I didn't want to further derail @millercarbon's Tekton Moab thread, but I think it is a worthwhile topic to discuss how to find speakers that meet our listening tastes, aesthetic tastes, budget, room, etc. Brick and mortar retail is dying because it's becoming very difficult to operate profitably.
Full disclosure - I own and operate an e-commerce cycling business. For ten years, I also had a brick and mortar operation (multiple locations). The economics are a bit different than audio since our average sale was only in the very low three figures, but it's not that different. We still had bicycles that we sold for over $10K, but the cost of those sales was quite high. Over the ten years we had the stores (which were 4-5 times the national average in size and revenue), we made a profit from the stores in three of those years. Fortunately, our e-commerce business was much more profitable and allowed us to cover those losses.
Brick and mortar is becoming more expensive due to higher lease rates, higher payroll costs, and competition with other sales channels. To keep a brick-and-mortar sales channel viable, the manufacturer has to offer the dealer a fairly sizable margin (generally 35% to 60%) and have enough sales velocity that the store can cover their expenses. It's pretty rare these days that there are products that fly off the shelves at a specialty audio retailer.
Our handling costs are a lot lower in our e-commerce operation, but even in this business, the only products we're willing to carry that have less than 40% margins are products we can get 8 turns or more on. This means that the manufacturer has to have plenty of back stock and be able to replenish our inventory quickly, and also means that the product has to have high and consistent sell-through so we can accurately predict our inventory requirements.
For a specialty audio dealer, there are very few products that have high volume. If you think about how much time you've taken up of a dealer, products you've brought home to listen to, etc., versus the products you've actually purchased, it's an awful lot of cost that has to be absorbed by the dealer. I've read countless posts on this forum and others of people that have brought multiple products home from the dealer (or from an e-commerce vendor) only to return it. This costs the dealer (whether brick-and-mortar or e-commerce) a lot. A lot of this returned product has to be sold as open-box or b-stock at considerably less profit, let alone the shipping cost that is often absorbed by the dealer. To stay in business, they have to make enough profit on the product they actually sell to cover their expenses.
For an audio manufacturer, they have to consider the cost vs the value added by having a brick and mortar channel. More and more are deciding they can offer more value to the consumer by keeping the dealer margin in their own coffers.
My career has resulted in my living in a number of different areas in the country since I've been an audiophile, so I've probably shopped at 25-30 different stores. Very few of these have had listening rooms that did the products justice. In many cases, the rooms were crammed with 5 to 20 different speakers. Even in the shops that catered to high-end budgets, the speakers were not optimally set up. This isn't surprising since the dealer is trying to sell a lot of different models.
In the more affluent markets, dealers are willing to provide home auditions which helps a lot, but this is expensive for the dealer and they have to count on a reasonable conversion rate. Too many consumers are willing to take advantage of dealers that offer this. I've seen posts from consumers that literally try a dozen or more speakers, or other components. How do they expect the dealer network to survive.
So what's the alternative? I think for the manufacturer, the best alternative is to do what companies like PS Audio offer. They have a very nice showroom at their facility if you are willing to make the effort. They offer easy returns if you want to purchase a product and aren't happy. And they participate in many audio shows where you can compare their products against many others. By selling direct, they save the considerable dealer margin can cover a lot of customer service costs, including dealing with higher returns and supporting more audio shows.
Sorry for the long post. I look forward to hearing your thoughts and ideas.
This is such a short sighted post, and in fact, it sounds like there is an agenda behind it.
Selling direct to consumer saves the customer NO MONEY. It just means they can keep more of the profit to themselves. It’s the same reason SVS / Emotiva / PS Audio didn’t change their prices when switching from one method to the other. In fact, go ahead and order a PS Audio product now (which I highly do not recommend in the first place but that's another issue)... not only will you NOT pay less, you'll pay considerably more than a dealer would have sold their products for, as no dealer in their right mind doesn't offer at least some sort of discount.
In my area, there are several audio stores that are thriving. It’s posts like this and general ignorance and snake oil BS in the audio industry that is killing high end audio. REAL audio stores that let you listen to speakers and take them home to demo are not hurting from it. They don’t have to sell stuff as open box, because they have the speakers on the floor already open. This post makes zero sense, and is obviously intended to discredit audio dealers and further push people to blindly order products online without hearing them with the illusion that they’re "saving" money.
If anyone is excited about the thought of no retail stores anywhere, and the entire country is just houses/apartments/condos with the occasional big warehouse delivering food/electronics/groceries/clothes to everyone, speak up. I personally don’t know anyone who actively wants to live in that world, although I do know people who are supporting the cause and don’t realize it or understand how awful that would be. No competition either, just a bunch of big companies that own everything, sounds amazing!
I'm glad to hear that you have several stores that are thriving. I think there are areas in the country where this is possible.
I am not saying it saves the consumer money. I don't mean to be confrontational, but it's not just about saving the consumer money. It's also about keeping the industry healthy.
Frankly, I would love it if consumers had more respect for the value that dealers offer, but I don't think they do. Many do everything they can to take advantage of dealers and think they are their just for their own benefit.
Perhaps I do have an agenda since I personally experienced how hard it is to make a profit in brick-and-mortar.
I don't want to see my ability to experience multiple products in a good environment to disappear. So I made this post to get ideas on how to improve the situation.
