You’re An Independent Dealer, Which Companies And What Products Would You Represent?

As a 40+ year retired peddler of decent audio gear, here’s are my comments for your friend:

My favorite church reader board displayed the message: "A good friend stabs you in the front." This isn’t going to be gentle, but your friend needs to be put in a headlock and taken to the carpet.

A rep/friend of mine were discussing a dealer who had been in business for 30 years down the street and had become dormant/irrelevant for quite some time. His comment: "He’s got one year of experience -- 30 times!" Reminds me of your friend.

"Retailers" have to reinvent themselves continuously. The goal of "lighting them up" when customers cross your threshold is obtainable and sustainable. If you’re creative, and want to work hard enough. A guy who asks a non-industry friend about what brands to sell probably should be doing something else at this point in his life. He may have crossed the event horizon where there is no escaping the black hole of business failure. The gravitational forces may be so strong that not even high resolution audio can escape it.  It sounds like your friend was good at riding the wave of the glory days of "consumer" audio, but doesn't know how to crate his own momentum when the waves crashed on the beach..  A poster once  read: "When there's no wind -- row!!"

I’ve seen the prostitution of "specialty audio" brands up close and personal throughout the years. It is ugly, heartbreaking, and unprofitable. It also converts the very fine people working for you into mere brokers of audio gear, rather than audio consultants. You need those brands for promotion to build traffic, to hit "popular" price points, or have some brand familiarity with newbee customers. I can also say that once those brands are established at Big Box, the illusion will be that they will always get a better deal there. I am certain that a half price sale on those items at my store would not have been a traffic builder. I am also certain that 50% off on bad-sounding equipment is still bad...sounding...equipment.

Here are some basics:

There are transaction-basedl customers and relationship-based customers. The transaction-based customer fears not getting the best deal that day. The relationship-based customer fears not buying the right product from the right dealer. It’s good to know the difference. Make sure you are overprepared to service the latter.

People spend money on what their attention is on. ANY excuse to get in contact with your customers is a good one. I required my salespeople to do immediate followups to ANY sale (even $5) to see if the customer is okay with the purchase, needs technical assistance, etc. I also REQUIRED 6-month follow ups. This can get a little tricky because it is not allowed in some areas. My rule was that there could NEVER be an attempt to sell anything. Just a good will call to see how they are getting along with the item. There are 3 benefits for the dealer here: 1) customers are genuinely appreciative of the concern for their well being, 2) their attention is back on hifi for a moment. They may have had root canals, back to school, transmission rebuilt, new bike, etc in those past 6-months and thought very little about hifi. For a brief moment in time they are thinking about how much that like (or dislike) their audio system. And, 3) every now in then, someone will ask: "Hey, I was thinking about putting sound out on the patio. Do you do that?" In that case, you can load up a couple of rock speakers and inground sub and be there while there’s still a head on the beer they just poured.

Service? Keeping old gear with a strong emotional attachment from going into the dumpster can be rewarding and profitable.

Differentiate. Make sure the customer understands that EVERY aspect of your business is superior to Big Box in every way.

Research the brands you want to carry. As mentioned by others, he may not qualify for a number of reasons. A store dominated by "popular" brands may be a disqualifier. Your dealer friend should be fluent in "legit hifi brands" by now, but if not it’s up to him to do the research, fall in love with a group of (protentially profitable) components, and bursting at the seams to tell the world about them. If not, what’s the point?

The profound statement: Learn/teach your staff how to use this. I call this the "profound statement" -- something you say that makes the customer want to hear the rest of your pitch. When asked about a Big Box brand, a comment might be: "The only similarity between (my amp, and theirs) is that that they both have power cords in the box and on/off switches. Everything else is different." Or, "You can’t overspend on a source component." Or, "Are you wearing Depends? I don’t want to be responsible for what happens when you sit in front of these speakers." You have to know your audience here. Some react differently to various communication styles (and, humor).

Sustain the "hifi culture". Pretty self-explanatory, but critical. It never stops. Keep it fresh, and exciting.

If none of that works, I’ve heard that putting an EV charging station in front of your business can be beneficial. Spin a record while you’re charging your Tesla?

@waytoomuchstuff just to clarify, my friend did not ask me for advice on what brands to carry. Don't know how you got that notion.

Yea I have to agree that dealing all those super-precious pieces is definition of making from large fortune small fortune, because statistically it's extremely hard to educate crowd to purchase systems that require a mortgage and lenders don't give much for that expendable stuff. 

