PS Audio Revises Marketing to a Direct Sales Only Model

cutting out the middle man makes the product more affordable....keeps the company in business

genious

Makes a lot of sense. They already have a recognized name.  

More affordable?  Lets hope so.

If they drop the prices 25-30%, it will put them in a really price competitive position.  

Is there any actual indication that prices will be lowered as a result?

prices are not necessarily lowered via direct sales platforms. nor are those products prices then 'negotiable nor can they be expected to be.

From personal EXP PSA has demonstrated exemplary conduct after the sale and strong product durability.

Pricing however be it adjusted down or other wise remains to be seen.
another thing to consider is PSA in the past has used off shore or out of house makers to contract production of their goods. consequently supply and demand could well adminster pricing to some extent as of that result.

if PSA does indeed lower pricing, they could really corner a more than fair market share in Power line cnoditioning, cabling, and maybe even in the mid level digital streaming device arena.

lets hoep this latest business plan works for both sides of the marketing coin, seller and buyers.

I skimmed the forum thread at PSA, including the two entries from the CEO.  Nothing in those two entries to indicate prices would drop as result of this move. 

To the contrary, discussion by forum members (not the CEO, however) that the change would lead to elimination of current practice of dealers discounting off msrp, so that real prices consumers see going forward might actually increase for many (ie, back to msrp).

Paul has stated in videos, that at some early point in his career, he felt he had lacked business sense. I find this is an awesome business decision. What I find disturbing, but understand it, is the amount of folks who visit dealerships for demonstrations and advice, and then go via the internet, to purchase, new, as well as used, eliminating the dealer. Yes, this happens all of the time, as I know some dealers. I still believe a good dealer might be important, but their job to stay in business, is harder than ever. I also believe, PSA pricing will be a bit better. I am wondering if Paul will change the company name, eliminating the " S ", at some point, as Stan has nothing to do with the company anymore, and this has been for quite some time.

Price rarely plays into it.

’shiny shiny crow’ is the big arbiter on the "buy/don’t buy" scenario.

Shiny shiny crow, is a euphemism for the attractions of the product, however that may play out.

Is the item shiny - to your inner crow? If it is, you’ll probably buy it.
I'd like to think that audio qualities are at the top of all lists of everyone who might buy a piece of audio gear.

Decades in the industry taught me that this idealization on my part is not the dominant part of the market. Or, that quality may be there, but the shininess of the item is what truly seals the deal. 

It's not truly a criticism, but more of a idealism on my part - that gets shot to pieces in the real world. The reality is that few people know how to evaluate a item in the best sense. Thus appearance and neatness takes second spot and sometimes first place in the decision tree in buying behaviour.

Went through the thread on their forum.  If there is enough profit margin their dealers were discounting 30-40%, that suggests PS Audio was selling to dealers at about 50% of retail.  I would expect they could pay the cost of their increased infrastructure and still reduce retail prices by at least 20%.  I do like the Schiit model that the price is the price, every day, all year long, unless B-stock or marked down as discontinued.    

Prices drop? Never. Profit up...maybe. Who will sell the product? TACT Audio died because of that strategy. Their room control system remains the most elaborate ever made but Boz (Radomir Bozevic) assumed that everyone was as bright as he was. His stuff was built to the highest standard and it was complex stuff that nobody had ever seen before. If he engaged a dealer network the price would have gone up at least 30% so high he felt it would never sell.
So he marketed direct. It worked for a while because his units were so special back then there was a huge buzz in the market. They were so special that most of the buyers had trouble using the units and Tact was swamped with phone calls. Trying to explain how DSPs work over the phone to someone who flunked out of math was not easy. There was a growing crowd of very unhappy campers and it spelled the end of TACT audio. If Boz had a trained dealer network that could have handled the customers locally things may have turned out different. A shame because their system remains the best If you know how to use it. 
Back to PS audio. There is absolutely nothing special about PS audio. There is nothing in their line up that remotely attracts my eye. How will people be driven to buy their stuff if they are not exposed to it somewhere. In my opinion Parasound makes better products and has a strong dealer network. Can PS audio compete with them marketing direct. I certainly would not bet on it.

My dealer just informed me that I have 2 weeks left for him to order new products from PSA. I’m a little bummed, since I was saving for a BHK250. However, I cannot pay the $7900 retail price. The dealer discount was significant. I’ll probably have to seek out a used one or just look elsewhere. I really love my BHK Pre amp. Oh well...at least I got an excellent preamp.

aberyclark, save money and be happy, very happy. Get a Parasound Halo A21+ designed by John Curl. It is faster, quieter and has a much higher damping factor than the BHK 250. 1100! 

I know that everybody says "Brick & Mortar Stores are Dead / Yesterday’s way of shopping"

However - when it comes to spending several thousand dollars (or, at least a grand and a half and UP), call me crazy, but I WANT to touch, feel, and in this case HEAR something BEFORE I buy it.

For a Boutique product like high(ish)-End Audio - (which caters to a small, select group of consumers): it would be difficult to operate "Factory Showrooms" where you can look and listen, but still have to order on-line, except for places where lots of people have lots of disposable income or a huge thruput of visitors. (LA Area, NYC, Vegas, Scottsdale, maybe Chicago...) This leaves most of us in fly-over-country with nearly no way to get our hands on something like this, other than buy it and return it if we don’t like it.

I only put so much faith in on-line reviews - experience tells me that they can be biased and/or altered.