"
Selling direct to consumer saves the customer NO MONEY"
Are you out of your ever loving mind??
Did you forget about Eric Alexander at Tekton?? Please, add up the cost of the drivers, crossover, cabinets, and then shipping. Look at his profit margin. Compare that to the mark up on any of the big boy brands you care to name. This is very simple and factual math.
I appreciate the relationship I have with the dealers I visit. I understand the op but will add from my experience often times once I add shipping and PayPal fees I’m very close to paying what my dealer will discount the product new for. Contuzzi said dealers have floor models available for home demo and I’ve found that to be, in fact if I’m out of my comfort zone on a product I want I can usually buy the floor model at discount. Most manufacturers have a dealer locater that we can order products from if there’s none local and that would keep the dealers in the loop.
There ARE companies that are cheaper being started without needing a dealer/distributor network. PS Audio is not one. They have no showroom, just listening rooms featuring speakers not for sale. Yet. If you wait for Black Friday or a show sale you can send them some junk (for trade in) and get 40% off. They still make a profit. I've bought more HiFi stuff at a discount on line in the past 3 years. than when I started in the 80's, primarily from 2 dealers then. One of whom is still operating physical sales successfully. The other went back to masonry to feed his family.
jaytor -- I recently retired to a small town in Hawaii where high end retailers are few and far between, but I lived in L.A. for most of my life and for much of that life I've been an audio enthusiast.
In those days I always put my money down at brick-and-mortar stores. It was truly seldom that I resorted to mail order. It's just an incredible luxury to go to a quality retail outlet and have them put on a demo for you, letting you bring some of your own stuff for a good old taste test. I want to see the merchandise IRL and flip switches. It's only when the stuff is up to snuff that you take it home for the night. Plus, I just hate waiting for a delivery guy to show up. Even worse is waiting in an endless line at the post office/whatever to do the return.
As an aside, I gotta tell you, too, that, like several other posters on this site, I'm a ready-to-be-committed bicycle enthusiast. And, when it comes to bicycles my brick-and-mortar predilection is even more extreme. I've bought high-end bicycles from Bicycle John's in Burbank, I. Martin Imports in West Hollywood, and Velo Pasadena. I bought my current ride, a Campy Chorus Bianchi Infinito, at a place that was within walking distance of me for a while (I can't remember their name but they were in Sherman Oaks). The only high-end bicycle I ever bought sight unseen was a Rivendell Ramboulet...which turned out to be the one I liked the least and got rid of the most quickly. Beautiful to look at but a dead dog for actually tooling down the road. Now I'm happily downsized with just the Bianchi and a modestly built-up Tomac Buckshot.
Long story short: If I could still buy at a brick-and-mortar store I would, but that luxury is now in the past. I can say, though, that I've found a couple of dandy high-end bicycle shops in the vicinity and always do my best to patronize them. It did, though, take an agonizing amount of time for one of the bicycle stores to score me a fresh set of cleats for my Mavic pedals.
I guess I didn't do a very good job in my original post explaining what I was getting at. I have nothing against dealers. I have worked with a number of dealers over the years that I really liked and got a lot of value from.
My concern is that this kind of dealer is becoming the exception, and not the norm. And it's not the dealer's fault.
When I was starting as an audio enthusiast in the early 70's, the products I became familiar with, and ultimately purchased, were those offered by the few dealers I had access to. Yes, Stereophile and TAS introduced me to a few other brands, but it's nothing like it is today.
The wealth of information available on the internet results in consumers (myself included) that are often looking at a much broader range of products and brands than any one dealer can carry (or even all dealers in a small city), particularly in the mid to upper end of the market. Closing the deal on a purchase for a dealer becomes much less likely. This, combined with rising operating costs, makes it more difficult for the traditional dealer model to survive, or at least to provide the service I'd like to see.
I'm not rooting for dealers to fail - quite the opposite. But I'd like to have the opportunity to hear products in a well designed listening environment and most of the dealers in my area, for one reason or another, don't seem to have been able to pull this off, and many of the products I'd like to hear aren't available for demonstration near me.
I've been thinking a lot about these issues since December, when my go-to store for over thirty-five years closed. Let me say that I completely understand those passionate folks who are "hobbyists," frequently buying/selling/trading equipment. For them, I think that buying online without a test drive makes sense; as long as they can be relatively confident of the resale value, it sounds like great fun to bring things into your listening space for a month or two, get the feel of it. That's not me, at least not yet; when I buy a pair of speakers or an amplifier, I'm in it for the long haul.
And I would never spend $5k-$10k on a pair of speakers that I hadn't auditioned. Honestly, that seems nuts to me. Research can get me close but there are so many subtle differences even from the same company that it's impossible to simply read/research and know. Take, for example, the many threads that compare Harbeth to Spendors, or that compare speakers within the Harbeth line.
Of course it's possible to spend five figures online on a set of speakers and love them. Most speakers at that price point should sound pretty darn good. But you'll never really know how much of your pleasure is simply your desire to like something you have put your heart and faith into, and there's no way to know how those speakers might compare to the other speakers you didn't buy--unless you want to spend months buying/returning. How many speakers, just within the Harbeth line (for example), can you listen to that way? And what about speakers that weigh 75lbs or more--not so easy to set up and ship back. I'm not knocking anyone who buys online; I just don't think it's as good as being able to go to a store and listen.
