Do Dealers think it is sinful..........

As a person who worked as a dealer, I have to put my two cents in. Markups ARE high. Higher than you would expect. Speakers are 100%. The lowest margin product we carried($99 Sony throwaway mass market garbage CD player - dealer cost $84) had an 18% markup. Most electronics went for 35 to 60% profit. And we would give great discounts, provided you asked. Example: PSB Gold i speakers, retail $2499. I have seen the owner several times go all the way down to $1300 on the pair on the floor, and $1500 for a pair he would order. His philosophy, "Hey, I just made $300 for writing a sales slip, and making a phone call. Less than 5 minutes work." And don't spend so much time letting your heart bleed for dealers. If you heard the stuff I heard about customers from so many dealers, you wouldn't have so much sympathy for them.

Everybody needs to do the math in the same direction or we'll disagree forever - If a pair of speakers retails for $4000 and costs the dealer $2000, that's 100% markup but a 50% margin. I don't think anyone believes there are many $10,000 amps that cost the dealer only $3000, which would be a 233% markup and 70% margin. There is an interesting article in the Stereophile archives (tho it is several years old) regarding the business of being an audio dealer and the rough numbers I remember from it were that dealers worked on roughly a 40% margin (70% markup) and tried to keep their costs to 35% of sales, meaning that they cleared about a 5% profit.

Two thoughts: one -- even if the markup is high, some of that still has to go into cost of doing business. With high end equipment, there can be a lot of breaks between sales.
OTOH, high end gear has different criteria for "doing what it advertises" than consumer-grade gear. I can't tell you how many times I've heard the advice, "what works for me in my system may not work for you in your system -- audition!" I need to be able to burn in a piece of gear and then have some dedicated listening time before I know whether or not I want to keep something. Only a local dealer can provide that service, and if he won't provide that service, then he's providing a disservice.

PS to Awdeeofyle -- for every newline that you want (two for a new paragraph), try adding the following four characters: <BR> (I think this will turn out).

kthomas is right. we all need to use the same math. to clarify my prior post: (1) the lion's share of highend harware (speakers, amps, etc.) is sold on a "40 point" margin to dealers, i.e., if the "retail" on an amp is $10,000, the "dealer cost" is $6000 + freight; (2) much of the wire/accessory stuff is "50 or 60 point" product, i.e., if the msrp is $1000, the "dealer cost" is $500-600 + freight. it does cost a lot for a dealer to inventory product, particulary since competant one's use at least some of the inventory for auditioning. the auditioning/demo equipment usually can't be sold as "new" and thus provides a lower margin to the dealer. all of this, and more, must be factored into the "discount calculus."