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Retail Buying - Reality Check

Like all of you at some point in time, I caught the Audio and HT bug. I started out at the usual places - Hi Fi Buys, Best Buys, etc. and moved on to the niche, locally owned hi end audio and HT boutiques. There I met generally more knowledgeable salesmen (no women yet). I also started doing my homework out on the web and came upon great sites like Audiogon and AVS Forum to name a few.

Your knowledge and experience has been invaluable to me. Unfettered by the product lines you have to sell, you provide a far more level playing field of unbiased opinion.

Here's my dilemma: I am a small business owner myself, and I value local market presence and customer relations. I'm even willing to pay a small premium for this intangible. However, when the quotes came back from 3 different retailers in Atlanta ($65 -80k), they were all for MSRP plus tax plus design install and misc. such as clips and straps ($250-$500 worth!)

Now most of the hi end equipment today has "burn in" periods of several to hundreds of hours before peak operating performance is obtained. So, buying new at full MSRP also meant getting inferior performance for the necessary burn times. So no big benefit (except some warranties) to buy new.

By purchasing from sellers on sites like Audiogon, and purchasing nearly new or sometimes new products, I have saved $16,000 plus $1,000 in sales taxes on approximately $50,000 of my quoted MSRP prices. I'm not done yet. I also have the flexibility of buying the exact product line I want, not just what my store has to offer. There is great pressure in the retail setting to go "one stop shopping" at your store of choice.

I understand these stores need to make a profit. However, 50% markups on items that they don't keep in stock and have to special order, seems out of line to me.

Caveat emptor is certainly a key consideration in on-line purchasing, but to date, through careful checking of prior seller transactions, prudent payment techniques and telephone conversations with the seller to allow me to make some kind of character call, I have had nothing but outstanding, as promised transactions.

I hired a HT acoustical designer and a certified installer and I couldn't be happier, except for one thing. I still feel a little guilty about not buying from the guy with the storefront who spent time with me. I just wish they'd recognize where they do and don't add value and charge accordingly.

Anyway thanks guys, for the great education and advice you've provided me.

What say you?
rogocop
wstritt
170 posts
 
It is a good question - what is the "right price" to buy retail. I am not a frequent buyer of equipment but have always been able to get 10-15% off MSRP. My sense is that many "more frequent" buyers that post on this site get better deals from retailers which troubles me to some extent (i.e. jealousy mostly that they can buy cheaper) but for the help I get and the convenience of local service, I generally don't mind.

But "MSRP plus" for what they don't have in stock, and particularly if you can't audition it, is obscene IMHO. Comparing new against used equipent on Agon, on the other hand, is somewhat unfair - there clearly should be some premium for new. However, when was the last time anyone paid list for a car, boat or any other big ticket item (other than, perhaps, real estate or other one of a kind items)?

While somewhat apples and oranges, I recently solicited quotes for a remodeling project. Bids came in all over the place. I talked to all of the bidders, including the high bidder. He said, among other things, that the other contracters were giving away services and that he had taken a course that said one should get paid for the value provided so he was sticking to his price. I was a bit taken aback - it always thought that the market set the price and "valued" the product - he obviously thought otherwise. If he can get it from others, more power to him, but I feel no need to overpay. Neither should you.
mrwigglewm
60 posts
 
If hi-end retailers are getting their margins squeezed from competition on the internet, it is because sophisticated consumers (who seldom ever paid MSRP) now have the means to communicate and sell their gear over the net with confidence. If manufacturers can no longer protect their authorized retailers because their products or competitive products are being heavily discounted on the net, they may have to reconsider their business modal. The oil companies did not go out of business when self serve stations replaced full serve (n/a to Oregon). However, hi-end retailers appear to be surviving from HT, unsophisticated buyers and audiophiles who for one reason or another prefer to buy from full service retailers.
The market for this stuff exists. Manufacturers and retailers have to keep their eye on the market and adapt. Scarcities in some items, like premium vacumn tubes, could occur despite strong demand. But, by and large, the market will provide as long as we remain passionate about our hobby.
ljgj
955 posts
 
You have just defined why the high end will and has been on a mission to kill itself. Competition is looked down upon and forbidden in general areas. We should be happy with them as retailers and not them with us as customers. Not all are like this but enough to bring us to sites as this. You will find those dealers willing to discount also saying to you not to reveal the discount because the manufacturer will pull the product from them or I cannot sell it to everyone for this amount.
inna
7,674 posts
 
Hi-End dealers don't really need us at present at all.Home Theater and custom installations-that's where money is.Even our $10000.00 amplifiers is nothing.There are so many people who can pay $20000.00 or $25000.00 for the TV set and $100000.00 and more for the dedicated rooms.Who are we to the dealers if all we want is to buy a $5000.00 component once every 5 years?If we buy more and more often then some of them may give us certain attention.Personally I think dealers know their business and we know ours;let's just not lecture each other.If the price is too high,turn around and walk away.As someone said here,it's a luxury hobby.If it was food the situation could become very interesting.Look forward for this to happen.
edesilva
768 posts
 
I'm with Inna--I visited my "local" stereo shop last weekend and the sales guy (who I made arrangements with in 5 minutes over the phone) kept me on ice for an hour while he closed a five figure HT installation.

That said, on the plus side, I had called them and offered them a reasonable deal in cash for a display unit, and they said OK without whining. I doubt I could have done much better on A'gon, plus I got to walk out of the store with it. It did take them another hour to pack it and find the bits, however.

On the bad side, I rarely find good advice inside audio stores--even boutiques. I'm in the DC area and have only found one store owner/operator who I think is a stand up guy (I heartily recommend the Listening Room in Baltimore). Notably, I've bought several items from him and he has coincidentally done what he can--without my prompting and in one case where I was desperate and fully expecting to pay 100% of retail--to cut me a good deal. There are four other boutiques I can think of in the area, as well as three local or regional chains. One boutique I won't go into--the owner is rude and unscrupulous. The other three offer product lines that are exceedingly limited, and I haven't had occasion to want anything they offer. The local/regional chains are useless because every time they have told me something, its been wrong.

So, I do try to buy local when I can from store owners I respect. Then again, I don't really waste any time of the store owners that don't respect me anyway.
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