(The argument that we save money online is questionable. Sometimes yes, sometimes no--but the real issue is whether online sales help or hurt the audiophile market. Most mid to high end equipment that is currently sold both online and in person costs roughly the same. It may be that a company that is only online can sell their stuff for less without the dealer mark-up, but that's speculation. To use the big example out here, do we really know what Tekton speakers would cost from a dealer? And dealers provide a service, so it's reasonable to pay for that. I've found many dealers are ready to discount, especially with established customers.)
I didn't take the OP's post to be aggressive. I thought he was simply asking, as he did in his recent post: what is the alternative to BOTH online sales and brick and mortar stores? That's a good question. Audio shows are part of an answer. I auditioned a pair of high-end speakers through a dealer who had everything set up at his house. There wasn't as much selection, of course, but there also wasn't any rush. I made an appointment and we spent a few hours, talking about room treatments as well as speakers and music. Maybe we get used to having 5-10 stores, located mostly in big cities, and they carry a wider variety. I know that manufacturers might not want their speakers competing with lots of other brands, but it might help us. Imagine being able to compare Harbeth, Spendors, KEF, Wilson Benesch, B&W ... all at once?
I love reading and researching, and I appreciate being able to buy online. I bought my DAC, streamer, and cables that way. And no doubt it's easy to buy really good speakers online. Finding that "magic," finding the sound that makes *your* ears happy, though, requires a lot of listening, and no amount of research can do that for you.
I think that Jaytor did a great job of explaining himself and the realities of the market.
I think the next combative post down from the Op, was just..welll....
The customers and the world economic scenarios is what is killing retail. the world generally speaking, has no more room for retail.
The previously expansive middle of the world has been eaten up by the excessive number of humans who seem to each want to individually own the entire world.
It’s difficult to avoid as that is part of the basic design spec for a human being. We can’t all individually be ’king of the world’, but we all do something in that direction, in each and every breath as this is part of the basic underlying animal carrier specification.
It’s a bit of this, a bit of that and most definitely a bit of the aforementioned ’feverish lemming to the cliff’ running that has takes us to where we are right now.
the audio retail market condition is just one of the multitudes of canaries in the coal mine, for those who have the eyes to see it for what it is.
And thus chose a direction that includes survival. Which is no retail, no brick and mortar.
As the majority lemming customs are, overall, making it so. They are doing as they are being squeezed. And are involved in the creation of the squeeze, even though some will deny culpability, etc.
Of course, this only like, a hundredth of what I'd like to say, so please, no one take my incomplete remarks out context by adding one's own context...and attack me with such. Thanks....
Contuzzi, you obviously do not own a business. If you did then you would understand better about the things that affect overhead. Yes having speakers to let you go home with to try out does cost money. They’re not sending their display room models, or they can’t demo them to a customer in the store. Also, I’m sure that for higher end speakers, the dealer would bring and set them up, there’s labor costs involved that they have to eat, whether or not you purchase. I think jays post was right on the mark, and wasn’t trying to be negative in any way, just shining light in the current state of affairs. I know see real of my local dealers very well, and owning a different kind of business myself, we talk about the issues involved, as running a brick and mortar store of any kind can be a challenge these days. We all find that most consumers are not aware of the costs involved, nor do many care. We consumers tend to want the best deal, while expecting a high level of service. And we want it now! Lol. It’s just part of the modern world, and we each have to find our niche in order to survive, and thrive. Peoples buying habits have changed over the years, so old ways of doing things don’t work the same, and therefore my industry, and others like to audio industry have lost a lot of independents who just were not able to find their niche. The types of products I carry today is wildly different than when I started, and so is the customer that I’m catering to. The same can be said of audio stores. It can be hard to market to a younger audience who has many distractions, and high end audio doesn’t have the sex appeal to them that other toys might. The market for us older customers grows limited with time, and if they hang their future on that, eventually it won’t last.
These problems have always been there. Even back before the internet Stereophile let people know about stuff they'd never find in driving distance. So your choice is be limited by what's nearby, or take a chance on the Stereophile reviewer and try and have it shipped. I tried both back then, usually trying everything local first.
All during those same early years I was friends with a really good dealer. By really good he had heard an amazing amount of gear and was honest and straightforward about how things sound. I personally compared enough stuff over the years to know he was right. As a result all during those years I bought everything from him, unless he didn't carry it. He had no analog, for example. So because of analog, from back in the 90's I had to learn how to read reviews.
There's your story. If you are a geed dealer like Stewart then you can earn the business of good audiophiles like me. At the rate good audiophiles like me buy gear you probably only need a couple thousand of us to survive. Good audiophiles like me are one in a hundred. Audiophiles of any stripe are also about one in a hundred. Run the numbers. Now you know why all the successful high end audio stores are in huge cities. Even then its not easy.
It can however be done. I got my glasses last year from a private owner shop, and it was the most I ever spent on glasses, but also the happiest they ever made me. There's a Costco and half a dozen LensCrafter type places all within 10 miles. There's the internet- send your Rx they send your glasses. This guy thrives by being unbelievably excellent. He's a bona fide optometrist who gave me the best most informative exam I ever had, surrounded by staff that personally helps you select quality frames that look good on you. I was blown away.
