High end is not dead but it’s very sick. As president of a large company with a CPA background, my observation is that the dealer base has shrunk to an obsolete level, just look at the city you live in, how many dealers are left?
Kids don’t spend Friday nights in stereo stores any longer, they listen to downloaded music on iPhones, families can’t afford to buy houses so disposable income of the masses is lower than it has been historically, the facts are there. We are also just 10 years out from the biggest financial depression in history, that is a real truth. The fact is, who can afford to buy a new from dealer system with a $30k price tag (a modest system to say the least), people just can’t.
High end manufacturers are very small companies that have brilliant product and design minds but very seldom are their business acumen’s in line with what is required to grow a business. That is a typical issue in the world of small business and that’s why so many fail. The fact that isolates high end is the retail pricing based on cost and manufacturing margins. Efficient producers will benefit where inefficient producers will argue that margins are low although their retail MSRP’s are high. Another fact is that audio is not a necessity so the companies are not forced to fall in line with a specific retail price range in order to compete. They will tell you they do but they really don’t do that consistently throughout their product range. Example, all consumer car companies have entry level cars, most high end companies do not. Remember, I said entry level, not $18k for a phono preamp!
Most everyone will argue my points but just ask a manufacturer if they have seen a mass decline in a dealer base to sell to, all will agree. I just spoke to one last week who blames the dealers for discounting retail prices for the industry failure. 75% of his sales are in Asia. I also asked him how much a full range speaker to fill a 26’x17’ foot room would cost from him and he pointed me to a living room dealer, a guy with a nice room in his house, and recommended a $185,000 pair of speakers. His company is well known and respected and he was wonderful to talk to but that is not going to happen!!!! That is another big issue with the industry. How many business models do you know in the retail space In today’s world that sell at 100% MSRP?
Look, I love this hobby and got the audio bug as a very young boy, I’ve spent much time horse trading equipment my whole life searching for the ultimate sound like many of you have but the fact remains that any industry that can only survive with massive pricing because they’ve created a market where only the super rich can comfortably afford their products will get used sites like Audiogon doing more used business than the industry sells new. It’s a true measure of how sick and “dying” our favourite hobby is.
sorty for the blues but it’s a reality!!
Kids don’t spend Friday nights in stereo stores any longer, they listen to downloaded music on iPhones, families can’t afford to buy houses so disposable income of the masses is lower than it has been historically, the facts are there. We are also just 10 years out from the biggest financial depression in history, that is a real truth. The fact is, who can afford to buy a new from dealer system with a $30k price tag (a modest system to say the least), people just can’t.
High end manufacturers are very small companies that have brilliant product and design minds but very seldom are their business acumen’s in line with what is required to grow a business. That is a typical issue in the world of small business and that’s why so many fail. The fact that isolates high end is the retail pricing based on cost and manufacturing margins. Efficient producers will benefit where inefficient producers will argue that margins are low although their retail MSRP’s are high. Another fact is that audio is not a necessity so the companies are not forced to fall in line with a specific retail price range in order to compete. They will tell you they do but they really don’t do that consistently throughout their product range. Example, all consumer car companies have entry level cars, most high end companies do not. Remember, I said entry level, not $18k for a phono preamp!
Most everyone will argue my points but just ask a manufacturer if they have seen a mass decline in a dealer base to sell to, all will agree. I just spoke to one last week who blames the dealers for discounting retail prices for the industry failure. 75% of his sales are in Asia. I also asked him how much a full range speaker to fill a 26’x17’ foot room would cost from him and he pointed me to a living room dealer, a guy with a nice room in his house, and recommended a $185,000 pair of speakers. His company is well known and respected and he was wonderful to talk to but that is not going to happen!!!! That is another big issue with the industry. How many business models do you know in the retail space In today’s world that sell at 100% MSRP?
Look, I love this hobby and got the audio bug as a very young boy, I’ve spent much time horse trading equipment my whole life searching for the ultimate sound like many of you have but the fact remains that any industry that can only survive with massive pricing because they’ve created a market where only the super rich can comfortably afford their products will get used sites like Audiogon doing more used business than the industry sells new. It’s a true measure of how sick and “dying” our favourite hobby is.
sorty for the blues but it’s a reality!!