restocking fees

Jea48:

The two remaining dealers in my area will check out a
piece of demo equipment for a home audition. Screw that waiting for
something that is being shipped. I'll take the local dealer first over mail
order.

I know we have a different "buying philosophy" here. But to be
even more controversial: Yes, I would buy from the small manufacturer rather
than supporting the local dealer, even with a reasonable "equipment
trial charge". At least in that case, I know that 100% of my investment
goes to a person with skills and creativity, who puts all their effort in making
a good product. The point here is not really to save a few bucks. Being in a
"business" where creativity is most important, I would rather
support the source directly, than people just selling the ideas. In addition, as
mentioned above, checking out equipment for only two days or a weekend is
insufficient IMO.

As for local dealers, I would steer the business model in a completely
different direction: Rather than mainly providing sales service, I would prefer
their position rather as an advisor and service provider. A good example
would be to provide detailed room acoustics improvement and system setup
experiences much beyond what current dealers do, but more in the style of
acoustics companies (e.g. Rives Audio).

Just a slightly different view…

Rene

P.S. Pass’ First Watt effort is almost a direct distribution model where one
dedicated person/dealer distributes everything directly and equipment is
shipped directly from the factory. And it is interesting to see what additional
creativity it allows for the manufacturer (Pass).

If internet vendors expect consumers to demonstrate a leap of faith to purchase items without any benefit of their senses, they should demonstrate a leap in faith that consumers who purchase items do so in good faith. Sheesh, we give total strangers in unknown places our credit card numbers, names and address'. These internet vendors often don't have the cost burden of actually having to learn about and demonstrate the products they peddle. Often times in business I'd have to spend valuable time pitching a bid that never came to fruition for what ever reasons. I'm not happy about it, but I accept the fact that its part of the cost of doing business.

Restock

I know we have a different "buying philosophy" here. But to be
even more controversial: Yes, I would buy from the small manufacturer rather
than supporting the local dealer, even with a reasonable "equipment
trial charge". At least in that case, I know that 100% of my investment
goes to a person with skills and creativity, who puts all their effort in making
a good product. The point here is not really to save a few bucks. Being in a
"business" where creativity is most important, I would rather
support the source directly, than people just selling the ideas. In addition, as
mentioned above, checking out equipment for only two days or a weekend is
insufficient IMO

Jmho I don't think you know how it works. The manufacture needs the dealers. In case you didn't know it, dealers do not sell the manufactures product on consignmemt. They pay upfront for the product plus shipping. If you were to call a Hi-End manufacture like krell, or ARC, bet you would find they like it just the way it is. They are basically a wholesaler and sell directly to the dealer. No one calling them asking them questions, no tire kickers, just buyers. The dealers carry the inventory in many cases setting in their back rooms bought and paid for. Sometimes on borrowed money. And if the dealer doesn't buy enough product from the manufacture a year and another dealer in the area wants to add it to his store, the manufacture will yank the franchise from the dealer and give it to the other. I have seen it happen.

P.S. Pass’ First Watt effort is almost a direct distribution model where one
dedicated person/dealer distributes everything directly and equipment is
shipped directly from the factory. And it is interesting to see what additional
creativity it allows for the manufacturer (Pass).

What do you want to bet that the dealer has already bought and paid the manufacture for his product and the manufacture is holding the items for the dealer to ship to the dealer's customer, drop shipping. It saves the dealer money. Just call "Pass" and see if he will sell to you direct.

Jea48:

Jmho I don't think you know how it works. The
manufacture needs the dealers. In case you didn't know it, dealers do not sell
the manufactures product on consignmemt. They pay upfront for the product
plus shipping. If you were to call a Hi-End manufacture like krell, or ARC, bet
you would find they like it just the way it is.

Traditionally that is the way it is and I have no doubt that you are
right. As a consumer my vote is for a direct distribution system. I know from
certain British Hifi components that dealt exactly as you described with their
dealers. Just strengthening my point that this is a dealer-sold brand not
worth supporting. And you are again right that many big companies do prefer
the status quo.

The current rise in small manufacturers shows that my views do work though.
Take a look at the list of manufacturers that make excellent products and get
away without dealers: Tyler, Omega, Fi, Welborne, Wright, Zu, Moscode, ZYX,
Amazon, Galibier, Teres, Redpoint, Bent Audio, K&K, Dodd Audio, JuicyMusic,
Transcendent Sound, Audionote Kits, Trichord, VH Audio, Ridge Street Audio.

What do you want to bet that the dealer has already
bought and paid the manufacture for his product and the manufacture is
holding the items for the dealer to ship to the dealer's customer, drop
shipping. It saves the dealer money. Just call "Pass" and see if he will sell to
you direct.

Try calling Renohifi and find out whether he paid for all 100 FirstWatt F3, F2
and F1 - I doubt it. In that case it is an exclusive distribution deal of a
singular specialty line.

Another case in point: Magnepan - take a look at their success of their
directly distributed MMG speakers. They would never be able to hit that price
target by going through a dealer network. The point here is that times did
change: With the presence of the Internet, manufacturers do not rely on
dealers anymore to address the small audiophile target audience. IMO the
internet achieves this much more efficiently.

Bottom-line is: This thread addresses restocking fees charged by
manufacturers (which are often small). It did not ask about restocking fees for
online Vendors and dealers. For small manufacturers it does make sense IMO
and is fair. The added diversity and possibility to be more creative is worth
supporting.

Just my 2c for the third time... :)

Rene

anytime a component is purchased as new, there is a risk that it will be unsuitable and sold.

there will be some loss incurred when selling a component purchased new, unless bought at a large discount.

a restocking fee may generate a cost equivalent to the difference between the original purchase price and the price at which the component is resold. in that case there is an advantage in taking the risk of incurring the restocking fee.

assuming there is more than a 50 percent chance of keeping the component, paying the restocking fee avoids the nuisance of reselling.