Margin on speaker sales by high end dealer


Many a times, you talk with a dealer and they order and deliver the product. So you spend 10k on a pair of speakers. Seems very simple to do by a high end dealer. And most often done without an Instore  visit.
So how much are they making?
emergingsoul

Showing 1 response by denverfred

With all the pissing and moaning over the demise of retail audio, it’s wise to remember that retailers do not work for free. The only material benefit I can think of for an audio retailer is the opportunity to buy gear from their manufacturers at “accommodation” prices—which are typically 50% off MSRP (below cost!). QUICKSAND!!
Take it from an old store manager: Audio is sold by proper businessmen and women on the basis of Gross Margin.
Gross Margin = [Total Revenue – Cost of Goods Sold]/Total Revenue x 100. If the cost on an amp was $1000, I would multiply that times 1.65 and come up with a 35% deal—$1650 very acceptable except where “policies” dictate no discounting. Speakers are very hi-margin typically: 40% plus. TV’s are a problem. If you can get 20% margin on a TV, you’ve made a killing. Accessories and cables 55%+. So with hi-margin speakers and cables in a system, I can have plenty of room for “package” deals, discounting or hammer-and-tongs bargaining. Cost X 1.65 keeps the doors open. These are not secrets, but worth remembering.