Do Dealers think it is sinful..........

Sorry Cornfedboy, I respectfully disagree with you. If you read my prior thread in this post, I used to work for a dealer during college. Granted, it may have been a while ago but I don't think things have changed too much. When I worked in the HiFi shop, most margins were 20% maximum. You are absolutely right about the accessories though, 60% or so margin on those. Think of it, a dealer makes $7000 on a $10,000 amp? If that were true, we are both in the wrong business. The dealer I used to work for, gave accessory credits for cables etc. usually about 10% of the purchase price to make up for not getting a discount. The customers seemed to like it because they would not have to shell out another $1000 for those high end speaker cables after purchasing that $10,000 amp.

I think the mark up is quite a bit especially on accesories and speakers. What you have to take into consideration is the cost of a business. Small high end dealers have a small customer base and dont move a lot of equipment like circuit city. They have to cover there overhead. Employees, rent, elctricity, and dont forget putting up all that money to have equipment for you to listen to when you come in.

As a person who worked as a dealer, I have to put my two cents in. Markups ARE high. Higher than you would expect. Speakers are 100%. The lowest margin product we carried($99 Sony throwaway mass market garbage CD player - dealer cost $84) had an 18% markup. Most electronics went for 35 to 60% profit. And we would give great discounts, provided you asked. Example: PSB Gold i speakers, retail $2499. I have seen the owner several times go all the way down to $1300 on the pair on the floor, and $1500 for a pair he would order. His philosophy, "Hey, I just made $300 for writing a sales slip, and making a phone call. Less than 5 minutes work." And don't spend so much time letting your heart bleed for dealers. If you heard the stuff I heard about customers from so many dealers, you wouldn't have so much sympathy for them.

Everybody needs to do the math in the same direction or we'll disagree forever - If a pair of speakers retails for $4000 and costs the dealer $2000, that's 100% markup but a 50% margin. I don't think anyone believes there are many $10,000 amps that cost the dealer only $3000, which would be a 233% markup and 70% margin. There is an interesting article in the Stereophile archives (tho it is several years old) regarding the business of being an audio dealer and the rough numbers I remember from it were that dealers worked on roughly a 40% margin (70% markup) and tried to keep their costs to 35% of sales, meaning that they cleared about a 5% profit.

Two thoughts: one -- even if the markup is high, some of that still has to go into cost of doing business. With high end equipment, there can be a lot of breaks between sales.
OTOH, high end gear has different criteria for "doing what it advertises" than consumer-grade gear. I can't tell you how many times I've heard the advice, "what works for me in my system may not work for you in your system -- audition!" I need to be able to burn in a piece of gear and then have some dedicated listening time before I know whether or not I want to keep something. Only a local dealer can provide that service, and if he won't provide that service, then he's providing a disservice.