Dealer Discount

As usual in these cases, "it depends." 

Funny example:  Door opens one Sat AM and in walks a stranger.  Tosses a business card on my desk as I am wishing him good morning.  Turns out he is the son of the "biggest business" in my state.  Wants to buy "speaker x" but, "never pays retail and no one who carries this item in FL will give him a break.  He called everywhere (and this was when long distance cost money)."  

To educate the uninitiated, back in those days (early 1970's) we had something called "fair trade."  This meant a company could pull their stuff from you if you sold for less than retail.  Long story, made lines valuable to the dealer as they were protected.

I told him no way, of course, and he was complaining that he had FLOWN HIS PLANE over from across the state and was not leaving until he got a deal.  Even back then, airplane gas was relatively expensive, but I chose not to point that out to him as I am sure the trip was charged to the company.

At the end of the day, the ticket was for full price for the speakers--about $400 each, I think, some AR something--average speaker for back then but had generated a lot of publicity, I think.  I sold him a pair of Stax headphones and something else, can't remember, at "cost" to make up for the non-discounted speakers.

There are ways, my friends,there are ways.  Another fact:  back then, the nut was 21% at my small shop.  SONY, bless their hearts, had between 19 and 21% in their products, so every SONY that went out the door, and a lot did, cost me money.  Don't be so fast to expect discounts.  Margins are probably not much better today than they were back then, so figure 20% above cost for anything you want should you wish the dealer to survive, and at least 25% above cost if you want him to make any money.

Relationships matter; form one and then work together over time and you will get what you need and both of you will be happy.

Cheers!

@pgaulke60

Glad to hear you agree.

@benjie Obviously your are being silly.

I think I covered all this in my post.  Dealers DO NOT have 50% in MOST items, and probably not in any unless they "fell off the truck."

I am amazed at the lack of business intelligence so far in this thread.  Several point out that stores actually cost money to open and run.  A typical high-end store in 1973 cost $100,000 to open and stock.  And that was when $100,000 was actually money, not lunch money for the 1%.

Where does that $$ come from?  The BANK.  They don't charge anything to borrow money, right?, so why should YOU have to pay full price?  Interest rates in 1973 were about 9%+, and MORE if you wanted to open a business.  I paid them, so I kinda know.

Go to business school before you walk in and demand a 40% discount.  If you did that in my shop, you would be standing by yourself as I would have laughed at you and walked away.

If you buy online, don't expect service, but you MAY get it.  If you buy brick and mortar, shop around and find a dealer you like and form a relationship.  For those who postulate relationships are useless, like to see you at the MB dealer walking in and demanding a huge discount.  You would be WALKING out soon.

GOOD businesses want to build a loyal customer base and will pretty much do whatever it takes to do so.  BUT, as Bon Qui Qui says, "Don't get crazy!"

Go to eat at Peter Luger's or Katz's and walk out if the wait staff doesn't kiss your butt.  You will go hungry, I promise.  Sure, these are classic places that promote their bad behavior as part of their "schtick."

YOUR bad behavior in my shop would have resulted in you leaving with nothing.  Happened a lot more than I thought, which is one reason I sold the shop.  I was there to HELP you find the best at your budget.  What YOU want for free meant nothing to me.  We "fired" customers every year at xmas--idiots who thought they were "entitled" to whatever because they--wait for it--were RICH!  (Gee, in Boca Raton a RICH person is so rare.  They might be driving a Boca Chevy (MB) or a Boca Ford (BMW).
WOW!  Impressive!

We simply called them and suggested they call Mr. X at another shop who could "better meet their needs."

Saved a LOT of my sanity and sometimes they would come back being more professional and appropriate in their behavior.  If not, we simply worked to attract more customers who wanted high-end audio products.  There were plenty of shops for medium and low-end stuff back then that took care of that market segment.  That is what we wanted, so that is the business plan we executed.

Your dealer may be a jerk.  I can't help that, but check out your own behavior as well.  Also, dealers hire people who may have a bad day--unfortunate, but it happens.  Ask to see the owner or another sales person.  After all, YOU may be the jerk in all this without realizing it.

Cheers!

@glupson2The harsh stuff you did not care for did not come until AFTER the business was up and running.

MY education, which my dad said I needed since he had been in retail all his life, was provided by customers I still don’t believe sometimes.

I was totally astounded by this behavior, and HAD to come up with ways to combat it. One day, a guy walked in, picked up an item from the shelf, and ran out. Good grief! I was so amazed I barely had the sense to call the police.

Another time, the locksmith next door who put new locks on my door for me hired a criminal from NJ to drive down and rob the shop. Cops stopped him at 3am driving a van full of my stuff cause in Boca in those days NO ONE drove around at 3am. I was lucky as they thought it was an inside job. Good news was I had not even had time to get insurance yet, so they realized what happened eventually, but I WAS THEIR PRIME SUSPECT!!

I was a kid trying to open a business with great intentions to bring wonderful music to as many people as I could. HAH! As my dear dad tried to explain to me, retail is a nutty business.

SO, the harsh stuff above was simply a necessary REACTION to the behavior I experienced from nutty customers.

That is why I sold the business--could not believe people were such dorks when all I wanted to do was HELP them. Naive? You betcha!

Went back to school, got a couple more degrees, and spent my career at a major computer company while the PC was being invented. Exciting times, and most customers were thrilled to see and use this new technology. Sure, there were nutty ones, but mostly it was a very professional environment that was what I THOUGHT I would have with the shop.

