Dealer Discount

An example of discounts for less service is Cary Audio.  Go to their web site and check out how much the price of a 5K piece goes down if you accept lower warranty and replacement options.
I know they are not retailers but just an example of how businesses work.

Ask any BMW dealer, they will tale you that the worst unwanted customers on the planet are 3 series customers.

They can’t afford the cars but want to look like they can and do.

so they treat the dealers ans staff like crap, demand far more than they are entitled and on and on and on.

The best customers, the BMW dealers say...are the 7 and 8 series buyers.

They can actually afford the cars and tend to be excellent non difficult human beings.
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Audio is an enthusiast market. Which means it is an ’audio crack head’ market’

In reality, no one can afford crack, it is all about the high.

Audio is about the musical high.

Teo, on in this case, me (Ken Hotte) wanted to call the Teo GC Ultra Cable, for the humor of it alone.....The ’43’. I’ll explain why.

In audio, you end up with people who constantly ask for the most amount of audio crack they can get for the amount of money in their pocket. Or some version of that story.

So someone comes up to us and asks for how much cable can they get for the $43 worth of wadded up bills they throw on the counter in front of us. "How much audio crack will this get me?" is the actual question at hand.

This is so prevalent that some companies make their fortunes off of it. Art Dudley complained about it once, re cables. He was talking about a company that had so many cable lines, like seven or eight (each with speaker, balanced, digital, and RCA cables) that they could fit to any audio crack customer and vacuum every dollar available off the table.

Art hated this (for the right reasons IMO), as it was for filling in the holes to take all the money and also to serve as a form of market denial for other cable companies and to make sure that the dealers could get to vacuuming up every last cent that was up for grabs, simply by being a dealer for this brand. In the end, it has nothing to do with the value or the quality of the given cable product..

Part of this ugly scenario, was all about servicing the audio crack needs.

the other part is the one about wanting discounts left and right. that is the other kind of response in the audio biz and then the idea of overpricing so that discounts can be given and the deal looks good on paper, and the dealer makes tons of cash, but in reality it is overpriced lower quality audio gear or cables. The deal is paper only. paper only. And the buyer got ripped off.

This is going on right now, with one particular cable brand of renown. Dealers love that cable brand as the margins are huge. this huge margin also conditions the customer to the idea of huge discounts on cables, cables not made by the given ’huge dealer margin’ brand’. It also helps pay for constant full page advertising. So the reviews are flowing, etc and the customer of the sub par cables..pay for it all.

Your best cable value comes from the smaller companies, NOT the established giants, ok? NOT the established giants. The eventual millions in advertising to keep the hype up...was pulled out of the customers and did not go into the product.

The customer does not understand this and the dealer sure as hell ain’t going to tell them about it! the net effect is the huge margin causes the dealers to congregate around the one brand that is nothing special in audio quality, outside of that huge margin.

This denies market share to companies with REALISTIC dealer margins, and additionally denies market via the customers who won’t buy the other quality brand..as they are expecting huge discounts on the cables that don’t have huge (unrealistic) margin built into the pricing.

A good friend of mine was the Florida sales rep for a few high end companies.  He showed me his invoices.  The dealers paid 50% of retail, plus 10% shipping on small orders.  I sold my system and bought his demo pieces.  The 38 year old collection is still working perfectly on my television system.  He did make me go pay retail from one of his store for a cartridge, pre-amp, and head amp.  My buddy got great in store discounts on SAE.  None of it survived 10 years.  I was lucky, but i quickly learned that the generally non-discounted stuff is much better.  What I always wanted to know is why some very wealthy people insist on the power play of being a dick to dealers who are bothering to even talk to them.  If you have a lot of disposable income, don't be a dick.   I was in retail.  Not one person with a Titanium AMX card ever gave us any argument about price.  Many Lambo drivers did.  

@teo_audio,
Someone needs to tell BMW to stop producing the 3 Series cars, so that it will spare their dealers a lot of headache :-) And then they should rely on only 7 and 8 series customer for their bread and butter.
I don't know which BMW dealer you talk to. But 3 Series is their bread and butter.

Disclaimer - I don't own a single BMW. And even though I can, I would rather invest it in my audio system :-)

If you are a good customer dealers will surely support you. Some accommodate trade ins to make your upgrade easier, some give bigger discounts, some give you equipment to try out etc. 

Mat
www.jjaudiosolutions.com

To make the decision to discount by the store a little more real.....


Assume a store has sales of $750k per year... or $300k net to the store assuming a 40% gross margin overall.  From the $300k comes store rent, wages, advertising, returns, financing costs, business taxes, state and federal taxes, etc...maybe resulting in $75k leftover for the owner. 


How how many of us would put up to $1M at risk to earn $100-150k per year?


Personally... I want three things... a store or an internet direct seller that has staying power....second, that they treat me reasonably.... third, that their price to me is in the ballpark of what they sell to others for. 


At the end of the day, this is value which is more important than price.