I bought some Avantgarde speakers years ago directly from Europe. There was an Audiogon seller who could get them and he had great feedback. I saved 4000 from what my friend who dealt them was able to get them for. They were like 1/2 price from US retail. The way it seems to me is there is a US distributor who has to make a cut and then the dealers also so maybe they are able to go directly from Dynaudio in Denmark to the Euro dealers. Wouldn't it be great if the Euro dollar was weak like it used to be? You could save even more. They are going to be shipped to the US one way or another seems safer to right to you than to the dealer then to you.
One, they are made in Europe.
Two, Europeans are well aware that the audiopile market in the USA is composed largely of suckers.
Keep in mind that aside from strength of the dollar and the costs associated with importing large speakers, the people in Europe will pay a pretty steep VAT which is significantly higher then sales tax in the States.
Shipping and taxes. Look at how much magicos and Wilson's cost on Europe.
Would one even bother giving their go-to dealer an opportunity to match the price, or is that just moot?
There's no simple answer to your question other than its a large item to ship and its a fragile item to ship. That costs tons of money. Each item is insured by the manufacturer.
It's not like a tooth brush made in China where you can dump tons of them into a container on a ship. These speakers are flown in and carefully handled. Can you imagine how few Dynaudio speakers are sold each day in the U.S. alone?
Dealers don't keep them in stock or at least mine doesn't. Who can afford to? So what happens? Does the distributor keep them in a warehouse or do they ship from the manufacturer? I can find out but I don't care.
Yes, the money savings could be substantial but I don't want to work around my local brick and mortar because he's my friend. You guys that are never happy (audiophiles) are the ones that have to worry about it. I'll keep gear for upwards of a decade and I have a nice store to work with. If I have an issue with my gear, I drive 10 miles and dump it off. It's not my problem.
I'd say because there's a middle man ie the distributor, instead of going from the factory direct to the dealer as the majority of audio products here in the US do. The distributor basically sets the price, and of course it's gonna be higher because he or she wants a big cut of the profits. Sorry if I stepped on any toes, but that's the way I see it.
Certainly a factor Dave, but would it be one if the chumps didn't pay him?
Years back I was interested in a phono cartridge made in the UK.a local dealer carried it, and I priced it locally and from a hifi shop in the UK that was more than happy to ship to the US. With insured shipping from the UK, the price was literally 1/2 of the local shop's price. While I understand there is value in keeping the local shop viable, the difference was just too staggering to ignore so I bought from the shop in the UK, and the cartridge came within a week. I know the local shop would have mounted the cartridge but I have installed many cartridges over the years this was not an issue.
I would say the big difference was due to the US importer. In the UK,
The shop bought direct from the manufacturer. a direct import eliminated one profit layer, which apparently was substantial. This may be a little harsh, but no ones giving me free money so I have no problem saving money as long as my doing so is neither criminal or unethical. And if anyone else feels different, stop buying stuff on Amazon.
I'm all for saving money. The problem is when you have a problem with the speaker and the U.S. distributor doesn't want to help you because it's a grey market product. Then where do you go? Dynaudio makes their own drivers. There is no where else to get them. A couple of years ago I blew a tweeter in an older Dynaudio speaker. My dealer called the distributor in Chicago and ordered it for me. He told me I should replace both tweeters so they would match. It took about 3 months but I finally got the tweeters.
Another thing is resale. I don't think most consumer want grey market products. A lot of people will call the manufacturer and make sure the product was destined for the states. They are also concerned about service and parts.
So off the bat you might save a couple of thousand but when you go to sell you are also going to get less for the product and it's going to be hard to sell.
Schubert wrote: 'Certainly a factor Dave, but would it be one if the chumps didn't pay him?'
Whats something worth? What you can get someone to pay.
One way to get easy money is to be the distributor for some high end bit of gear. You wont get it from the manufacturer because he has a distributor and says go to him. He may not even stock the bit of gear and simply gets it in as required and pockets the money. Anything goes wrong - he ships it back to the maker.
As a distributor he should be earning the commission etc by marketing it and providing after sales service. If he does that then that's what you are paying for - and it can be quite substantial. If not then its money for jam. You as a consumer must decide for yourself if you want to pay that for it. Even if he is doing what a distributor should be doing you must decide do I want to pay that for it.
I don't know what margin Dynaudio distributors get but I do know from some reliable sources for Magico the cost is 9 times the parts used. I hear when a new speaker was released in Singapore a Champagne and Caviar breakfast was held to celebrate it - and it was not cheap stuff - it was Bollinger. Guess who pays for that - you the consumer. Only you can decide if that's what you want to buy into - personally it makes me barf and I simply wont have anything to do with products like that - but that's just me. Obviously Magico is still in business so there are plenty of people happy with that sort of thing - or, possibly a lot more likely, don't realize whats really going on.
