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
Hope you don't mind a slight detour question -- it's related to the thread. If I buy a component through the used, internet market and the component at some point needs servicing by the manufacturer, and if the manufacturer requires me to take the unit to a local dealer for shipping rather than having me ship the unit directly to the manufacturer -- how does this affect the dealer? Does the dealer get a commission for handling the transaction? Are there any negative impacts on the dealer I should be concerned about? Thanks.
Jcbtubes...great point...and one I failed to mention...the majority of cost in hi-end products are R&D and labour...not material costs...you are essentially buying a hand-made product by very skilled engineers...these are the "intangibles" when buying good gear...many newbies balk when looking at 2k monitors for example...but when u factor in design,quality,and performance...it begins to make more sense...Are all hi-end products deserving of a high pricetag? Ofcourse not...there will always be inflated products that offer sub-par performance...but those that have done research...or encounter an educated sales rep(there are still some out there)...will avoid these pitfalls...

Also...buying very hi-end audio/video is like buying any luxury item...if the buyer and seller cant strike a deal...the consumer walks...that is his perogative...there is no need to bash the dealer for not meeting your price...or for complaining that the margins are 2 high...nobody is putting a gun to your head to buy this stuff///
Phasecorrect, Although I agree with you in principle, in practice it doesn't work this way.

In principle: Dealer makes offer, I decline because it is too high and we part friends.

In practice: Dealer does not want to make offer, when I decline I am treated with contempt unlike anything I have ever been subject to in the retail market. I am also blackballed because the dealer knows I can get a better price. I think you may be underestimating how DEEPLY dealers resent the internet / used market.

I see a mounting crisis that is probably headed for the courts.
Judit,
You should continue to buy used or internet only, and stick to advice and information from internet forums. This is your choice. The serious contradiction is when you try to use a dealer's knowledge and facilities for auditioning, then go elsewhere to buy cheaper.
As long as you are fine with the downsides of the internet, go for it; just act ethically relative to dealers. I can't blame any dealer for acting contemptuous after you spend time listening and then go into a bidding game. You are listening to a piece of equipment that the dealer had to purchase; it isn't on consignment from the manufacturer. Usually the MSRP is determined by the manufacturer as the fair value of his time and labor, plus sales costs (i.e. dealer costs).
Judit...point well taken...but if price is your motivating factor...why even bother with a dealer? Yes there is a premium for service...but a good dealer will stand behind their products if something goes south...there is always an element of risk when going used off the internet...or used in general...my local dealer has tons of used equipment on consignment...for which they take 25%...there are also very few established hi-end brands that allow internet sales of new equipment...this is a tightly guarded industry and word travels fast concerning unauthorized gear...I dont think used equipment is hurting the industry...afterall...this stuff was once new...and there has always been a used market and will always continue to be...whats hurting hi-end dealers is the improvment of midfi priced equipment such as Paradigm,etc,the overwhelming interest in HT...AND the fact that many smaller, esoteric makers have decided to by-pass dealers all together and go the internet direct sales route approach ...such as HSU subs,etc...