Electronic Retailer's, Going By?

good article in the wsj today on subejct. http://online.wsj.com/article/SB10000872396390444772804577621581739401906.html?KEYWORDS=electronic+retailers

Much of the journal applies to the brick and mortar audio retailer specialist. If the big guys are having trouble, small shops are under dead threat from the online crowd.

What do you think?

Dear Bunconero,

There is another alternative, stores such as mine,

watch for the Dagogo article about Audio Doctor coming soon.

Audio Doctor is an uber home based dealer, with four sound rooms and about $1 million dollars worth of display inventory.

We have over sixty lines of gear on display and create systems from $1,000.00 to $250,000.00, we also do state of the art custom installations and represent many different kinds of home entertainment systems from high end two channel, home theater, distributed home audio and automation and high performance lifestyle systems.

We have a simple model: fill a store full of interesting and exciting products, cater to a broad audience, and have a very low overhead, I live upstairs in my shop, therefore only one mortgage, one set of utilities bills, one internet and TV bill etc.

Pity most store owners that have to duplicate every cost, they have all of their personal expenses as well as the business, for all of these reasons it is imperative that stores make money in order for them to survive, and be able to reinvest in exciting display products, that prospective clients actually want to hear.

I have been a proponent of micro retailing for years. I have an very wide selection of state of the art equipment from the best brands in approx 2,000 square feet of display space.

If you look at the failing Best Buy model they have gigantic stores 20,000 or more square feet, with a tremendous amount of wasted floor space and walls of very low profit flat panels, not to mention poor uneducated sales people, poor demo rooms, and a confusing product mix, and zero appreciation in the art of the up-sale as well as too many areas of extremely low profit items.

Lets look at a possible scenario Lawyer or Doctor with a small firm, his or her computer, fax, camera breaks and they need to pick one up, they go to the local Best Buy and instead of being in an electronics wonderland, they grab what they need and walk out.

Now what if that same person was greeted by a friendly greeter who escorted them to the department they needed and then helped them to decide what the customer wanted to purchase, and then told them about "our new music department, or some exciting home theater product and then if there was some interest, the new client gets to experience the wonder of quality home entertainment perhaps for the first time? Perhaps that person might actually be so impressed by hearing real music reproduction that they want to purchase a high quality sound system.

If you look at the Best Buy store model it is a world of failure, compare that to Ikea. In a Best Buy you go through the doors and you have a central corridor which branches off to the individual departments. So rarely do consumer get a taste of something new that they weren't shopping for. They get in, go to the department they want, pick the product, and leave.

Ikea presents a beautiful store where you have to walk through entire departments before you can get to the specific department you want to get to. This exposes the potential buyer to other ideas and other products then the one they were only interested in in the first place, then all of a sudden it is more than purchasing a new desk but maybe next trip a new couch or rug or whatever.

The audiophile lives in their respective bubble what is killing our industry as well as Best Buy is the lack of knowledge and exposure to our ideals.

There are many people who can afford to buy a good stereo but live in the world of Bose ignorance or suffer from the misunderstanding that "I can't hear the difference" or "better equipment is too expensive or too complicated."

We have lost a generation of young people to the concept of headphones and computer being a music system this hasn't helped either.
Audiooracle, I hope you succeed. Your business model suggests it is driven more by passion for audio rather then profit and loss. Finding, and keeping, sales people who are motivated like your self may never be possible. Carrying a million dollars worth of display inventory plus stock inventory, unless self financed, suggests doom. I did floor financing for many brick and mortar audio stores many years ago and for most of the owners it did not lead to any profit, given the discounts the market required. I made money, they did not. Think about it, in a real sense your display inventory cost to carry is at least $100K per year unless you do a 100% inventory turn every 30 days and can finance all inventory through manufacturers terms. Remember, Amazon's profit in many cases comes from the payable float of not paying vendors for three months after an item sells. I do wish you success as I love to visit stores like yours, especially to hear speakers, and 'kick the tires', but not buy which I do on line or direct from the distributor.
I will only buy from my local shop. Once he's gone what else is there? Who's going to leave my $5000 amplifier on my door step? I know I can purchase what ever I want for less money but audio is one area that I'm willing to pay more. I buy everything but groceries and gear online. I pray to the gods that I don't some day have to stay home from work for the tractor trailer to arrive with the speakers ive never heard.
Don't worry, the Apple stores will fill the gap. What kind of freak are you, not wanting to listen to downloads thru your Apple headphones/buds? No need to even buy music, iTunes will have a real time download of every recorded title in the universe. Oh, the monthly sub fee is only $109.99 per month. Why clutter up your life with anything else. When you die, all your music will die with you. Rumor has it that Apple will soon be in the concert business, leaving no profit for anyone else. I hear that they have just signed 'Pussy Riot' to a long term exclusive contract, with a concert tour planned for their release from jail. You never know.
buying on-line with return privilege (in-home audition) seems to me the viable future for the audio business.

it lets you hear a component in your stereo system.

if a dealer will lend equipment why bother to listen to it at the dealer. you can't tell whether you will like the component in your stereo system.

To Bunecoro,

I have almost zero stock products, the money is tied up into display inventory only. When we make a sale we order a product.
Good point Mrtennis. I just love going to my dealers place to be surrounded by amazing gear. My local guy owns the business and its just him and his wife. No high pressure sales. Sometimes we go for a cocktail or have dinner. I will only buy from him because I like the lines he carries and he can pretty much get me anything he doesn't. As a result I get stuff like cables at his cost. I saved $300 on my speaker cables alone. He will let me borrow gear if my stuff is in the shop so I'm not without tunes. It's just nice. I feel lucky.

Dear Mr. Tennis, you are missing the point of what a dealer does, a dealer is more than just a lending library, a good dealer will guide the user to picking the right components and accessories that will make their system come alive.

When you work with a good dealer most likely that dealer will become your working partner and can help guide you to create the sound you are hoping to create.

When you do the go it alone route it is just you without the benefit of professional assistance, now I am not saying that over the years that I haven't met some talented and well informed end users, but in most cases I have been able to make huge improvements in peoples systems often without changing a single component.

It is very rare that an end user can match a professionals level of experience.
Audiofreakgeek.....in my experience most dealers can only get it right with gear they sell but if you are interested in something outside what they sell then it's a crap shoot at best. Dealers want to sell what they carry and to many will tell you once you go looking outside what they sell that's it's just no good! Retailers are just another car dealer IMHO.
I would imagine a very large percentage of the higher end gear is sold through a brick and mortar audio dealer. This might change very quickly but I hope it doesn't. My dealer is amazing and he actually saved me from advice given to me on this web site. I'm not saying there's not good information on this forum but every single opinion differs and most people on here just love to give their opinion. I think a dealer can make it a lot easier for someone to make choices, especially if they're just getting into audio. Where you go from there is fine but its the place to start. I know a lot of people with very expensive rigs who have never heard of Audiogon. They're a dying breed but they still have many years to go. We have a McIntosh dealer conveniently located by the largest University hospital within hundreds of miles and the place is packed every day. There's so much Mac gear in this town it would make your head spin. Why? Because its what their fathers had. My local dealer is just like Audioracle. If I want it he orders it. I would never expect anything more.