I enjoy conversations like this because they're real and they're raw. So I am going to keep it going with my experiences.
I work in the industry not as a retailer or wholesaler but in the marketing and PR area. I also buy, sell, collect and flip. I like to make a little when I can to support my audio hobby, but that doesn't happen really often. For the most part like anyone else I just want to resell my equipment and get as much as possible. That's not always possible.
I'll start with the manufacturers who are always increasing the price of this gear. To be honest, a lot of it is probably not worth what they're asking for it. We all know there's a lot of stuff coming out of China that can produce the same quality of audio for a fraction of the cost. Doesn't have the brand name recognition and we could debate a lot of other reasons why it is not on the same level. But let's face it - they're able to produce some really quality products for a fraction of the price. Some of these audio manufacturers are just pure greedy. There is no reason why some of the equipment is priced like it is. I know for a fact these guys will give up to 60% off of their equipment in certain situations. Really if they're making 40% off of it, they're still making a profit. That means there's a lot of wiggle room in this stuff.
Dealers are trying to make a living like they used to but in this day and age it's getting harder because of the internet and fierce competition. There was a day when you couldn't buy a brand unless you bought it through a dealer and that dealer could pretty well charge whatever he thought he could get away with. That has changed. Now these dealers are being controlled by the manufacturers and having to sell at a certain price with not much wiggle room. They give them a little room to play but you don't see that advertised on the internet. This inflates the prices to stupid levels.
People honestly have a hard time keeping up with the economy and all the costs in life, and trying to justify high-end audio purchases is really last on their priority list. They are starting to rethink their purchase of the high end. There is a certain part of the market, that 1% who have that money and will always have that money and are always going to spend it. These should not be thought of as part of the industry because they are a dying dinosaur. Basically, all the people in this group are for the most part part of that dying dinosaur group that spends too much on audio and has given it a lot of its disposable income.
The secondary market is strange no doubt. I think if you are able to sell something between 50 and 60% of its MSRP, you're pretty lucky and you should just take that money and be happy you're able to do that. This is still some really expensive equipment and it's a lot of money for a lot of people. I don't care what anybody paid for it. It's what people can afford. It's only worth what someone's willing to pay for it. I think a lot of the stagnation is that the higher end stuff guys are hoping to always get at least 50%. There are not enough people willing to pay 50% of very expensive equipment. That's why it sits around for a long time before it gets sold.
You have to wait on buyers these days. I have some equipment that I know is in great condition. I've only owned it for 3 months but I know if I want to sell it for top dollar, I'm going to sit on it for a while until I find the right buyer. It might even require me to not get top dollar. I think that's a lot of what's happening - people are just hoping to wait until they get that right buyer and it makes for a stagnant market.
On the other hand, I have some equipment that is priced 40% of MSRP and it's been sitting with me for almost a year with no bites or any action on it. I don't want to give it away because I'm taking a bath on this stuff. I bought it second hand and it's still not moving. I'm going to lose money. However, I have to realize that sometimes with some products you're just not going to make money and you need to cut your losses and move on to a different product. Sometimes it's a matter of just a couple hundred dollars. You need to come down to move something and sellers can be really firm about their selling prices. If you have a buyer who's interested, you need to work with them and sell to them (unless they're giving you rock bottom lowball). Usually people knocking on your door are serious and willing to buy. You can't wait around for other people to come because you may not see somebody for another 6 months.
A lot of people need to research before they put prices on their equipment. Go to hi-fi shark or eBay and you're able to see what the price paid was for the last 2 years on a piece of equipment. If you think you're going to get the highest price, you're probably going to end up sitting with this equipment for a long time. That lowest price is probably the new comp for what to sell it at, and buyers are smart. If you want to overprice your equipment go ahead but don't expect it to sell right away. I wish this wasn't the case but with some equipment there's too much of it on the market and if you don't make the price attractive it won't sell. Also, let's face it - some of the equipment we buy, it's not the greatest or it's not the most popular thing. You're going to have a hard time selling it no matter what.
Some guys were talking about some Bryston equipment. We all know that they make some decent equipment but they are not as popular as other brands, especially with a younger audience. Trying to sell that to them is not going to be easy. The market that maybe would be interested in it, which would be the older market, maybe they're going for something more expensive or something higher grade.
