I have been told that dealers, on most hi-end products, pay 60-65% of list plus shipping -- that would mean your speakers cost a dealer $1200-1300 plus shipping from the factory to his location. Another way to judge cost is to investigate the dealer demo sales on Audiogon. Looking at 18 speaker dealer demo sales today, the wt.avg selling price was 57% of list(plus shipping), with the "cost" ranging from an incredible 35% to 88% of list.
A friend of mine sells several high end products out of his house and he has told me that all of the manufacturers strongly advise him not to sell their products for more than a 10-15% discount.
However, as you know, the discount available is more a case of the popularity of the item than anything else -- if you want a product that the manufacturer can't give away, you'll get a great discount from a dealer. Since Revel speakers have all gotten good "press", I'm assuming you won't do better than your 15% discount offer of $1695.
a good dealer should give you 20% or more discount from list price.
I used to work in the audio retail business, and for reputable, legitimate, high-end brands you can usually get 10% off retail without much problem. This is the amount the high-end manufacturers often allow dealers to discount without the dealer jeopardizing his ability to keep the line. Genuine high-end manufacturers have a vested interest in maintaining the value of their products, which is why you generally don't find the better brands sold on the internet or at steep discounts. Sometimes you can find some really good B-stock(i.e. very minor cabinet imperfections) deals from the dealer or manufacturer and save quite a bit more.
Basically, if you get 10% off you know you at least got a good price unless the manufacturer is blowing them out or offering special discounts. Best of luck.
Retail price maintenance is illegal in Canada. Do the manufacturers care? Probably have the same type laws on the books in the US, but since dog eat dog, betcha no one cares that the manufacturers get away with all kinds of shenanigans. When did honesty and integrety die out anyway?
Since prices bear no resemblance to anything sane in the high-end, the retailers are more than happy to ask the consumer the crazy prices quoted by the manufacturers, so long as they are not stuck with inventory on hand. C'est la vie...
How much do you discount your services, goods, or wages?
Fishinfool, using demo prices isn't always a good gauge as some manufacturers sell units to the dealer at a reduced price as a demo piece, requiring them to keep it on display a set amount of time before selling the demo unit.
Good service is worth paying for, not that I enjoy paying retail but if it was either good service and support vs. once its sold they don't want to see me until I buy something again-it depends what you care about- remember its only dirty paper. Call several dealers and see how they treat you and what suggestions they have-its not like you are talking mega money here; if one dealer seems obviously better for a few hundred bucks I wouldn't hesitate. of course YMMV
I agree with Tim. I have been very happy with one dealer I've been using, and I'm willing to pay more to go through them. They treat me well and let me borrow equipment. If it weren't for them I wouldn't be able to listen to any of my speakers before purchasing them. Sure the internet is nice, but it's nice to know exactly what you are buying when you are buying. They need to pay for the electricity to let us play with all their cool toys. I know this is a little off the subject and talked about quite a bit, but I really believe that you shouldn't "screw the dealer" by using his stuff to demo and then buying somewhere else for cheaper.
I once bought a used pair of NHT 3.3's. The paperwork I received with the speakers included the original sales receipt. It showed a "special accomodation" price of dealer cost to the original purchaser of $860 per speaker. If you take $860 x 2 = $1720. Then take $1720/.4 = $4300, which is the list price. Therefore, this means that the list price is 2.5 times the dealer cost ($1720 x 2.5 = $4300). This is the only case where I have actual numbers, but one could assume that this is typical of the high end industry where people are buying luxury goods. Just thought I would throw this out for thought or comment.
Jeff_s- Good point to bring up but with out dealers there would be no audiogon because there would be no gear around :) Of course this isn't like groceries that everyone needs how many in your home town are into hi-fi? its a niche market and you gotta pay for it; hey look at least its not crack! But obviously the 1 meter interconnect(pair) I bought for $1100 wasn't worth that much(not materials or no matter how you look at it) but I like it, and it gives me that much joy. Look at Jewelers, clothing stores, tire shops :o) they all take advantage of the consumer because they have to in order to make money(well maybe not the last one but you get the idea ;) )
Revel is a Madrigal product line. Cost on all Madrigal gear to the dealer is 45 points, with an additional 5 points for early pay/prepay. So the dealer pays either 50% or 55% of list for the item.
If you don't get at least 25% off, walk. Any Madrigal dealer that truly wants your business will do it. Trust me. Of course, that doesn't mean the average Madrigal customer won't pay more--in fact, they usually do. Profitable line.
hard goods like electronics typically cost dealers -40 -special deals they have
speakers will have a deeper discount
and cartridges and tonearms more again
I don't know where Findoc came up with his numbers for Madrigal, I do believe they are VERY inaccurate! I suspect a typical case of taking a shot at Madrigal; the price you pay for being a leader.