Schubert: Pay who, the dist.? No, it wouldn't, because simply, no middle man to take a cut.
Zavato: I know what you mean. That is exactly right and exactly my point as well. And no nothing illegal with doing that at all. The tricky part is with electronics and different voltages from say, Japan and Europe however. Some companies have a switch right on the back, but many require that you rewire the damn thing. It's not the hardest job in the world, but if you know what you're doing, no problem. If not, kaboom. Yes, there are transformers, but those are said to degrade the sound. Some disagree with this however.
I suppose you could take it to an independent tech and have him or her rewire it, but if they don't know what they're doing and or don't even do the job, forget it.
Never did a direct import of anything that needs to be plugged in. But other stuff- sure, and I've never bought into the scare tactics that some US distributors use. Other than a phono cartridge direct import, I did a tonearm and cables. All were entirely hassle free. And even after paying my local store for a new arm board and to mount the arm, I still was ahead over $700.
Bottom line to everyone- it's your money. spend it how you want.
I see. No, I don't buy into it either. That stuff is a safe bet. Exactly, it's a free market.
Taters: Yes, you have to be careful when buying, because it is better to keep the product than sell. I don't see why you couldn't get the parts direct from Dynaudio or the dist. over there, but maybe not.
It depends on the person when selling, some care, some don't. Obviously, when you paid less you can sell for less on the used market. When selling electronics of a different voltage, if you're tech savvy, no problem. If not, then yes there is a problem. However, there are some (emphasis on some) independent techs who can do a good job of fixing things. Provided they can get the parts, which might be difficult, then you're ok. All of this must be researched before buying.
Playing in the high end is always a risk when it comes to service and parts. And a risk in general...The parts usually are quite expensive unless under warranty. Then you have equipment matching and what have you which I can't stress enough. *If* it's truly excellent equipment, it won't need much service if at all, and only new parts 20-30 years down the road by which time will be out of warranty for most high end products.
That's basically my take.
Bill: Exactly right. You nailed each point perfectly. Great post. Allow me to add that the markups in many cases don't add up and or make sense. I know there are bills to be paid, salaries, R&D, and what have you, yes. But, the numbers still don't add up or justify the high price in as you said, the cost of whatever component is to make. I can't help but think there's some greed or a lot of greed involved. It's a human weakness, and has been going on for centuries. There are some "good guys" in audio though that price fairly and make a great product, however.
There are a number of posts here that seem based on incomplete understanding
of the difficulties involved in achieving long term longevity if you are specialty
manufacturer of goods with a limited market. If a manufacturer's parts cost to
retail ratio is 9, I don't see that as an indicator of obscene markups necessarily.
You also have to factor the cost of machinery involved in tooling the parts, the
cost of USA based skilled labor to construct a speaker as complicated as the
Magico line, real estate to house the manufacturing facility, etc. When you have
an informed view of the real costs of maintaining a specialty manufacturing
operation that can stay in business profitably for years, a 9 to 1 parts cost ratio
I've been interested in high end audio for forty years and I've seen many upstart
audio companies started with the idea of delivering exceptional value for money.
They start out as a small operation getting by with shoestring margins,
inadequate facilities, and insufficient labor. Word of mouth gets out about what a
great "value" they are and demand builds. Demand outpaces the
ability of the business to deliver products at the initial price point and then
prices have to rise or they go out of business because they can't manage the
transition long term, full fledged viability.
If you look at the long term survivors in this business like Conrad Johnson, Audio
Research, McIntosh, Pass Labs, Bryston, Luxman, Audio Note, etc., I bet they all
will have parts/retail ratios that are similar. Sure, they don't offer the same
seemingly great deals as that new guy building amps in his garage with no
workman's comp insurance, but they'll be here in ten years to take care of your
product (which is unlikely with the upstart "value" model.) I'm not an
apologist for greed, but if you believe in efficient markets, every manufacturer
that survives does so because they offer what some segment of the market
perceives as fair value.
Photon46: I already addressed this: "I know there are bills to be paid, salaries, R&D, and what have you, yes. But, the numbers still don't add up or justify the high price in as you said, the cost of whatever component is to make."
In my opinion, of course. I don't know the exact numbers not being in the internal bowels of these companies, but let's face it there's big big profits at hand here.
That's my take.
Some people do not want to pay what the manufacturer thinks his product is worth and they have found a way to do that. That's fine. But why the need to paint the manufacturers as undeserving or greedy?