The secondary market is tough because a lot of the equipment can get just too expensive. It's for the one percenters of the hobby. Not many people can afford an amplifier that costs as much as a car. A DAC that costs as much as a year's worth of college. Cables that cost as much as a vacation. There's not enough people in this hobby to justify the prices any longer.
I got into this hobby 30 years ago and have enjoyed many different aspects of the audio hobby whether it be home theater, 2 channel or headphone systems. However, at every level there's going to be the high-end, the middle and the cheap. I think with the current economy those lines are getting blurred. People can't afford houses or their rent these days. Discretionary disposable income is becoming rare. People are getting tapped out from paying $10 for eggs and $40 for a decent meal or $20 bucks for burger fries and a drink at McDonald's. The cost of living is just stupid these days. It's not like it used to be.
The political climate is very weird and I think when it's weird like that people get nervous. I see people nervous on the stock market making knee-jerk reactions. People clinch their wallets when they see weird stuff going on as well. I think this is going to happen for a lot of hobbies - you're going to see people spending carefully. It's not a depression but people are looking sideways at a lot of stuff right now and probably will for the next 4 years as we have a person in power who is unpredictable and makes for an unpredictable economy.
I wish everyone could afford to pay what I want for my equipment but it's not going to happen. I know I'm probably going to end up selling my stuff for much less than I had hoped. That's part of the audio business in my mind. However, I also know there are about three or four purchases that I need to make and I'm going to be very careful how I spend that money also. I am not going to buy equipment that is overpriced just because. I'm planning my purchases and only going to purchase when something hits what I feel is the proper price range, which is probably 40 to 50% at most of retail. Some people probably won't even pay that but that's my number. Everyone has a different number, what you're comfortable with and what you feel is worth it for you. People just need to be a little bit more flexible and realize that when you buy this stuff getting your money back, you're in the wrong business. Same thing as collecting cars or putting money into cars. Rarely do you ever see that money come back. There are a few rare pieces that you make money on, but you pay a lot for those ones that you know make money. Everybody's a savvy buyer these days with the internet and we have to realize that.
Can manufacturers chop up to 60% off of the price of their equipment and still make money? You know that they're probably manufacturing this stuff at around 20% of the cost. That's a serious, healthy margin. Of course with boutique manufacturers it could be more, it could be less. Who knows.
Dealers, they get usually 35 to 45% off of the MSRP aka list price.
Some companies are very strict with their dealers on how they can sell in the secondary market and they keep the prices inflated. It's really weird, especially the newer stuff. They can control what it is sold for through dealers. For example, I knew a dealer was selling a piece of equipment just last few weeks. It was worth $30 to $35,000 and he put it up for sale on the secondary market for around $25k and got no bites. He reduced the price to around $19.5 and next thing you know he had guys willing to pay him right away. The manufacturer caught wind of this and they sent him an email and told him to remove it from the secondary market. They would find a buyer for him for 25k even though it would take longer and the check wouldn't come in the mail for a while. They did not want him selling below a certain price point.
Audio equipment is overpriced for what it really costs. People selling their equipment are just trying to recoup their prices. The market's only going to pay what it wants to pay. Is the market in a slowdown or is it just correcting itself? I think people are only willing to pay a certain amount and they let you know with their wallet when it's just too much. The market is going to correct itself to relate to the current climate. There are slow times of the year when people have more disposable income than others and sometimes that makes the industry seasonal. You also have years that are not as good as others. There's always tons of reasons for people to not buy and it's something you just got to judge. If you want top dollar, don't expect your stuff to fly off the shelves. If you're being more flexible with your prices and put it at the going selling rate then it will sell. Just be careful not to buy products that people are not buying often. If you're buying some rare amplifier or pair of speakers that are not common, there is not a huge market for it and it doesn't matter what your price is. You have to wait on a buyer.
I don't know if I've given any insight that anyone on here doesn't know, right? But I'm just sharing my thoughts and experiences and I hope maybe it helps somebody.
At the end of the day it's not about making money. It's about enjoying our hobby and if we want to upgrade to a new piece of equipment, it's funding that project. The dealers need to learn that they need to take it easy with what they charge people. I know many dealers who get rich off of the backs of their consumers to the point where it's greedy. The manufacturers are greedy. The secondary market is not greedy and people let you know when your price is too much with their wallets.
