I meant to write "went with my significant other"
- 45 posts total
- 45 posts total
yes, a dealer does not make a 40 % ptofit on electronics, or a 50 % profit on cables. as has been stated previously, there are fixed and variable costs to consider.
however, a dealer who runs an efficient business can maximize his profit.
let's go back to the car dealer analogy.
if a buyer offers a price that is too "low" but the dealer makes some profit, he is better off selling it unless he thinks he can get more for the car in a short period of time.
an audio dealer is better off making a smaller profit if he can do a volume business, otherwise his money is tied up in inventory, waiting for a customer to buy the product at a higher price.
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.
You won't buy a Ferrari, Porsche, Lamborghini automobile at dealer invoice, nor a BMW or Mercedes for that matter. The cars that sell for deep discounts are akin to the discounted electronics at Best Buy and Fry's. I don't expect big discounts on highend cars or electronics I like. Since I'm not rich, I buy mostly used.