That's what you have to do to be a successful high end audio retailer these days. You can't compete on price so don't even try. You can compete on excellence. It just ain't easy. Because still, 1% of 1%.
That's why I think we can expect to see more and more people doing like Tekton and Raven and going direct.
While I can't think of an alternative for the moment, I do believe that going to a brick and mortar shop, listening to a product you like, and then go home and order same product on line for 2 to 3 percent cheaper is immoral and just plain wrong. It's nothing short of stealing from the brick and mortar shop. IMO.
@mr_m - Yes, I agree. I don't even think it is fair to the dealer (whether brick and mortar or ecomm) to take (or purchase) 2, 3 or more products home knowing ahead of time that you're going to return one or more. I won't ask for a home demo unless I am fairly confident that I'm going to keep it.
I can't say I haven't made mistakes. There have been a few products over the years that I ended up selling after 6 or 12 months, but I've taken the cost hit for that myself. Having had my own businesses for most of my career, I know how hard it is to make a profit, particularly for small businesses.
This may not be the most cost effective way to build a system, but I do as much research as I can upfront (often relying on forums like this) and try to listen at shows and fellow audiophiles' systems before wasting the dealer's time and money.
I do understand that many people don't have the financial resources to be able to afford to make purchasing mistakes, but they need to keep in mind that the money they are "saving" is essentially coming out of the dealer's pocket.
If we want brick-and-mortar dealers to survive (and specialty e-comm dealers for that matter), we have to realize they have to be able to make a profit.
Sure glad car dealerships don't have your guys attitude. You want a test drive? Are you gonna buy? No? Just compare? Then you're stealing from me.
Sorry. No.
Its one of the great things about having your own business, maybe the only great thing about it, being able to do business however you want. Not that any of the choices are easy. You have a liberal audition policy you waste a lot of time, waste a lot of sales from gear not on the floor, lose a lot of money from damage. All on the gamble the small minority who actually listen will agree you carry good gear and maybe become a regular. Slim odds. So you have a tight trial policy, or no returns, you have to pose as some kind of guru audio authority and try and cultivate a clientele of people with more money than brains.
There's a ton of those around so no wonder things are the way they are.
@jaytor wrote: "I’d like to have the opportunity to hear products in a well designed listening environment and most of the dealers in my area, for one reason or another, don’t seem to have been able to pull this off, and many of the products I’d like to hear aren’t available for demonstration near me.
"So what are the alternatives?"
One possible alternative might be, for manufacturers to streamline "audition in your own home".
There are obviously a lot of details to be worked out in finding the "sweet spot" where this is attractive to both customer and manufacturer. For instance, how are the shipping costs distributed, and how are the risks borne?
Jaytor, you are arguably in a unique position - you can see clearly from the perspective of the customer, as well as from the perspective of the businessman. Do you think "audition in your own home" could realistically be viable from both perspectives?
@millercarbon - If you are legitimately in the market to buy a new car and have narrowed your choice down to a few models that will satisfy your budget, needs and desires, then, no, I don't think you're stealing from the dealer. Doing a test drive is a legitimate and necessary part of purchasing a new car.
On the other hand, if you are taking up the dealers time and wear-and-tear on their demo fleet to satisfy your urge to try a new model you read about in Road and Track and have no intention of buying, then yes I do consider this stealing from the dealer.
I'm not saying that visiting a dealer to audition products, or even taking them home for a more thorough audition should be completely avoided. If you're serious about purchasing, this is a great way to confirm your choice.
All I'm saying is that consumers should recognize that this is not free for the dealer. Having a good dealer that provides great service and carries products you are interested in should be considered a partnership.
@audiokinesis - I think home audition can be a reasonable approach if the shipping costs are a fairly small part of the cost of the product, the risk of shipping damage is low, and the consumer is willing to accept at least some of the cost associated with a home trial. This is certainly a reasonable approach for products like cables, and lighter weight non-delicate source components.
This isn't really practical for hundred pound speakers though.
In the past, I've enjoyed going to audiophile shows to hear a variety of products, but these seem to be getting more and more expensive unless you happen to live locally. I think more local audio shows would certainly help, particular if venues could be found that didn't gouge the vendor or consumer.
I also think supporting good local dealers - particularly those that are able to effectively demonstrate good quality equipment - is part of the solution. I'm just not sure how long such dealers are going to exist except perhaps in larger, more affluent cities.
Interesting post. I spoke about this with VPI a number of months ago and his advise to me was to sell direct for various reasons. I have always told my partner that we had to build something that when it was listened to, there was no doubt that our product was superior within the first 30 seconds (or around there). We feel that if a consumer has to go back and forth to hear a difference, then that consumer should just keep what they have. Our philosophy is an experience never heard before. That being said, the alternative is in home trial periods (hard to do with speakers), people who have purchased your product have agreed to let others hear their systems, or audio clubs. Fortunately for me, there are plenty of clubs in the NYC area. Some of those members have been kind enough to lend their equipment out to others. There were also many in-home dealerships a number of years back but I don't see them that often any longer.
Maybe a paly to hear something would be in the future almost like a short term lease.
I agree with your observation that "home audition can be a reasonable approach if the shipping costs are a fairly small part of the cost of the product..."
