Does anyone or does everyone pay retail price?

As to the orig Q...

I've paid for new stuff and for used stuff... but I don't think I've paid the list price exactly in any case.

Dealers have ther overhead as Stan said... and every dealer will make or be forced to choose if they let a qualified buyer 'walk' out on them, given the parameters specific to the deal.

There used to be price protection with some lines, geography or regional protection as well. Both of these plans were to protect dealers and provide good profit margins.

Much of this ideology was overseen and enforced on ADV items.... posted pricing.

What happens behind closed doors is a whole other world. Just don't expect the bottom to fall out of the list price, when you go to close a deal in a BM retail outlet with brand new pieces. Then we're back to the relationship, item, overall $$$ being spent, cash, credit, trade, previous business, close out, demo, support, service, etc.

I'd say a 20% discount on new gear is an average to good deal in a flat out, 'see ya later' transaction. So more off would be better of course.

There are too, those dealers that simply won't move off list, begrudgingly (if at all) allow auditions, etc. and let folks walk out on them all day long. I neither waste my time there, or their's and seek out those which are more customer friendly and accomodating. It confounds me how they stay in business.

In fact I'd pay more to those who are attendant to my own needs, than to a jerk selling the same thing for another 10 to 15% off... but that's just me and my ways. I think people matter and are more than just another 'faceless deal'.

My exp in retail showed me looking to genuinely attend to a customer’s needs and providing them a fair deal was sufficient to obtain their return and gain referrals. Nailing someone for at or above retail list price does get ya a couple things… Namely, a one time deal, and most likely a remorseful buyer that can be detrimental to your business reputation., via the best or worst advertising, ‘word of mouth’. Good news travels fast, bad news goes faster.

I think a big problem for many is the level of their expectations following some good experiences in buying preowned gear, here or elsewhere. One can get used to buying quality made components preowned and be pretty happy doing so…. Discounting the items that come with buying new.

There are however some exceptionally positive attributes going with ‘new’ gear. Notably, the prospect another may gain still greater savings buying that piece later on in the preowned market… perhaps.

Cyclonicman, the industry term is "points" of margin, which describes the percentage of MSRP that is profit to the dealer. That is to say, if the a product retails for $1000 at 40 points, dealer cost is $600 . . . because 40 percentage "points" ($400) is the dealer's profit. Having said that . . .

Electronics are usually 40 points.
Freestanding/bookshelf passive speakers are usually 50 points.
In-wall speakers usually start at 50 points for the lower-priced, increasing to about 75 points at the top of the line.
TVs and video electronics are usually 20-30 points.
Pre-made cables are usually 50-60 points. Bulk installation wire is usually more.
Racks and furniture are usually 50 points.
Phono cartridges from major cartridge manufacturers used to be obscene, like 75 points or more . . . but this isn't as much the case anymore. Cartridges from electronics manufacturers (i.e. Linn, B&O) were usually more like 40 points.

You may be thinking, wow, that's a lot of profit!! But there are many things that can erode the margin, such as . . .
Freight costs - most manufacturers charge freight unless the order is a substantial number of pieces. For any defective returns, the dealer generally has to pay the freight.
Credit card fees & chargebacks - putting something on an Amex card can take 4% of margin away from the dealer. Also, the "buyer's protection" plans that many card companies have simply debit the merchant in the case of fraud, with virtually no recourse.
Display inventory - once a product comes out of the box, it's instantly worth less money.
Backstock - the worst kind of non-performing asset.

I can definately feel it both ways - on one hand, running a hi-fi store is NOT something people generally get rich from, so it's not intrinsicly high-profit. But on the other hand, so many dealers have no idea how to actually earn their margin . . . the only way they can add value is to leave money on the table. Which in a long-term sense, won't keep them alive.

Agree with Stanwal. The margins in the industry when mid to high end audio was in demand when people had lots of disposable moeny to spend kept them going.

However, even then, most retailers were moving to 'custom installations' where they can charge $100/man hr to install a system and the money is being made there...not on the components per se. Within this economy, more retailers ae moving in this direction to survive and are now carrying lesser priced components that revove around a home theater set-up.

Carrying high end 2 channel audio and selling for 20 point margin will put a retailer out of business in short order. The margin is too low and many people come look, listen then buy used or where they can get another 5% off. So don't be surpirsed if your dealer doesn't have the stock they used to; they can't afford the carrying costs or have the inventory sit there and if they sell it for a 20% discount, they get in trouble with the OEM and can't make enough to stay in business.

Some audio components are only 30 points and some high end cable OEMs are only 45-50 points. But most HT customers just don't care on the cables and run the cheapest thing they can to het it all hooked up and ae willing to pay $100/man hr for the installation which can really add up to serious money.

The worst of all OEMs are those that protect territories and prices among individual dealers but then have a special program for internet sellers that often do cut prices. I won't name names.

Standard mark-up in the industry is 40-50%. There's lots of overhead in 'bricks and mortor' stores and audiophiles are very cautious with there purchases. A lot of people have gone into the retail side because they love being a part of the high-end scene. Business failure rate is incredibly high. It's hard to believe that anyone would pay retail these days, unless it's for a lower price tweek of some kind. I suppose that some established dealers will survive the recession, but sadly most will find this to be the 'last straw'. Inventory 'fire sale' will probably then be made available on a site such as AudioGon.

Kirkus, thanks for addressing my questions!