I know for a fact that REL uses a 30 point system. In other words the dealer pays 70% of the retail price. About six months ago there was a special discount from Sumiko that didn't require the dealer to pass it on to the consumer. I don't know how much that discount was for but based on my purchase price I would say it was about another 5-10 points. I got my info from the head salesman at Tweeter after getting into a fight with them and Sumiko (long story). I wound up buying my REL from Audiogon and received a lot more of the discount too.
I have owned my own audio/video business and am still good friends with a high end dealer
most electronics lines dealer pays 55% to %65 (of course their are exceptions but this is the meat of it all) of retail (list) plus shipping...most companies will sweeten the pot for earlier pay and pay shipping on orders over a certain amount.
Speakers are usually a couple of points better for the dealer and almost all cable is at least 50% off with special deals on top of that.
Most companies offer special deals on “demo” equipment to encourage the dealer to show product in the store. Cable usually gives the best discounts (75% off is common). On electronics, sometimes the “demo” stock is B grade stuff with a cosmetic flaw.
However there are lines, like Rel talked about above, whose margins are razor thin so it is tough to get much of a discount. Even used, Rel keeps its value because the manufacturer is very protective. (Plus their gear is really well thought of)
Most of a dealers willingness to discount has to do with how strict the manufacture is. Some make the dealer sign restrictive contracts that threaten pulling the line for the slightest transgression. Some of these companies mean what they say and others are more talk than anything and will take a sale any way the dealer can get it. The best known lines are pretty protective. You can see this because very little of it is found for sale "new" on Audiogon. The more restrictive the less likely you will find them on audiogon; because one of the big movements for restriction is web selling. You can see how this could mess up the dealer network that these people have worked so hard to build and protect.
Do an experiment; put in Levinson, Revel, Wilson, Rel, and Triangle and you tell me who are the picky ones. If you are a dealer for Levinson and screw with the manufacturer they will hear about it and drop you faster than a hot spud. They don't need the dealer, they have people waiting in line for their "franchise" and they aren't going to let someone muck it up. And in this case the dealer would lose all of the Madrigal stuff to boot (because you never just cherry pick the line, it is all or nothing).
If you are looking at Revel and a local dealer is offering 15% NEW, you should be thankful. We have a dealer here in town (not my buddy) who carries Levinson, Wilson, Revel, Proceed, Rotel, Rel, Sonus Faber and B&W. Beautiful store but forget the whole discount thing. They have a big “clearance” sale once a year and then you can count on 10% to 15% on demo items. By the way, demo means “real used” not “nearly new” like some would lead you to believe. But that is a different discussion.
Someone mentioned earlier that your dealer can be a great friend and partner in your hobby and if they are good with customer service, one of the hallmarks of this hobby, then fighting for a couple more % off doesn’t make sense. Have them deliver them to your door and enjoy the whole buying brand new experience…and enjoy a great speaker line.
Electronics typically 25/35 off list to dealers
Speakers 50% off.Why do you think they allways tell you they are the most important piece in the chain.Vested interest.
10% of new gear is pretty fair.Otherwise your dealers wont be in bizz.
At 20 % off list there is to little left to cover expenses.
Demo gear should be minimum 20% or walk.
I paid three thousand, for a brand new four thousand rel stentor 2, at two different stores so I think the mark up is a little more then stated above.
That said I think the extensive mark up is necessary for them to stay in business. Running a business is very expensive and the costs of the product is far from the only costs. Employees, rent, utilities, evn things like workmens comp insurance and liabilty insurance all gets very expensive.
Perfectimage, if you paid 75% of the cost the dealer still got to keep 5% which is $200. The dealers may also have bought the subs during the Sumiko discount (I know my Tweeter bought more than half their stock then) which based on my estimates is another $200 to $400. Assuming what I think is best case scenario the dealer made $600. Doesn't sound like they lost out at all then. This is of course all conjecture. leo.
A local salesperson buddy of mine routinely gives me 30% off list, sometimes more, never less.
I've been told on what I consider good authority (though I have no proof) that my Mezzo Utopias that list for 14.9K sell to the dealer for just a bit under 7K.
A dealer in a nearby town, trying to make it in a marginal market, marks down Paradigm speakers about 20% but Gallo speakers almost 30%; Sonic Frontiers and Anthem electronics only about 10%.
Confusing, isn't it?
So many variables, it's impossible to say. Assuming brand new stock on a product that is brand new in the market from a very established manufacturer (all of which apply to the Revel M20's), I'd think 15% is a very nice discount. Let times get a little tough (as they certainly have been lately) and go looking for a brand new product that has been on the market for a while, and I'd think the discounts might be higher if you're willing to negotiate. I have to imagine that hi-end manufacturers have factories to keep running and have to have mechanisms between them and their dealers that allow them to make things more "attractive" to their ultimate customers. Supply and demand is unavoidable. -Kirk
Could it be speakers have a higher retail mark up because they take up much more space relative to their value compared to electronics?