Pure Audio Project has an interesting approach to lessening the sting for customers. If I understand correctly, they take a deposit and ship speakers for audition at their cost, then charge a flat rate of $200 for return shipping if the customer doesn’t buy them, and return the deposit (assuming the conditions are met). I presume that the cost of all that shipping makes its way into the purchase price, but from the perspective of the customer, $200 out-of-pocket risked in exchange for two weeks in-home audition of a five-to-ten-grand ballpark pair of speakers may be pretty good deal.
I still am amazed by how very little marketing is done in the industry. When is the last time you viewed a TV ad for speakers, components? Then everyone complains about how poor business is. I am also amazed by how very few households have a pair of speakers sitting in a living room or family room. A realtor has been sending me hundreds of listings of homes for sale in our area for the past 3 years and I have yet to see a pair of speakers in any of their rooms. This said, who buys them? I see entertainment furniture with a wide TV screen with no speakers to view movies or TV. You kidding me? People are satisfied with listening to the speakers on the TV. I would say sound when watching a movie is about 70% of the experience.
If manufactures advertised, this industry could be flourishing, as people will spend money on entertainment especially now during a COVID. This industry needs to spend money to make money. What if this industry as a result grew by 50%?
Based on the listings sent to me, does this mean audiophiles represent less than 1% of the population? If consumers would only know what they are missing.
I can only speak for The Greater Boston Area. I've been out of the scene for about 25 years, and as start to look around again, I'm shocked at the hollowed-out shell of what's left of the industry. First of all, there were a tremendous number of manufacturers right in the area - I used to work for one of them.
Then, there were lots of mid-fi to higher end places you could go to learn about and buy equipment. I'm sure I'll miss some, but stores like Lechmere, Highland, Tech Hi-Fi, Nantucket Sound, Cookin', Fred Locke, and countless other stores were available addressing the different level of buyer. Right now, I have the choice to go to Best Buy - many of which do not have a Magnolia inside, or one of the few high end dealers that hang there hat on integration, installation, and security systems. As a result, they have very little product in stock for you to listen to. They want to make the recommendations and order what they sell you.
As far as walking into a place, auditioning components and making a same day purchase, I'm stuck with Best Buy and the salespeople there might be working in the white goods department and be wandering about in audio video. They are of almost no help. And the listening areas are generally a horror. The stores that have Magnolia showrooms inside are better. But the salespeople know even less than I do and I haven't shopped for (as a consumer) or written about (as my job) an A/V component since 1997 or so. It's discouraging.
Next year I'm planning to purchase a system that will serve 50/50 audio and home theater duties. I suspect I'm going to have to go the direct route. It's a little disturbing to fork over thousands of dollars for speakers that I've never heard. I'm thinking about building a system around Tekton speakers. As nice as having an in-home review period is, I'm 55, and I need to be unpacking and repacking 100# speakers like I need to start smoking again...
@audiokinesis - I think PAP has a slight advantage in that it requires the consumer to put in a fair amount of their own effort to put the speakers together, and the speakers themselves require a larger than average listening environment, so customers that order these speakers are more likely fairly confident that they will want to keep them.
PAP also probably has lower shipping costs than more conventional speakers of similar size since they are shipped in pieces, and don't have a huge, heavy enclosure (although it's not exactly light).
But I agree, it is an interesting approach.
@larry5729 - I completely agree that consumers are missing out. But I don't think TV advertising is a cost effective solution for manufacturers. As you pointed out, only a very small percentage of homes have even a mid-fi sound system these days. Unless you are appealing to a significant percentage of the viewing audience (with the possible exception of extremely high margin pharmaceuticals), TV advertising just isn't viable.
I did a TV ad for my bike shop for the local audience and ran it during the Tour de France TV coverage on Comcast. This might have been worth doing once since I was trying to raise awareness for a relatively new shop and the Tour de France was a very focused audience, and since it was such a niche audience, ad rates were relatively low. I also had internal staff that created the content. Even so, I couldn't justify doing this twice given the return.
It might be worth it for a large store in a metro area to run a TV commercial, but probably only if they were also advertising more mainstream products (large-screen TVs) and got some financial support from their vendors. I have seen this type of commercial occasionally in my area, and particularly radio ads.
For manufacturers, getting articles in general magazines that are typically read by more affluent readers (Forbes, New Yorker, Architecture Digest, Conde Nast, inflight airline magazines, etc.) probably makes more sense, and I have seen these every once in a while.
It's challenging when you have a fairly niche market. I don't think most consumers have the buying power they once did, and personal music players (ipods, smart phones) have really taken over as the primary mode in which people listen to music (sadly).
Even friends that are blown away after listening to my 2-channel system or watching a movie on my home theater would still not consider making the investment in a decent system. It's just not a priority for most people any longer.
@spacecadet65 - I used to live in the Boston area (Carlisle) and shopped at Goodwin's (when they were in Harvard square before their fire, and then in Alan's apartment - I moved out of the area before he opened his new store in Waltham) and at Natural Sound in Natack. Are these shops still around? Are they some of the shops that are now focused on home installs?
Larry, as others mentioned, the cost of tv exposure is far too high, and with the advent of the internet, Netflix, etc, it’s so scattered that unless you’re marketing a large already well known brand ( meaning much larger than the audiophile market) or a very well funded startup spending huge to capture a market, it’s not going to happen. Just advertising something doesn’t create a demand. That might help you take market share from other competitors, but unless you have something new, unique, highly desirable, you need to figure a new approach to create new interest. Not get your name in front of someone already in the marketplace, as that doesn’t grow the market, though it’s possible to grow your brand like that. I imagine the best chance for that is home theater, and two channel is a smaller market with less interest generated over what they’re listening to from their phones and headphones.