Live and learn, my friend, live and learn.

Cheers,

Richard

@glupson Thank you for your reply. If you walked in, and many did in those days as I was the only Audio Research/Magnepan/Nakamichi/Sequerra/Linn/B&O dealer around back then (Mc was handled by Jimmy Ryder of Ryder Truck fame if you remember them) down in Miami at HiFi Buys (no longer there).

If the item you wanted was NOT a fair trade item--remember those rules from my first post about this--I would have spoken to you about the rest of your system first. Remember, I was dumb/naive enough to believe that customers actually WANTED advice and counsel about their total system, and we would have discussed WHY you wanted that item. Once we had established some sort of dialogue, I might have sold you the item for a good price if I could. I did it sometimes, of course, but usually on a Marantz or Scott or Tandberg item--what we called semi-high-end back then, and they were.

If it happened to be an Audio Research item, probably not as they were in very short supply back then and the margins were not great. A popular pre-amp back then--SP3 and SP3-A1 were 595 then 695 then 795 all in the space of less than a year. What I MIGHT have done had you purchased the pre-amp and maybe another item is throw in the wood case, which was not cheap either. We paid about 70% for that brand once shipping was included.

Most manufacturers had a NET 10/15/30 price break on shipping, but some did not. Example: my highly-anticipated first D-150 (STILL one of the best amps ever made and I would buy one today if I needed it) came in DOA. It happens. Cost me 130 to send it back and they would not pay. How does a dealer combat that? You lose money.

Plus, back then, Audio Research wanted copies of the sales tickets and sometimes called the buyer--Mr. Johnson himself did sometimes, I was told--and the price paid was discussed. SO, some brands, yes, and some brands, probably not and definitely NO if it was a fair trade item like AR and B&O and SONY and so many others.

We gave GREAT service for no cost--delivered, set-up, made sure you were happy, answered my personal phone at 2AM because you had people over and your system did not play (push TAPE MONITOR, you dummy) but of course did not put it that way. My customers sometimes spent close to 6 figures even back then as we sold handbuilt hardwood cabinets (I had a wood shop across town) to go with your system. Today, if you have a Sound &Sight/Sound+Wood cabinet, you have a Bentley as we only made a few of them--fewer than 150, I think--and it was designed, created, and installed by us for you and was one-of-a-kind from walnut, teak (UGH--hard on equipment!), red or white oak, Honduras mahogany--not available any more--or, if you were really into it, rosewood.

We also contracted with Mark Levinson to make his HQD system stuff. He was a VERY slow-pay, as we say.

https://www.google.com/search?q=hqd+system&rlz=1C1ZCEB_enUS845US845&tbm=isch&source=iu&ictx=1&fir=mDeE57BQgiUvpM%253A%252C4idAb6AkN4A07M%252C_&vet=1&usg=AI4_-kTZUYQn-tcvKDkpYHfPaYqtLa891w&sa=X&ved=2ahUKEwjY29L78qDlAhUEc60KHSqLDCMQ9QEwB3oECAMQGA#imgrc=mDeE57BQgiUvpM:

So, yes,a discount was possible, and one thing gone was good, but I was after forming relationships with customers, many of whom back then were audio hobbyists who were classical music lovers. Even Mr. Johnson did not like that we played rock on his stuff...wanted us to demo classical ONLY. Much different times.

BTW, I sold MANY pair of Magneplanars with Audio Research gear (they had a marketing relationship back then...Wendell was at Audio Research in those days)...to customers who loved "Money" and "Midnight at the Oasis" and ANY Linda Ronstadt played on that system using various sources from TT with expensive arms and cartridges--SUPEX and SATIN and DECCA and so forth were big then, and low-output versions were just coming online for the masses--to Nakamichi decks (all broke within a couple of weeks but they sounded pretty good!) to even the Sequerra tuners.

It was a great time to be in this business--before a lot of the silliness entered--and had I been less naive I might have stayed. Turns out dear old dad was right, as he often was. Funny how that works out, huh?

Cheers,

Richard

@glupsonI hear you.  I was in a shop yesterday that used to be next to my shop in the '70's.  They sell lighting--lamps and shades and stuff like that.  Some is very expensive, some regular.  The owner is still the same person--out of town right now--but the lady there and I had a great talk about the old days.  She said some of the other shop owners from that small center still drop by every now and then.

THEN, she told me she had to call the cops 3 TIMES last week due to a-hole customers who broke merchandise, cursed, yelled, went nuts in their store.

I reminded her that yes, they moved to the next town (Delray Beach) north of Boca, but many of their customers were BOCA people. I laugh at them now since I am not in business, but the reality is that SOME of them are so amazingly nuts that they believe they are entitled to anything they want anytime they want at any price they want. 

Imagine owning a LIGHTING store--not really very controversial, right??--and having crazy people for customers that make you have them arrested for shopping!!

My take is that their belief is that God put them on this planet to get ALL THE MONEY and then make everyone else bow down to them.  I don't know--but I do know I am moving an hour north as soon as my house sells.This town went from a small, quiet resort/vacation town to something I don't recognize, and I lived on the island of Palm Beach for a number of years, where people really ARE wealthy.  Most there do NOT behave like Boca people...I have no idea why.

Keep working with your dealer and I am sure you will get the better prices as time goes on.  If your dealer is a high-end one, he or she probably has your best interests at heart and will do whatever is possible to keep your business and have to talk t others about it.  We NEVER advertised--did not have to due to word-of-mouth.  Funny how that works!

Cheers,

Richard