Why can you buy a car at dealer Invoice but audio

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.

I've been in the business 30+ years and Jea48 pretty much has it nailed. There would be a shop on every other corner if selling high end audio was as profitable as some of you think it is. Just not enough volume for a local shop to sell at a lesser profit margin.

BTW although most of the comments made about how car dealers make there money is true but you can not compare there high volume/commodity car business model to any type of specialty retailer. Again the difference is in volume. Just like the cell phone business the profit is not in the phone (as you know they pretty much sell them below cost or give them away) it is in having tens of millions of phones with all those airtime minutes. Or computer printers which manufacturers sell below there cost but make it all back and lots more in the the ink. Do you see audio shops with large service centers running full time (labor is very profitable)? Or selling you some monthly subscription so that your new amp will have it's magical sound quality renewed every thirty days?...So when a car dealer sells at or near cost it's because he wants to get your trade in to sell it at a healthy profit, and supply service for both which is very profitable.