As a manufacturer, importer and retailer who is focused on-line (though I do have multiple products I can't list on-line) this is an interesting thread.
Finding the right solution is extremely difficult. One idea I have had is that I am considering putting together "tester" products that are in mediocre aesthetic condition, are used, etc... and let customers "borrow them" via fat Llama. The "fee" for borrowing is the return shipping.
If you buy a new product I would wave the fee. You have no choice about color or finish, etc... but you get to hear the product. Fat Llama is essential to protect the retailer from having the product stolen.
Still doesn't solve the problem for very large speakers or massive amplifiers which need to be shipped LTL freight where return shipping would be $1000 but it is an interesting idea for smaller, lighter products.
@verdantaudio - this is an interesting idea that I think could certainly work for lighter items.
Another idea I was thinking about was for manufacturers to have "brand ambassadors" in different areas of the country. The manufacturer could offer a discounted price to customers that were willing to demonstrate their product to interested parties in their homes (post COVID). Most of us love to show off our systems anyway and enjoying meeting/talking to other audiophiles.
I like the idea of product ambassadors. I used to live in metro Boston and there were a few shops where you could demo and borrow gear which was great. Now that I have moved north a couple of states I no longer have that opportunity and I do miss it. So making gear purchases all too often is a roll of the dice no matter how much online research you do. What I like a system to sound like might have someone else looking for the nearest exit.
And throw Covid 19 on top of all this, which equals good dealers going out of business for good......
No doubt, , Hifi dealers?? where? maybe Chicago, NYC, LA, Denver,, cities with pops of more than 5 M,, Houston.. But here in New Orleans, ziltch. There are onlya few hifi buffs left in this city,,and we are getting up in age. Its a dying hobby, as we've all known past,,ohh 10 years or so. A hifi retail store would really only bea good place to actually hear a certain speaker,,and then,, yep, head on over to the 3 main places for used audio gear,,and take your picks and makes some offers,, You can see listings running into days/weeks/months on nearly all components, That said, some gear sells fast, I picked up a Jadis DPL in less than 24 hrs after listed. I typed in jadis every day and GOT IT, a preamp i needed badly. As for speakers,, most are too heavy to ship,,at least economically, *impossible* to return., Unless you have $$$$ to return ship, and which seller will accep ta return on a large speaker?? Times will be tough ahead for any speaker lab/dealer/reseller. This is a post CV19 era, where things are all topsy turvey. Buying new speakers, ?? when the market is full of used offerings at steep discounts. Amps/preamps, have some market value, however higher up price scale, slower will be the sale. Every now and then we see a **newbie** introducing his questions,,,,,not enough entrants into this hooby to keep all labs afloat over comming decades. Its all about survival for some of us, hifi budgets will be the 1st to be cut.
Still doesn't solve the problem for very large speakers or massive amplifiers which need to be shipped LTL freight where return shipping would be $1000 but it is an interesting idea for smaller, lighter products.
Yeah my speakers are @ 60 lbs, Very close to my limit to handle/or ever acre to move, I have zero interest in any speaker more than say 90 lbs. MAX, so 60-90, should be speaker size, Labs making over 90 lbs,, will not survive. Speakers costing more than say,,,ohh $3K/pair, is pretty much max for this post CV19 economy. , I could never fork out more than $3K for a speaker. At $3K, I would expect Beryllium tweets, if not Diamond Tweets from Seas at $7K a pair..,,,hummm wait something is wrong,, $3K , tweets Diamond @ .$7K pair,,, well no I should not expect a $3K speaker to include the SEAS Diamond tweeter at $7K a pair,, tahts ridiculous. Point is, labs have to consider scaling down, both in size and price. ~~Big~~ (size/price) is Dinosaurish. My MTM speakers are big on sound, , I never fell for that gimmick ~~Bigger The Better~~
back in 1974, a friend and i would compare the gigantic macintosh vs the Electro Voice A1's with a back firing voice coil woofer,+ woofer + mid tweet in front,, We perfered the A1's over the Macintosh which boasted 15+ drivers in each cabinet. Sure the Macintosh produced more db level, yet the A1's had a greater finesse for music. The Mcintosh you needed a fork life to move,, The A1's, a cinch. If I may, throw a tomato at this point,, in this experience ,,, I find the Wilson line, ~over bloated, over hyped~For which reason they sit,,and sit,,and never move,,not not in a living room,,I am speaking on the used,,and UNWANTED market places...lol Wilson used, shipping,,pick up ONLY or shipping $1K+ Ridiculous.
We had some of our products in several B&M dealers around the country in the past. We had some strong sales from a few of them and lost money from a couple of them. I can tell you that the manufacture's side of dealing with dealers can be just as interesting as the consumer's side of dealing with dealers. Most are gone now. We also had a few "brand ambassadors" (AKA home dealers) in the past. My experience is that single product
home dealers
rarely work out. In the beginning there is enthusiasm and the the lure of the dig discount. Then nothing.
