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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
djohnson54
396 posts
 
The way I see it is that SOMEBODY is buying new stuff. If this weren't the case then there wouldn't be "slightly used" product entering the used marketplace. I don't think that those of use who buy from Audiogon are JUST recycling used pieces although that does happen to some extent. From a certain standpoint, those of us who are buying used are actually helping the retailers by helping fund new purchases (this assumes that those who buy new don't have an endless source of funds ). I'm sure the retailers and some manufacturers would prefer that everybody buy new but where would all that used equipment go?

Dick
judit
217 posts
 

Consider this:

I have spent over $10,000 this year on audio equipment.
I will spend more than that in the coming year.

1. 100% of these purchases came from audiogon.
2. 80% of them involved dealers selling demos, closeouts or used equipment.
3. I would have spent NO money, if left to work within the current paradigm - exclusive dealerships selling at MSRP. And I mean NO money.

The health and potential of high end audio is most apparent on web-sites like audiogon. People who really love music and audio technology are willing to compete to own equipment at what they judge to be fair prices. This is a VERY viable business concept. And I am putting my money where my mouth is - as you are.

I would suggest that what you have done is to break out of a flawed paradigm for doing business and taken a step out into the brave new world. Guilt is always the price of breaking with tradition.

I applaud the dealers who are forward looking enough to work with Audiogon members. High end audio isn't dead - it is alive and well, right here.
zaikesman
3,017 posts
 
You make it sound as if you didn't broach the subject of price with the stores you solicited bids from. Yes, better salespeople than you apparently worked with wouldn't have let you fly away so easily without a fight - a weak salesperson with stars in their eyes from a potential big-ticket deal will hold onto the dream of getting a full-boat sale even as it rides off into the sunset (despite the fact that 0% of MSRP isn't preferable to >0% of something real). But in my many years of being a retail salesperson, the customer behavior that still baffles me most (can't say surprises, as I expect it) is the almost total reluctance many customers display in simply letting the salesperson know what they want. Many otherwise friendly and open people seem to feel they must protect any information they have developed through comparitive shopping (and the criteria it has created in them) as if it was national security secrets or something. True, it is definitely the job of the competent salesperson to elicit this information from the customer so that they can better serve them, but it nevertheless amazes me that such a high percentage of otherwise intelligent and assertive customers are forever unwilling to recognize that they stand a much better chance of receiving what they want if they will simply ask for it. I don't know if this applies to your case or not, but I've never known a small business where management will refuse to work a deal below MSRP for a substantial package purchase (and frequently a much smaller purchase than that) if that's what it takes to make the sale.
unsound
7,329 posts
 
Many good point posted so far. As far as a dealer asking full price on an item not in stock and therefore unavailable for audition, they only way I think one could justify this is if the return policy was generous (full money back).
tinman
35 posts
 
Who would pay full MSRP for products that every one knows there are more than 50% mark up? For buying a car, the dealers certainly don't have 50% mark up and everyone negotiate the price for 5%-10% off. On top of the mark up, audio dealers don't carry the high dollar items in stock so they have to order the product for the buyer anyway. Therefore the dealers are the problem when they insist to sale products at the MSRP. You can figure that you may spend 5-10 hours auditioning the products before decide to buy, then the time you occupy the time could cost $300-$500. For an average price of high end audio of $3-4K, then the margin should be 25% or so. I don't think the comsumers are wasting the dealers' time. It is the other way around.
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