I sold audio in a retail setting from 1975 til 1988 and sporadically after that. In those days, hi-end stores were able to subsidize the cost of maintaining a high dollar inventory by selling large volumes of mid-fi stuff. We didn't have cables but most stores pushed some higher margin line of speakers as a loss leader and cheap phono cartridges had as much as 90 points in them. We used the term points to indicate what percentage of the total ticket was profit. A 40 point line cost the dealer 60% of list price. As a salesman, I was a sharecropper. I would work the floor typically maintaining a 31 to 35 per cent aggragate profit, of which I was paid 17 to 20 per cent. What this means is that I got between 5 and 7% of my total sales volume. This represented a significant piece of dealer overhead. Shipping, advertising, insurance, FICA, high rent, large floor space, yellow pages, utilities, etc. all added up. But the dealer could do it.........until the Best Buys and Circuit Cities took away the mainstream. As someone else stated, the higher end product did not offer the margins that were growing on the mid fi stuff. Also factor in that the mid fi customer was less savvy and more apt to pay list price and be otherwise duped. It left the high end store with the option of moving to HT or trying to hang on with infrequent high end sales. Today high end audio stores can only survive in areas of high population density and places like where I live are virtually unrepresented. That's a primary reason why I use Audiogon. We all know that the initial purchaser eats the depreciation and fortunately for me there are plenty of you willing to do that.
The higher the price of something, the fewer the potential customers. High end audio very nearly priced itself out of existence. Today there is a new and promising movement in high end. Factory direct marketing is showing signs of success. Srajan of 6moons.com seems to deliberately ferret out products like this for review. Typically there is an in-home trial period where you get to make up your mind slowly utilizing your own system and room over a predetermined period of time. What could be better? If you decide against the purchase, you will be out round trip freight but that can be considered rent on a brand new product which you return with no depreciation or insurance against buying something that you will later have to lose money on at resale. There aren't any villians in the picture. All parties are just trying to make their way. Remember that these are luxuries and, despite the half serious melodrama often expressed, not necessities like the exploitively priced fuels we all consume daily. If you want to be pissed off about pricing, I suggest that you direct your attention toward energy and medical extortion. Those are essentials. Audio consumption remains voluntary.
