High end vs internet

Manufacturers like to give dealers "territory". Problem is...I have a computer, a car and absolutely no respect for price fixing schemes of this nature. Without considering mail order sales, ceteris parabis, price is first, service is second and all other considerations are third. If you give me a price we are BOTH happy with and minimal, but adequate service I MUST give you consideration. Geography is not in the top two. Manufacturers and dealers CAN NOT really give territory. St. Louis, Nashville, Cincy, Lexington, Memphis, Columbus, Chicago and Indianapolis are all within a few hours drive from me. My Louisville dealers MUST consider competing in all those markets. It is a GLOBAL market in home electronics partly because of the added knowledge the Internet can bring to our economic decisions...therefore you (dealers) gotta try to compete with everyone. If you are a dealer and you are not moving enough product or the margin is insufficient to justify the demo unit, good service and demo space...drop the line! Fewer dealers doing what needs to be done is better than too many dealers doing too little AND going broke too.

I think that the shift of interest from 2 channel stereo to HT has killed off the small stereo stores that specialized in high end stuff and were not quick enuf to see HT coming and convert. I only started looking at the internet after i couldn't find local dealers - i'd still prefer local dealers but driving 100 miles or more isn't "local" to me. When you're buying high end stuff a GOOD dealer will always beat the internet especially if they have on site competent service men.

The internet has done the following to hi-end audio:

1 - It has opened a used hi end market that was not possible/realized 10 years or so ago due to not having the internet to connect the masses across the world.

2 - It has hurt new sales at 'full retail prices' due to the fact that people can shop globally for new or nearly new pieces.

3 - It has created a network/forum for people to communicate and discuss hi end equipment. The this has helped small companies/manufacturers bring excellent products to market and prosper through good word of mouth over the net.

4 - It has created more avenues for hi end dealers to sell product. This touches upon your dealer's problem. Some dealers feel a bit shafted by the internet. Why do they feel shafted?
a. People will look at their store and even demo an item from them, and then they will buy that same item online.
b. They cannot beat many online prices due to the cost overhead they run. They have to mark up items 30% to 50% to make a profit. Many internet sellers can get by with a 10% to 20% markup.
c. People come into their stores and pick their brains. They give expert advice. And the people end up not buying anything.

I have worked part time as an audio salesmen before (at a large dealer). My best advice is the following:

1. Get creative and use the internet to your best advantage.
2. See more used gear and buy and sell it online.
3. Get into servicing elecronics. Get a good technician, pay him well, and charge $50-$75/hour for fixing electronics. The dealer I worked with was always backlogged with stuff to fix.
4, Get into HT and HT installation. Not everyone can install a great home theater system. If you are good at this, there is money to be made.
5. Settle for low margins on high dollar items. A dealer should be able to settle for a 10%-15% margin for $16k amps. I'm sorry, but look at the markup a car dealer has on a $16k car.... A car dealer loves %10. AND CARS DO NOT DEPRECIATE (SILLY LIKE) AS AUDIO GEAR DOES.
6. Be willing to sell your demo pieces to anyone who wants to buy them. And sell them at Demo prices (10-15% markup). Too many dealers I have met insist on keeping their demo pieces for close to a year before they sell them in a large sale. There may be some logic to this, but it is beyond me.
7. Do not carry a manufacturer who's Distributor does not support you. You as the dealer are the front line for the manufacturer. If you make a promise to a customer, the distributor should support you. If they do not, well drom him (or he should drop you).
8. Do not feel ashamed to carry Receivers. They are the bread and butter for many audio stores. And people have to start somewhere (I started 17 years ago with a Kenwood Receiver.... and look at the audio fiend I am now).
9. Train your salesmen. Audio salesmen I find fit into 1 of 2 categories. They are either good salesmen who do not know a lot about audio or they are audio geeks trying to be salesmen. One needs to be trained in audio, the other needs to be trained in sales. If I walk into n audio store, and the folks know less than I do about what they sell, I get disappointed and leave. I do this as a hobby, people that do this for a living should be pros/experts.

KF

I agree with Tok2000's first 3 points but the 5th is wrong. There are some very fine dealerships in the Bay Area that are trying to do a signficant high end music business, not just ht. There is no way a store owner can pay salaries and overhead on 10-15% markup. The reason a car dealership gets away with 10-15% is that they sell large volumes - exactly the opposite of high end audio.
I appreciate the expertise and experience of good audio shops plus the need to audition before buying, and I will not waste a dealer's time. MSRP is the differential that allows them to continue doing high end.

See the recently closed thread "HELP Electro...." for interesting perspectives.