More and more consumers are recognizing the benefits of easy ordering on the internet and in-home evaluation. For high-end audio products in particular, it makes a lot of sense.
I run a cycling e-commerce business and also a large brick&mortar bike shop. I can tell you that the e-commerce business is significantly more efficient. With increasing building lease costs and payroll costs, it's harder and harder to make any profit in the B&M business.
PSA has been migrating toward a direct-to-consumer model for a while. Their trade-in policy is brilliant in my opinion. They are already giving up more margin selling through dealers than they are giving up by taking trade-ins (at full original MSRP I might add) since they limit the value of the products you can trade in. Any revenue sharing they get with The Music Room is gravy.
By selling direct, they can provide benefits such as a generous trade-in policy and returns policy which is a lot more difficult if you are sharing half your profits with someone else. I'd much rather do an in-home audition in my own system of an audio product than listen to at a dealer. Granted, better dealers will let you take a product home (if they have a demo unit), but I think this is not always the case, and many customers don't have a local dealer anyway.
It's pretty tough to start out with a direct to consumer model although some have been able to pull it off successfully (look at Schiit and Tekton), but now PSA has an excellent reputation and I think they will do quite well.
I bought my Power Plant 3 from their website because I got a great trade-in on my 20 year old Monster HTPS 7000. But even with this trade-in, I'm sure PSA made more profit than if I had bought it at a dealer.
I run a cycling e-commerce business and also a large brick&mortar bike shop. I can tell you that the e-commerce business is significantly more efficient. With increasing building lease costs and payroll costs, it's harder and harder to make any profit in the B&M business.
PSA has been migrating toward a direct-to-consumer model for a while. Their trade-in policy is brilliant in my opinion. They are already giving up more margin selling through dealers than they are giving up by taking trade-ins (at full original MSRP I might add) since they limit the value of the products you can trade in. Any revenue sharing they get with The Music Room is gravy.
By selling direct, they can provide benefits such as a generous trade-in policy and returns policy which is a lot more difficult if you are sharing half your profits with someone else. I'd much rather do an in-home audition in my own system of an audio product than listen to at a dealer. Granted, better dealers will let you take a product home (if they have a demo unit), but I think this is not always the case, and many customers don't have a local dealer anyway.
It's pretty tough to start out with a direct to consumer model although some have been able to pull it off successfully (look at Schiit and Tekton), but now PSA has an excellent reputation and I think they will do quite well.
I bought my Power Plant 3 from their website because I got a great trade-in on my 20 year old Monster HTPS 7000. But even with this trade-in, I'm sure PSA made more profit than if I had bought it at a dealer.