Knowing market is the burden of starting a high-end business, unless you're a child of the wealthy and want to play with high-end sound opening up your own hi-end store on dad's wealth and see if you'll be able to profit a-bit.

@goofyfoot 

"He was telling me that the bigger store was carrying the same brands and products that they’ve been carrying but that they were buying inventory in mass quantity. And, that the only way for the small store to separate themselves from the mega store would be to represent companies and products that the mega store can’t or won’t showcase. However, which companies and which products, this is the question"

I guess I was unsure who was asking the question.  I assumed it was the dealer, or the dealer's representative.  I may have incorrectly connected the dots here.  

Best of luck to you, and your dealer friend.

I’m the noob and underdog in this game. I started my dealership in April 2022, so it’s been less than 1.5 years. I’ve been selling used equipment due to my own audiophile gear swapping craze for years, and once I got to a good place, I decided to turn it into a business so I could help others. There have been a ton of learnings, some of which I’ll share below. But I’ll say one thing above others - being a high end audio dealer is not the top choice for those who want to make a quick buck. The only thing that keeps me going is passion for the hobby, which most dealers don’t have, and the relationship-building that @waytoomuchstuff describes in ways that it results in a customers’ happiness in stages. Without those two, I’d gladly take my investment back as it’s been an incredibly grueling road.

To get back on @ghdprentice and others have touched on some of the challenges of the brands one would represent - Some of the most coveted brands may have only one distributor in a country, and that distributor may be the only dealer. Audio Group Denmark is a good example of this, where Next Level Hifi has been the distributor for years, but more recently they have eliminated a number of dealers from their network so that they can better control client experience and margins. Some of this is due to dealers selling gear at rock bottom prices to get by, and that is understandable - but this is often due to the overpriced retail value that many manufacturers warrant.

For many conscientious manufacturers and distributors, territory is still very real. This in itself limits the number of brands available to me. For example, being in Minnesota, Audio Perfection is a well-known dealer that has been around for 30 years or so, and they have held the keys to Wilson and Audio Research. While a relationship with Wilson would warrant a demonstration of millions in revenue, Audio Research is a company I might consider, pending the outcome of their financial situation in the coming year. That said, Audio Research will likely not let me deal for them because of Audio Perfection - or more so, if Audio Perfection found out that one day I started carrying Audio Research, they would likely threaten Audio Research and disable me from being a dealer. So that territory limits brand availability.

There are many brands that are more widely available, but other challenges accommodate those. As some mentioned above, ubiquity isn’t always a good thing because a smaller dealer will be up against bigger dealers or chains that are able to offer more - bigger discounts, better return policies, etc. For one example, I literally had a potential customer come to me last year inquiring about a streamer and asked me to match the lowest price quoted to them by TMR, which was well below what it should be selling for new, along with a 60-day no questions asked money back guarantee offered by The Music Room. I politely declined and encouraged him to go with the offers he received from the big boys. Keep in mind that the companies who offer more widely available products also generally offer smaller margins, and it crunches a dealer at both ends when competing with bigger dealers.

As such, I’ve kept the list of brands that I support very curated, and I’ve made conscious decisions that I only invest in:

1) Brands and products that I can truly stand behind - sonically, visually, and from a customer service capacity. When I first became a dealer for T+A, Aurender, Synergistic Research and DH Labs, it was because after many years of personal experimentation, those companies represented pinnacles of performance for me. I already owned their reference gear based on my own advocacy, and I simply invested downward to further populate my floor. I could already speak to their performance because I had years of personal experience with a number of their products in comparison to others.

2) Brands and products that are from manufacturers or distributors who are genuinely interested to help me as a dealer to flourish. Continuing on from the story above and perhaps the most important part of it, all of those brands have sales leaders that saw me coming to market with a fresh approach, leading with consultancy and relationship-building first in the intimacy of my own home. They were all behind trying to help me create something special, and even if I am not leading their sales quotas (not even close!), they believe I am a positive extension of their brand. Sometimes, when asking nicely, I would get equipment demos shipped to me based on customer interest, or even personal interest, so they could aid me in a sale of something I did not have to demonstrate on hand or to enable me to learn about. Most manufacturers and distributors won’t offer that as an option. Also, as a new business that has been funded organically, I reinvest just about all of my profits in one of two ways - I either expand upon a brand I am already carrying or invest into a new line. The challenge here is that investing into many of the high-end lines require a minimum buy in - sometimes equaling over $100,000 out of a dealer’s pocket ( keep in mind I started my business with $50,000 last year, so those situations are very difficult for me). Being able to work with manufacturers that are willing to hear my growth plan, help me carry their lines in a test-and-learn approach with a commitment to further invest in other products for my floor as growth is demonstrated is a must have. I am especially thankful for the distributors that have extended this type of relationship with me.