That said, I wish there still was a strong dealer network. I would rather adjust our price structure and let sales professionals do what they do best, sell. Just before COVID we were considering perusing a select few dealers. Selling larger speakers without exposure (places to audition) is difficult. We have shipped large speakers for in-home auditions. It's expensive for the interested party and expensive for us. We discourage it but are willing participate if all aspects are clearly understood and agreed upon.
What we do encourage is that interested people come to our showroom and audition our speakers in our relaxed, comfortable setting. The audition can span over a couple of days if requested. They can sample as many model as they want and with several different amplifiers. We even encourage people to bring their amps if they are married to them and they are compatible. If the interested person buys our speaker, we then reimburse them for all their travelling expenses (not first class flights) and lodging expenses. We have had reasonable success using this model. We are preparing an in-home trial program for our Iris monitors since they can be shipped. We realize that being flexible with our sales model is important.
@arion - Mike, I think offering showroom auditions is a viable strategy for manufacturers that are producing fairly high-end speakers. I'm not sure how effective that could be for less expensive products (let's say under $10K), at least as the only option. But I like your concept. We have done something similar in the past with higher-end bicycles when we had a fancy fit system and professional fitter on staff.
I understand your perspective on brand ambassadors. If the only reason people are signing up is to get a discount, that's not going to be very effective for the manufacturer. Perhaps some other kinds of perks (not sure what that would be) or a small commission.
I've had several local audiophiles that were interested in my speakers over for auditions just because I wanted to support the brand - not for any compensation. But I'm not sure how common that is.
I expect the more expensive the product is, the less effective a brand ambassador program is going to be. The owners are probably less motivated by any kind of financial benefit and may value their privacy too much to open up their home to strangers.
It is human nature to: 1) be resistant to change and 2) to procrastinate about dealing with change until the last possible moment. So, good night and good luck when it comes to that hurdle.
However, I agree that more audio shows are needed; and, perhaps they can find a way to better promote the brick and mortar stores within that region. As a consumer, it would be nice to be able to drive to an audio show for a weekend, rather than flying into Chicago, Denver, LA, Los Vegas, New York City, Washington DC, etc. I used to attend a yearly industry convention because I have to obtain CE credits for my job. The convention would be held in many of the same convention oriented cities that are noted above. Such a trip would cost me around $1K, not to mention wasting vacation days. Once I discovered that local vendors were offering free CE classes, I stopped attending those conventions.
If I owned a brick and mortar audio store, I know that I would want to carry a mixture of products that I was "evangelical" about its performance, as well as "practical" about the ability to sell larger quantities of product at hopefully a higher profit margin. Perhaps manufacturers can offer better pricing for their "dedicated" dealers, while at the same time not demanding exclusivity. In a perfect world it would be nice to walk into any audio dealer and order a product by any manufacturer, even if it involved an additional markup for a "special order." And, if brick and mortar retailers could somehow have a small room of used audio to demo, perhaps they could entice more budget minded novices to get started into our great hobby!
Audio shows for sure,,, The only way labs will reamin open over comming years if via audio shows. Every major city. 2X's a year. Along with these shows , labs will need to supply pre buyers with local techs who will service that component. A good tech is dif to come by, repairs in a timely , reasonable cost. I called Brooks Jadis shop in Los Angeles , he suggests I ship the Defy7 for a ck up,, = ship fees each way =$$$ Ridiculous. batron Rouge tech, not convenient, too slow on repairs, weeks on end. Thankfully i found a exp tech here in new orleans, by a stroke of luck.
The ambassador idea is interesting and lots of times, if you have a customer geographically close to someone who wants a demo, they will consider it.
The other thing that is interesting is the idea of having more robust, regional, audiophile clubs. I had a local audiophile club reach out to see if I wanted to demo equipment during a meeting. The answer was YES!!!!!! When can I show up?
To me, that is a really fascinating approach because you get a group of people together that know what they are listening too and at minimum, can have a positive experience. It works well for retailers and for small manufacturers like me but I am limited to the Northeast. Big manufacturers will never turn out.
The problem is regional leadership. How to you join? Is it just a local meetup? Where/who does the hosting? etc... All very difficult.
Shows are great but those are very specific parameters in terms of room, size etc... Most exhibitors have a carefully curated list of songs that sound great on their system and it will take a crowbar to get them to deviate. I take requests at shows and will schedule after hour demo times but again, not everyone is into that.
It is a challenge and COVID 19 just makes it worse.
Some of us live hours from any commercial airport and even further from a major city that would have high end dealerships at which to audition an array of competitive product lines. We have to either devote a huge amount of time and resources to search out products we are interested, including traveling great distances to see and hear them (with no A/B comparison available) or rely upon reviews and opinions on forums and in the print media, and on "mail order". This is just a reality for those in the rural regions. I have been fortunate enough in trying to use good judgment and buying decent quality components and speakers this way (without hearing them first). Could I have done better at the same price point? Maybe. I'll never really know. But that's the price of a having what I believe is a better quality of life than living in a more urban setting. I love listening to music but I love the sights, sounds and experience of nature even more, so I choose this over the convenience of better access to B&M dealerships. I think as our population de-urbanizes even more in the future there will be less and less opportunity for the B&M model to compete successfully. It is a matter of logistics as much as profit margin.
