Why can you buy a car at dealer Invoice but audio


Equipment you have to pay retail and if the dealers in a decent mood he might give you 10-15% off.
taters

Showing 3 responses by jjrenman

Mostly has to do with volume. High end audio retailers and manufacturers have to cover there expenses with a much smaller number of sales thus they need to make more profit per item sold to stay in business. Just think how much more expensive an I pad would have to be if their market was a few thousand pieces a year instead of the tens of millions per year that they do sell!
In the beginning there were many small Mom and Pop hi-fi shops around the country. Usually staffed with a mature, knowledgeable and passionate people but alas the prices were sky high. Next came the specialty retailers such as the Circuit City/Good Guy's types where prices were more discounted but the staff was younger, and less experienced (read lower wages). Lastly, you have the big box chain that discounts heavily. Do not have much staff to help you and is currently in a makeover to be profitable again because they can not sell enough service plans or overpriced cables to make up for selling the TV at cost.
I've been in the business 30+ years and Jea48 pretty much has it nailed. There would be a shop on every other corner if selling high end audio was as profitable as some of you think it is. Just not enough volume for a local shop to sell at a lesser profit margin.

BTW although most of the comments made about how car dealers make there money is true but you can not compare there high volume/commodity car business model to any type of specialty retailer. Again the difference is in volume. Just like the cell phone business the profit is not in the phone (as you know they pretty much sell them below cost or give them away) it is in having tens of millions of phones with all those airtime minutes. Or computer printers which manufacturers sell below there cost but make it all back and lots more in the the ink. Do you see audio shops with large service centers running full time (labor is very profitable)? Or selling you some monthly subscription so that your new amp will have it's magical sound quality renewed every thirty days?...So when a car dealer sells at or near cost it's because he wants to get your trade in to sell it at a healthy profit, and supply service for both which is very profitable.