With imported components, it has more to do with the middle men than the dealers and manufacturers, really...but the manufacturer sets the initial price, and the dealer can sell at whatever price he or she wants really. Anyway, I personally am not painting manufacturers any which way in particular, most of them are good people with good intentions; however, however, when you start deducting things with some products, what's left? Big profits, or big-ger profits, and let's be honest, the prices, the markup, on high end audio is more than ever. I'm not an economist or anything like that, but something's wrong with this picture, in my opinion. I'm not trying to be Ralph Nader Jr. here, but the consumer is not bring treated fairly, especially when you consider the resale value of most high end equipment. But, that's the way it is, and i am in no way trying to expose the industry, because after all, without the industry, what would we buy? We would have to DIY, of course, which many are doing as a matter of fact.
Of course no one's forcing anyone to buying high end audio, you can just go to best buy and buy a $100 receiver and $200 speakers, plus $50 blue ray player and be done until the units crap out. But when you want the best, it's never cheap, or gonna be cheap, but unfortunately, this shuts a lot of people out who want and appreciate this stuff.
Hi Dave 72
Personally I don't think it's greed or anything like that most of the time. In some cases like with distributors who simply sit there and rake off the cream - yes. But in most cases its simply what needs to be done to make a low volume expensive product. Not many are made, and you need people to spend time and money marketing them so they are known eg send them to magazines for review and buy into all that rot which I wont go into here. Then retailers need to stock them so you can hear them. It all adds HUGELY to the cost so you can actually make enough profit on the measly few you sell so you can stay in business. Then there are makers who don't buy into that model - its all by word of mouth and you hear them by going over to fellow enthusiasts places, not to dealers because they sell direct. It's MUCH MUCH cheaper that way but no one knows about them and you only occasionally see them discussed on forums like this.
Hi Phantom 46
The markups are not obscene - its just what you need to do with the usual model for selling a specialty product. If you do what Magico does marketing wise and selling via retailers its perfectly normal and no one is ripping anyone off or anything like that. Buying a product sold direct is much cheaper, but you wont find them in magazines like Sterophile or at your local Hi Fi store. That's what you are paying for. That's what makes me barf - the massive overhead you pay for the usual way of doing business and why I steer way clear of products like that. I think most people, if they understood the truth would as well - but most people don't.
And its very interesting to see peoples reaction when its pointed out. One guy on the forum I frequent in Australia always goes off the deep end whenever I mention it - you are ignoring being able to buy in bulk bla bla. The fact of the matter is speakers like the Magico and other really high end products are made in such minuscule quantities all these things you would think a big maker could save money on and pass on are non existent. Their major cost is marketing and retailer overheads.
No problem. Well, since you put it that way, I would agree. Perhaps I'm being too pessimistic here. The gloom and doom man, haha. I know very well, that this is a business, and making money is part and parcel of the whole thing. That is true (low volume) especially for the top of the line and near the top units. Thanks for your post, it allowed me to see things in a different light.
Dynaudio stopped caring about the customer when they became a large corporate company. Having used there roar drivers since their beginning I recommended them to many people over the years. Then one day when my home made sub-woofers surround started to rot I called them up to find out how to get it re coned. They told me that because it was not from a speaker system they made but was sold as a roar driver they will not repair it!. As for charging more for the same in the USA it's simply because they can.
Coloneltushfinger...why is mark levinson so much expensive in europe? I have same speaker that you want...its distributor retail is about 6600eu...with cash they give me discount to 5500eu...luckily i found honest dealer who got me a brand new pair for 4800eu...if anything happens i just contact distributor and they take care of it...i think its a fair price...but thats not it...same dealer is friend with franc kuzma who makes awesome turntables and becuz i bought my all system from that dealer he discounted me new kuzma reference mk2 tt with retail about 8500eu and 4point arm with retail 5200eu to a half price(thats what i call money performance ratio)...offer i couldnt refuse...i dont want to think what is retail for kuzma in USA...so i recommend you to find yourself a good dealer that will find you american equipment(or most of) that is good worth for money...cuz when i see lets say burmester gear prices in europe...and in america...you dont have to be smart to conclude they are ripping you off big time...
Well by far most audio gear is far cheaper in the US compared to Europe. Party due to the higher VAT. The VAT is 20% where I live.
Hmmm, on a more mundane note, do European Dynaudio speaker terminals accept banana plugs?
Focus 380's in Europe-6200 Euro
Exchange rate 1.35-1.38(depending on day) Euro to $1
Shipping, customs, etc. probably around $1500
Warranty valid only in country of sale-priceless!
There is nothing shady, no voodoo, it is what it is.
U.S price is $9500 per pair.
cuz when i see lets say burmester gear prices in europe...and in america...you dont have to be smart to conclude they are ripping you off big time...
Sad but true, unfortunately...
Well by far most audio gear is far cheaper in the US compared to Europe. Party due to the higher VAT. The VAT is 20% where I live.
Yeah, that VAT has gotta suck big time...