There have been many good points made here. One of them is that a marketing model for larger more expensive gear can be very different than one for lower priced easily shipped gear. One major element has not been mentioned, the high cost of advertisement and marketing. It's truly a challenge for a small audio company to continuously shell out the kind of money required for even minimum exposure.
Shows are a good place for product exposure. Try getting one of the few available decent size rooms, impossible and hugely expensive. It costs us about $10K per major show, exhibiting in one of the small rooms. The idea that smaller audio companies can travel around the country and exhibit in six to eight shows per years in just not practical or affordable for most, not to mention the major investment in the time it takes to prepare and execute. Don't get me wrong, I love doing shows and would exhibit in many of them but the returns aren't there and it's not practical. Covid-19 has made a mess of this option.
Local audio clubs and home dealers can be a supplement for small manufactures. Typically the areas get saturated quickly especially in less populated regions.
Our new approach is to use multiple avenues. We have speaker models that are easy to ship through FedEx or UPS and are expanding on them. We will also try to have listening stations (non-selling dealer or home dealers). Our goal is to make available: in-home auditions, local auditions at audition only dealers and auditions at our showroom. Covid-19 makes auditioning a challenge.
The current pandemic situation has to be particularly challenging for manufacturers that rely on being able to demonstrate products, and for retailers in the same situation. This is certainly likely to accelerate the demise of many brick-and-mortar audio stores, making it even harder to audition high(er)-end audio products.
When I started this thread, I was assuming we'd get past Covid-19 sometime in the next 6 to 12 months, and I was really wondering about our options when it's safer to start socially interacting and travelling again.
I don't really understand the thinking of hotel managers that are charging ridiculous amounts to host audio shows. Yeah, they have to move some furniture around, but it has the potential to fill every room for several days over a weekend - let alone fill the restaurants and bars after hours.
I used to attend CES every year in the late 90's, and really enjoyed spending a day at Alexis Park where all the high-end manufacturers were exhibiting, but my employer at the time was covering the tab. I was thinking of attending Axpona or Rocky Mountain this year (pre Covid), but the rates the host hotels were charging were insane. I can't imagine how much they are charging for demo rooms.
Perhaps hotels will be a bit hungrier for this business post-Covid and will be more reasonable.
I like the idea of local audio clubs hosting vendors. Our local club has done this on occasion, but generally for tech talks - not demonstrations. Finding a suitable venue for an audio demo can be challenging - particularly one that is large enough to handle more than a small number of listeners.
@jayton wrote: "I like the idea of local audio clubs hosting vendors."
I think that would be great fun for the audio club members, but not a viable sales model. They would love to have you come and show off your stuff and listen to them talk about their stuff.
Audio clubs tend to have a group-think thing going on, which is dominated by the alphas in the club. And the alphas will see a manufacturer showing up and professing expertise as an outsider directly challenging their status. So the alphas have an incentive to find fault with what you are doing.
I couldn't agree with you more. In the old days I worked for a company that sold systems starting at $399 for speakers, turntable cartridge, and receiver. To be a dealer today you need to stock $120,000 speakers, 50K amps.....
It depends on how much business we sell in each state. There is a threshold where you have to pay sales tax when you cross a certain limit. Thus, the smaller the retailer, the more likely you are to get away without paying sales tax.
With the exception of OK and PA ($10K is threshold), you have to sell more than $100K in a state to have to pay sales tax in it. There are a few that are higher.
This means there is no chance that large entities like Amazon have a hope of not paying taxes AND since they operate a marketplace, they also collect tax on third party sales as many states require this.
For me, one of the saddest consequences of audio shops going out of business is that potential new audiophiles might never discover how wonderful a good sound system can be. I became interested in higher end audio products in college (late 1980's). There was an audio store in downtown Davis, CA, and I wandered in out of curiosity. I had always liked listening to music and had a very basic set up at home. Once I heard music played on the system in the shop's main listening area, I was hooked. Without that experience, I might never have discovered high end audio.
Interesting thread......As an audio retailer, I can perhaps provide a little insight as well.
It's for sure sad to see quite a few dealers leaving the market. Home based dealers (like myself) are becoming a more popular option that allows less overhead. I'm coming up on 12 years in business and oddly enough, this year will end up being one of the better years I've had. (though it's been a VERY strange year indeed)
Being a dealer in current times comes down to been extremely careful (picky) in brand selection and total dollar level of demo gear. It's a very fine balancing line that takes quite a bit of time and effort to figure out. I'll be the first to admit that I do not always have every piece of gear my customers want to hear/demo, but I do certainly try to have the more popular options on hand.
Your larger dealers that have been able to hold on, now seem to switching gears to web based sells. I can see this being somewhat successful, but at the same time in the long run, may be detrimental due large numbers of customer trials and returns. Sort of a toss up at this point.
Very interesting thread. Regrettably, I have another mundane question:
So, if Amazon offers an item from a third party seller, then what address/state is used to calculate sales tax? Purchaser or seller's. And it almost sounded like BOTH Amazon and the seller charge sales tax for a transaction? Thanks again
The marketplace (Amazon, eBay, etc...) charges tax based on where the item is purchase, the purchasers zip code. Tax is collected and paid by the marketplace, not by the seller.
When I sell something on eBay, Sales Tax is collected and paid by eBay and I never see it. I do not collect or pay sales tax in that scenario.
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