who is an arrogant, know-it-all, snooty upper crust jerk who says that everything sounds different but there is no need for a loaner piece for you to try out in your home or room. His stuff is so good it will sound the same at your place and don't bug him for discounts and there is a 20% "restocking" fee if you don't like the sound and bring something back, and by the way that thing you picked out is ok but not that great so come back when you want to spend some real money, oh and also by the way your taste in music sucks (you don't like classical) so why don't you go out and get some cerwin-vega speakers and receiver. Probably, #2 is a mid-to-high end dealer (adcom or NAD to CJ) and is ok to deal with, IF and only IF you buy some stuff and make him some money, then after you are ripped off the 1st time he will feel that it is now ok to treat you decently. Probably, #3 is a variation on #1 or #2. Thus, one or 2 lously dealers significantly limit your ability to get high end gear, since the third one probably doesn't have everything you want. I lived in 3 big cities, and found this to be the case. This is why I think internet shopping w/ a 30 day home trial is a great option (i.e. Magnepan (actually 60 days), PS Audio), rather than waste your time with some idiot with bad hearing who probably knows less than you and who provides no added value. I for one do not have the time to suck up and be buddy-buddy with one of these guys just so I can get a good deal in 3 months when I need something else and hope the guy is still there to remember me, and I don't think it reasonable for the high end to expect me to do so. I also don't have time to sit around in a strange room with different equipment listening with strangers all day, and don't believe this reasonable either. I get my initial impression, take the thing home and try it out, if I like I keep, if not then not. To me this is reasonable. Less than 1/2 hour in the store wasting everyones time. I would prefer to get something over the internet or mail order with a good return policy just so I don't have to deal with dealers. Certainly there must be others like me who think the whole hi-end purchasing process is completely screwed up? I think what it comes down to is you must accept the fact that you can't buy what you really want. If you are down to 3 awesome preamps in the same price range you buy the one you get a deal on (saving $1000), not the one you like the most, which is a little better, but not so much better that you are willing to lose your dignity on the price. For you dealers out there- I am not really that bitter, I just think most dealers are lousy this fact is not made better by pointing out that some dealers are good, probably those who read the info on this site. - thanks for letting me participate in this discussion. |
I thought that was what I posted? Anyway, IMHO, I think it is unreasonable to expect a High End dealer to discount 15% or 20%. After all, they need to make enough money to stay in business. For those who have owned a business, all of the expenses incurred in the running of the business are all too familiar. The dealers who maintain a decent inventory especially get hosed because they pay tax on it the same as if it was profit resulting from sales. |
kthomas is right. we all need to use the same math. to clarify my prior post: (1) the lion's share of highend harware (speakers, amps, etc.) is sold on a "40 point" margin to dealers, i.e., if the "retail" on an amp is $10,000, the "dealer cost" is $6000 + freight; (2) much of the wire/accessory stuff is "50 or 60 point" product, i.e., if the msrp is $1000, the "dealer cost" is $500-600 + freight. it does cost a lot for a dealer to inventory product, particulary since competant one's use at least some of the inventory for auditioning. the auditioning/demo equipment usually can't be sold as "new" and thus provides a lower margin to the dealer. all of this, and more, must be factored into the "discount calculus." |
Two thoughts: one -- even if the markup is high, some of that still has to go into cost of doing business. With high end equipment, there can be a lot of breaks between sales. OTOH, high end gear has different criteria for "doing what it advertises" than consumer-grade gear. I can't tell you how many times I've heard the advice, "what works for me in my system may not work for you in your system -- audition!" I need to be able to burn in a piece of gear and then have some dedicated listening time before I know whether or not I want to keep something. Only a local dealer can provide that service, and if he won't provide that service, then he's providing a disservice. |
Everybody needs to do the math in the same direction or we'll disagree forever - If a pair of speakers retails for $4000 and costs the dealer $2000, that's 100% markup but a 50% margin. I don't think anyone believes there are many $10,000 amps that cost the dealer only $3000, which would be a 233% markup and 70% margin. There is an interesting article in the Stereophile archives (tho it is several years old) regarding the business of being an audio dealer and the rough numbers I remember from it were that dealers worked on roughly a 40% margin (70% markup) and tried to keep their costs to 35% of sales, meaning that they cleared about a 5% profit. |
As a person who worked as a dealer, I have to put my two cents in. Markups ARE high. Higher than you would expect. Speakers are 100%. The lowest margin product we carried($99 Sony throwaway mass market garbage CD player - dealer cost $84) had an 18% markup. Most electronics went for 35 to 60% profit. And we would give great discounts, provided you asked. Example: PSB Gold i speakers, retail $2499. I have seen the owner several times go all the way down to $1300 on the pair on the floor, and $1500 for a pair he would order. His philosophy, "Hey, I just made $300 for writing a sales slip, and making a phone call. Less than 5 minutes work." And don't spend so much time letting your heart bleed for dealers. If you heard the stuff I heard about customers from so many dealers, you wouldn't have so much sympathy for them. |