3) Brands and products that deliver. While @ghdprentice mentioned, having things in inventory is key, this is not prudent for many small dealers like me because nobody wants to be stuck with equipment they do not sell. From a tax benefit perspective, inventory cannot be written off, whereas display items can. As such, this puts me into a position, like many other dealers, to carry as little inventory as possible and rely on manufacturers and distributors that have excellent, if not plainly satisfactory fulfillment services. This is still something I am learning from as I have been burned by a few distributors in this past year of not having some of my orders fulfilled, having a customer or two cancel as a result, and leaving me to be the helpless punching bag in the middle. Never again, and some of the brands that I list on my site will change in the coming months. The fulfillment of any manufacturer or distributor is a direct reflection of the dealer, and for me wanting to put customer experience first, I cannot afford to support brands who cannot reasonably deliver to customers. Even if a product may take 1-2 months to get to a customer, it is okay if those time commitments are upheld. But if production or shipment is delayed for inexcusable reasons, it is obviously a risk in my book that I will mitigate moving forward.

4) Brands and products that satisfy customers based on where they are in their audio journey. This next story is a bit off-topic, but hopefully worthwhile and ties back into this point. I originally became a dealer because I want to help others achieve what I’ve achieved for myself. I originally envisioned helping younger generations, in their 20s and 30s, to discover a newfound appreciation for two-channel audio. After all, if we don’t encourage them to carry the torch, this industry will die. But what I quickly found out is 1) They need a LOT of hand holding and time investment, 2) do not have money to spend, and 3) are most likely to be in the market for the mass-market mid-fi gear that I describe above that has small margins. No wonder there is a lack of appreciation of the hobby for this generation! It is almost impossible from both sides to make it successful. That said, while much of the gear I sell is beyond mid-fi, I make conscious decisions to work with customers of varying living situations and budgets. I carry Vivid Audio because I think they make some of the absolute best speakers. I carry Scansonic MB-B line because I think they make some of the best speakers for the money. Getting a customer to hear what can be done in a mid-to-large room with a $4K Scansonic MB-2.5B, which is a small, slim floorstander that takes up no more than a bookshelf speaker on stands paired with a $6.5K Cambridge EDGE A integrated amplifier is a thing of beauty. Simple, full, holographic, soulful, and transparent, sounding with synergy systems with another zero to its budget cannot attain -- and no sub needed for a larger room! Most of my customers are still in the 55-80 year demographic and do not consider portability to be a constraint applied to their system, but younger folks surely want to keep things as simple as possible. It’s important to be able to deliver on both of those while maintaining the integrity of the performance, and that requires the products I carry to be very special in one way or another. There is no ’filler’ in my product offering.

5) Brands and products that invest in themselves. As a dealer, I should not be responsible for handling much of the marketing positioning for their products. When they bring products to market, they will have hopefully understood the market opportunity - the audience need, a projection of demand, a relevant positioning and price point for the performance, and how the product fits into the rest of their portfolio. If not, I do offer services to them to improve this experience, and at times the brands I carry have taken me up on these, and together we have released improvements or new products altogether that I am very proud of. If they are not willing to invest, take feedback and consultation from their dealers and customer base, in order to improve their marketing or product performance, it will only show flaws through lackluster customer satisfaction and limited revenue stream in the future. Innovation is not about putting revolutionarily new stuff out there, but more so improving what is available to people such that we place greater value into these things when they are released. It all drives back to meaningfulness, and I want to make sure that everything I carry can have meaning in my customers’ lives.

While I don’t just plainly list brands (I did mention a few of the ones I carry, and I do carry others and aspire to take on a few more in the coming years), hopefully this gives you some insight into the dynamics a dealer needs to face when evaluating them. Of course, if a dealer just wants to make money, or doesn’t carry passion for the hobby or customer, many of these considerations are compromised. But it’s never as simple as just "I would carry this brand because I think it’s the best."

If you’ve made it this far, thanks for reading, and if you’ve got any reactions, please share them as I’d be happy to hear them. I do very much appreciate the perspective of this community and the great relationships I’ve built with a few of you over the past two years, and I look forward to continuing to learn from you and be of service to you.

All the best,

Juan