Why are dealers so scared to sell product out of

Thanks Zd. If your right about mark-up, which I would have guessed you are, I'm surprised that every dealer I spoke to about pricing my new speakers acted like he was cutting his throat with the absolute minimum price he could offer. One dealer told me that the margin on my new speakers is thin and there just wasn't that much he could do. If it was only one guy telling me this, I'd take it with a grain of salt. But for three dealers to come up with practically the same price discount causes me to raise an eyebrow. As I said, the dealer I usually work with doesn't even carry the speakers in inventory. He orders them from a factory warehouse and then flash transfers title as soon as they are delivered. Seems to me, that with so little risk, he would have more to work with in terms of dealing. OTOH, my speakers are a tad pricey for the general market. Maybe the dealer figures that my speakers are not a volume, typical supply and demand type item. Which may mean that the time to make his margin is when he makes a sale since the volume is thin. Just guessing.

ZD542, I assume you are referring to the manufacturer's markup and not the dealer's, right?

Bifwynne, I imagine the dealer probably buys the product from the manufacturer at a 30% discount. This leaves a 10% markup for the manufacturer. When the dealer sells the product to you at a 20% discount, he too is making a 10% markup. Shipping and insurance can be costly so unless the dealer passes this additional cost directly on to you, it can really eat in to his markup.

There's too much blind acceptance of financial complexities and monetary entitlement.

Agree completely.

Some companies have very profitable margins! Audio Note Japan (KONDO) for example sells their new Overture integrated at 3,200,000 Yen ($$38,800) and sells to the dealer for 898,000 Yen ($10,880). Although some dealers even mark the retail higher! Buyer beware.

(Dealer disclaimer)

Pgawan2b & Bifwynne,

I wasn't talking about manufacturer's markup, I was referring to what an actual audio store would be selling equipment for. Keep in mind, high end audio is not a high volume business. Even if a dealer drop shipps an item he dosen't have in stock, that dosen't mean there's no outlay on the the retailers part. I find that most people don't realize how much of a committment it takes for an audio retailer to get a dealership for a well known high end brand. You just don't call them up and fill out some paperwork. These people are serious. A bad dealer can destroy a company's reputation. Just to get your foot in the door, you will have to show things like: A store front (usually a very nice one), trade references (not just for credit but to show that you have other quality dealerships that will be used to support the brand you are looking to acquire, tax returns, insurance, delivery vehicle, employees, credit checks, the list goes on.

If you make it past all of that, then someone from the company gets on a plane and comes out to meet you and have a look at your store. That's the hardest part. You then have to sell them on why you would make a good dealer for their products. You'll have to prove to them that you have the knowlege and experiance it takes to sell and match equipment. Its not just about money. You can easily have a million+ dollars invested and still not be approved a dealership.

I can go into more detail about all of this, but right now I'm out of time. If there's anything I missed, post and I will try to answer as best I can. This is a very important topic that really needs to be addressed. I'm starting to see how important it is for dealers to show potential customers what goes into this from a business standpoint. The products can be very expensive a lot of people don't always see the value in them. If you're buying something expensive, you have every right to ask some questions. Better communication, I think, would benefit everyone.