I think the mark up is quite a bit especially on accesories and speakers. What you have to take into consideration is the cost of a business. Small high end dealers have a small customer base and dont move a lot of equipment like circuit city. They have to cover there overhead. Employees, rent, elctricity, and dont forget putting up all that money to have equipment for you to listen to when you come in. |
Sorry Cornfedboy, I respectfully disagree with you. If you read my prior thread in this post, I used to work for a dealer during college. Granted, it may have been a while ago but I don't think things have changed too much. When I worked in the HiFi shop, most margins were 20% maximum. You are absolutely right about the accessories though, 60% or so margin on those. Think of it, a dealer makes $7000 on a $10,000 amp? If that were true, we are both in the wrong business. The dealer I used to work for, gave accessory credits for cables etc. usually about 10% of the purchase price to make up for not getting a discount. The customers seemed to like it because they would not have to shell out another $1000 for those high end speaker cables after purchasing that $10,000 amp. |
Avnut: You said that you agree 75%, but I would say that I agree with your last post 100%. I hope you get the good service you deserve. Cornfedboy: Are you buying your Audio equipment in the former Soviet Union? …If not, why are you paying 40-70% margin? Do you know the difference between markup and margin? If your numbers were correct dealers would be marking up goods 67% to roughly 234% - that’s a huge range. How many dealers would you say charge 2&1/3 times their costs? I’d suggest that 67% would be the high end of the spectrum (except for cables, IC’s and PC’s). You must be thinking of markup or manufacture margin. I would suggest that the only products with high margins are cables & tweaks. With regard to your question: Have I ever bought Hi end gear? Does your sarcasm imply that one must spend “X” dollars or have owned brand “X” to have a perspective? Maybe you’d feel better if I listed all of my equipment & how much I paid for each piece? You could evaluate my purchases and inform me if I’d spent enough or own equipment prestigious enough for you to respect my opinion. To give you a baseline I wasn’t talking about 100k+ systems. …More like the equivalent of Stereophile A and or B rated gear. ...I think we all are aware that as price rises margin falls, even on 20-30K systems. I’m not against discounts. If you are like me, and buy new toys to upgrade your system every month chances are you get a significant discount already. I merely take issue with folks who seem to believe they should get a discount for no other reason than that they have a pulse. I’ve got nothing against buying and selling used items online, however I see a lot of what I believe to be gray-market sleazing going on, and THAT does bother me. Dealers and manufacturers that whore their goods devalue all of our “investments”. The only thing that should cause rapid depreciation is significant technological advances or wear. But despite the lack of technological breakthrough and very low wear to gear we still see average 40-50% deprecation. |
Avnut- I would second (or is it third?)Jef and Mfgrep. If we use the dealers as an audition source and then buy from net its totally unfair to them. On the other hand, I also agree with everyone who says avoid that dealer like the plague. He is not providing you with any value, which is the reason for buying from a bricks and mortars outfit. Best of luck. Hope you get the amps want and the service you deserve. |
Avnut....if your dealer will not offer you a discount on something that they don't have in stock and won't let you take home for demo...then get rid of your dealer. They are depriving you of two of the three things that they are able to give you (the third being advice). I have a dealer like that as well....I will not purchase from him.....he has nothing to offer me. |
If you "listen to equipment at your local dealer...then go to audiogon to purchase" then you are doing a great disservice to your local dealer. They should slam the door in your face and spit at you. On the other hand....If you are willing to purchase used gear without having demo'd...Audiogon is GREAT! I will not demo at a local dealer and buy elsewhere...it is sacreligeous. If the dealer does not have what I want in stock for me to hear....they had better offer me a heavy discount for the quick sale (all they have to do is order it for $A, recv. it, and resell it for $B) It is worth money to have the ability to demo prior to purchase. |
I buy and sell lots of stuff on the 'net. Like a warehouse store, the 'net offers good prices but virtually no service. I will NOT audition gear at a local retailer (or take it home for an audition) then look for a deal elsewhere, that's simply not an ethical way to do business and ultimately the dealer will end up finding another way to support his family. The dealer's time and inventory costs him money, if he invests in me then I in turn ought to be willing to do the same. I will research current pricing to use as a benchmark for negotiating a fair price, then lay down my hard earned cash. I hate being jerked around and do my best not to waste other people's time. If I want a "deal" I buy off the 'net, if I want value I buy from my local dealer. Jeff |
