High end vs internet

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.

I feel compeled here to speak on several points mentioned here, if for nothing, because I've worked in the high end A/v business for many years, and know first hand what the internet has done to change hi-end...
Yes, it's true, the internet has caused some major changes to occure in retail hi-end audio sales by-enlarge. But hi-end will NEVER DIE ON A RETAIL LEVEL!....GARANTEED! As long as the "smart" retailers of Hi-end focus on SERVICE...THE HI-END WILL SURVIVE IN MY OPPINION!..that, and if hi-end manufacturers continue to keep internet sales under control.
Indeed, a lot of the mass market mid-fi products have hurt Hi-end retailers quite a bit. But the ones that mostly deal in "exclussive", "non-internet" sold products, are still selling hi-end I think! Still, most of the retailers I've talked to say that "custom installation is keeping us a live!" And for now, I can certainly see people want to ride the "new and exciting wave of internet purchasing fun", at least for now. So, I think hi-end retailers have had to refocus..and I think that's VERY GOOD FOR HI-END IF YOU ASK ME!! Why?...because hi-end retailers should no be forced to focus more on something you'll never get by shopping "on-line", and that's SERVICE!!!!!
I really actually feel sorry for the masses that are duped into thinking they are saving money, and getting the best gear cheap, and getting great Hi-end sound!!!!...JOKE!!!!
I GARANTEE that everyone who simply reads magazine articles and reviews on products, and buys em on-line because it's cheaper, is ending up WITH LESS THAN STELLAR QUALITY AND END RESULTS!!!!....GARANTEED! Why I think the high end will never die at the retail level, is that YOU CANNOT REPLACE SERVICE!!!!..and there is really no service on-line!
I personally think this "net-thing" has lowered the overall quality that people are ending up with! You can't replace what a knowledgeable, skilled, and experienced hi-end salon has to offer in general! Some of us guy's have been pouring "blood, sweat, and tears" into finding out how to put together higher fidelity audio/visual experiences, and you can't replace that buy simply buying "potentially excellent gear somewhere" And I know that if you buy a pair of speakers from me at a retail shop vs. if you buy em on line and hook em up yourself at home. 999/1000 times buying em from me is going to yield you a FAR BETTER SONIC EXPERIENCE, because I can be there for you to give you the sevice and advice and experience that's going to get those sepakers sounding FANTASTIC for your system/set up!!!! I mean, I know FOR A FACT that I'm going to be able to help you set it all up and make the right chioces better than ANY AUDIO NEWBIE, AND 99.99% OF the experienced audio junkies!!!!
So, if I was a retailer, whould I sweat the internet any??...NOT A CHANCE!!! Because I'n going to be there for my customer, stand behind the products, offer WORLD CLASS SYSTEM SET UP, DESIGN(IF APPLICABLE), INSTALLATION, ADIVCE, CALIBRATION, and proper matching equipment and recommendations THAT I KNOW WORK!!!!...or I'll change it out for you!!!...THAT'S MY THINKING!
So, I guess someone could get all worked up over buying their Mark Levinson amp on Ebay or whatever. But I think, if I was a retailer still, I could care less if my customer decided to do the "net-thing"! Because I know, in the end, he's LOOSING OUT BIG TIME!!! He may end up with a potentially great piece of gear for cheaper(maybe not the right gear, as reviews are no way to make decisions), but he won't be getting a WORLD CLASS audio experience likely...from my experience that is!
So, for me, I think SERVICE HAS TO BE WHERE IT'S AT! The gear is only SECONDARY. I mean the gear is only half the equasion. And usually people who rely on buying things cheap over the net, end up short! NOt to mention the other draw backs of "internet buying"! (too many "uncertains")
So, In short, I think the reason internet sales havn't "BOOMED" QUITE LIKE THEY WERE EXPECTED TO, IS THAT PEOPLE STILL NEED SERVICE! ...and the net can't provide it!

Audiogon thrives because USED HIGH END GEAR HAS GOOD RESALE VALUE and the internet provides a community of customers clamoring to get in the door so they can compete to buy.

Audiogon has cut deeply into price-fixing practices. Thank God.