Why can you buy a car at dealer Invoice but audio

In the beginning there were many small Mom and Pop hi-fi shops around the country. Usually staffed with a mature, knowledgeable and passionate people but alas the prices were sky high. Next came the specialty retailers such as the Circuit City/Good Guy's types where prices were more discounted but the staff was younger, and less experienced (read lower wages). Lastly, you have the big box chain that discounts heavily. Do not have much staff to help you and is currently in a makeover to be profitable again because they can not sell enough service plans or overpriced cables to make up for selling the TV at cost.

There are some variables in profit margins for stereo equipment. It's not always 40%, sometimes it is more depending on the product and the arrangement between the manufacturer and dealer. Cables and other accessaries are almost always 50%. Mark up on cartridges are off the charts. I expect a discount when buying new unless I perceive the retail price to be a bargain.

Do you really believe cars are being sold at dealer cost? When buying a car you can't trust the salesman for little things, so why would you believe they are selling you a new car for what they paid for it? I see dealer invoice as just another fictitious figure.

It works the same way on car parts from the dealer. They are charging you double. My mechanic charges me half of what the dealer charges for OEM parts and everybody is still making money.

Some make money in quantity and others want to make it all at once. You can sell thousands of $89 DVD players, two $40,000 amplifiers or one set of $150,000 speakers.

Go check out the book, what car dealers don't want you to know.

It is a serious eye opener for this type of business practice. I actually read the book from cover to cover and went with your significant other to help her purchase a new Tahoe SUV a few years ago. Each and every dealer did basically word for word and action for action what the book said they would try to do. It was amazing to watch. It was like watching a TV show as an outside party. The cheap and dirty things they tried to do was amazing and was laid out exactly in the book. She couldn't believe it either. I imagine that in the high end audio sales industry there are similar games played. Go get the book. you will be amazed at what happens and what you have fallen for in the past without every knowing it.

enjoy

I meant to write "went with my significant other"

yes, a dealer does not make a 40 % ptofit on electronics, or a 50 % profit on cables. as has been stated previously, there are fixed and variable costs to consider.

however, a dealer who runs an efficient business can maximize his profit.

let's go back to the car dealer analogy.

if a buyer offers a price that is too "low" but the dealer makes some profit, he is better off selling it unless he thinks he can get more for the car in a short period of time.

an audio dealer is better off making a smaller profit if he can do a volume business, otherwise his money is tied up in inventory, waiting for a customer to buy the product at a higher price.