awdeeofylle: what planet did you drop in from? have you ever bought highend gear? fact is, the margin is from 40-70%. thus, the great majority of highend gear has plenty of space for discounts. products like cables and wire, which is frequently marked up 60-70%, has even more room for "deals." sure you're not a shill for mit? andy singer? i quite agree that dealers who offer service should be rewarded; that's why i rarely buy used gear myself. but this ain't pork bellies and euros. we're not in this hobby to make a killin'. you wanna leverage your audio $$, then buy a bunch of krell on margin and try to figure how long it will remain current stock. come on, admit it, you're sluggo come to the surface again, at last. welcome back, o iconiclast! |
to awdeeofyle: thank you for your response. 75% of your response i agree with. please understand my buying process. the sequence is as follows:discover product, research product, locate reviews if available, find dealer IF SERIOUS. my goal is to build the finest playback system i can afford. i am looking for good product and good value. mcintosh products fit this bill. their products HOLD THEIR VALUE and the dealers buyback product as old as 30 years old. other good brands are fine also . i am considering others as well. but try to trade up other brands with the same dealer, its not often the case that he can give you even 50% of retail even a year later. OUCH!! All i ask, is that the retailer be reasonable enough give the CLIENT a break. personally, i dont mind the dealer making money, its business. but reatil prices w/ no service, no display for the unit i want, no in home demo, and only an in store credit if i dont like it to me is rediculous. i would never treat my potential clients for life this way. |
Avnut: I think you're already ahead of the game by not buying from that local dealer. What a fool! I'd love to be doing so well (in my line of work) that I could simply let 27k walk out the door. You should contact Classe. See if they don’t have a local sales rep. If there is the rep may even arrange an audition for you – the do work on commission after all. I'd be very surprised if Classe just let you go, especially if you mention all of the responses on this forum. Cheers! |
After reading this thread I couldn’t believe the ignorance, short sightedness and general whining by those of you who expect automatic discounts. Correct me if I am wrong, but it looks to me like you are saying: a) Dealers should provide a discount regardless of your patronage b) Dealers don’t really need to stock the gear – we don’t want to pay for this service, we can buy gear without listening to it – via reviews & product availability on the internet c) Price is more important than good sound & good service Do you like being able to go visit a local dealer and listen to the gear he stocks? Do you want your local dealer to stay in business? Do you want your gear to hold the majority of its value? Do you want to continue to have the opportunity to buy innovative products from smaller companies who are only able to produce limited quantities? Well, if any of the answers are yes, you’d best reexamine your conclusions. …Keep focusing on meaningless discounts and your choices will become even more limited than they currently are. Do any of you have a clue of what the average margin is in “high-end” audio retail? Do any of you know what the margins are on “expensive” low volume/high end stuff or are you simply speaking out of ignorance? I know I’m stating the obvious here, but these aren’t commodities we’re buying and selling folks… no pork bellies, timber, oil or computers. We’re talking about spending hundreds, and in many cases thousands of dollars on luxury items. As audiophiles/audio enthusiasts we believe that there are differences in sound and in most cases we are willing to pay in order to acquire these differences. When you buy from a dealer you should be getting something for your money – experience, help, insight, and someone who will take care of you and any problems, needs or warranty issues you might run into. If you don’t value these, then good luck to you. If your dealer doesn’t offer these benefits to you then go somewhere else – why are you still giving him your business? If your local dealer isn’t giving you adequate service contact his supplier(s) – they should certainly care! …If they don’t care be glad that you found out, sell any gear of theirs that you own and buy from reputable people. Any product is only as good as the people in the company behind it. In-home auditioning Listening to new components at home before you buy is only reasonable and logical. Home auditions should be an obligatory courtesy afforded prospective customers. If a manufacturer or dealer doesn’t allow and encourage in-home auditions they must surely expect the customer to make an uneducated purchase. Theoretically, this would undermine the entire existence of their businesses. The very products they sell/manufacture evidence the simple truth they believe that NO TWO audio products/experiences are identical. How many of you (Audigon members) would you buy a car without being able to test drive the model on REAL roads? It seems to me that listening to any component or system in a dealer’s showroom is analogous to a virtual test drive. Sorry for the digression :-) It seems to me that this site’s intent is to bring audio enthusiasts together in a forum that allows us to become aware of new products, communicate our experiences and YES to sell and get deal’s on gear. But isn’t the real idea to help maximize audio enjoyment? I too like a good deal, and I don’t believe in paying for services that I do not or cannot get. But I believe that to focus SO much on price is unhealthy for our hobby. I hope that your enjoyment isn’t sullied by the fact that you couldn’t get a couple percent off of the gear you bought. Happy holidays all! |
