Margin on speaker sales by high end dealer


Many a times, you talk with a dealer and they order and deliver the product. So you spend 10k on a pair of speakers. Seems very simple to do by a high end dealer. And most often done without an Instore  visit.
So how much are they making?
emergingsoul
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Upscale Audio carries many brands.  They are the US Distributor for Prima Luna and maybe one other, that I am not certain of.  The majority of the brands they carry are the same as with any other quality audio retailer.  I have known the owner for over 40 years and he is an upstanding guy and runs a wonderful business, catering to his customers very well.  I'm not quite sure what the issue is with the McIntosh unit cited above, having a dealer cost of $6K and a selling price of $21K.  Something is odd about that.  Trust, the margin for most electronics is about 40% and is not 3 to 6 times markup from cost.  A $10K retail item has a dealer cost of about $6K.
I worked in the consumer electronics industry for over 40 years, both home and car audio electronics of high end brands.  I managed the Western States of sales teams and for total sales & distribution.  I engaged with about 250 independent retailers and over 400 outlets, in total.  Not bragging, but I know this industry well.  High quality electronics have a profit margin from a low of 35% to a high of 45%.  Speakers have a profit margin from a low of 40% to a high of 55%.  There are typically backside business program benefits that range from 3% to as high as 10% but on most of the high cost electronics and speakers the average is around 4% to 5%.  And that is only if you are doing some substantial business volume.  The small retailers quite often do not see any backside program benefits.
This notion of exorbitantly high profit margins is simply incorrect.
Support your local independent retailer as often as possible.  If you can't because where you live there are no brick & mortar retailers then seek out any of the manufacture authorized e-commerce retailers.  The playing field is fairly level for all of these retailers and the vast majority of them are honest and upstanding business people.
Mammothguy54-you definitely know what your talking about. Spot on.

d2girls-that is way off on mcintosh. Something was wrong with that invoice.


"The product cost is 12k and his gross profit is 8k, a 40% margin.
This is helpful to know."
Are you opening an audio dealership?
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