For companies that choose to go "Direct-ONLY" = then, they should expect to have GENEROUS return / "home audition" policies.

If they reduce their MSRP on-line a bit because they do not need to leave as much room for dealer mark-up, then maybe it would be a GOOD thing. (But we’ll just have to wait-and-see, no?)

the next problem we encounter is that most dealers these days are merely a sales desk for a one off order, for an inquisitive customer.

things are so close and tight, that no one really stocks anything anymore.

Gone are the days when you could see the delivery truck showing up at the audio shop and watch 10-20-50 pieces from a given audio company be delivered to the shop and shuffled into the stock room of the shop.

Or where you walk into the shop and see the main listening area floor covered with stacks of new gear boxes, 10x of a given integrated amp, 6 boxes of a given tuner or CD player, 10x turntables, etc.

Changing times, tighter finances, internet markets, and so on, all killed it off. We saw the first signs of it when the market was still in good shape, with all the cross territory sales of one given sales location, until the companies involved shut that particular dealer down.

the buyers and the marketing/sales methods have put themselves in the drivers seat,and killed off the very product companies they wish to buy from. That aspect combined with the commercial/monetary/financial scenario we are now facing globally.

I’m just rambling, and this is not a perfect explanation by a long shot. But the real scenario heads off in similar directions to what I speak on. And we will all see it differently.

the point is, a distributor is supposed to stock large amounts of a product from a given company, and be the elastic delivery source point of singles or multiples of a given product, for a given dealer. that is what they are paid for.


Note that Daniel of Plurison and Audio Plus, probably the most successful large high end audio distribution company on the planet, just sold his company off to other interests.

The audio distribution model is dead. Internet killed the audio star.

Direct sales is all that remains, essentially, re potential for success and future existence. The other models are just hanging on, and have not yet got the memo....

One last point, the buyers are certainly not innocent in this demise of the model. Their position is essentially contradictory. They want the company to be around to give them what they want when they want .,.at the same time they want the product for as low a price as possible, and even free, if it can be arranged, or forced.

People would and do pay if they can and have the cash for it, but the economy is being tanked by gamesmanship at the federal financial level by inside players..and those players seem to be insistent on a slow choke-hold into a death spiral that moves slow enough that people don’t see it for what it is. the tick-tick-tick of slow elimination of the prior us middle class, as they used to be called, when they existed. Exhausted and used up via proxy war. Apparently... purposely so. A two-fer, by the hidden players, as that’s how they roll. (they don't want any veterans coming back, veterans talk too much..)

Now even the bigger players (in audio) are feeling the water rising to overcome them, re the distribution of the higher end components with better (more financially comfortable) markets..now signing that even it.... has exhausted itself.

Whatever the final end game is, whether it is a slow motion thing or a fast moment, it is getting close. Definitely closer than it is further.

Do Parasound and PS Audio generally compete or market themselves at similar levels of quality / performance, at least in the preamp/amplifier markets?  Don't know a lot about either brand (dealers I've been to don't carry either), serious question, but I see a lot of recommendations on a'gon for both.  Thanks!

If there was any competition it is over now. I doubt Parasound will do direct sales. Because they have their stuff assembled in Taiwan they are very competitive and apparently the stores love them. In my day it was NAD. It was just great stuff for the money. NAD never had something like the JC-1 or Parasound's Phono amps which are also killer. kren006, for most people it is all about the money. Where can I get the most performance for my dollar. Very few of us get to go into this on an unlimited budget and I hope by now most of us realize that just because something costs more does not necessarily mean it is better. There are real values out there like the Benchmark AHB2, their DACs and ADCs. 

Teo_audio., the successful dealers today like Singer in NYC and Goodwin's High End in Boston are in areas with large populations of wealthy people who just want a nice system and have no price limitations. So they let people at stores like these supply and set up systems for them. They are not about to play around with wires. Sometimes a theater set is required as well as cabinetry. 
This business is enough to keep them going but they do sell individual pieces and they will bend over for proven customers letting them do things like try amps at home etc. As soon as you walk in the door you will be evaluated to determine if you are "qualified." A guy that drives up in a Porsche is more likely to be qualified than the guy that drives up in a Ford Escape. 
Stores outside of wealthy metropolitan areas are disappearing. There just is not enough high end business to keep them going. What are they going to do, compete with Best Buy and the internet?

..just wondering if today’s 10,000 dollar black box is that much better then the 5000 dollar black box bought years ago and is still working.  ...and just wondering if those aging audiophiles with hearing loss are willing to even try them.

For companies that sell relatively low volume, direct sales is probably the best way to have the best customer service and competitive price. 

PS Audio has one of the best customer service’s in the industry. I don't see much of a downside.

ozzy

Progress has made it difficult to survive in this hobby, especially for the manufacturers. We, who buy, will always be there, but those who sell, have to adapt to market trends, and good look with your crystal ball, my dear seller.

Some see the writing on the wall for any number of reasons that we don’t appreciate so a lot of this is speculation on our part, but, I wish PS Audio well in the choice they’re about to make.

If the price does come down some, good for all, as they have great customer service from what I’ve read. If it doesn’t, it can be for any number or reasons from already absorbing too much costs on themselves as material prices rise unpredictably, to a loss of foot traffic and eventual sales at the brick & mortar stores that keep their line.

All the best,
Nonoise

More and more consumers are recognizing the benefits of easy ordering on the internet and in-home evaluation. For high-end audio products in particular, it makes a lot of sense.

I run a cycling e-commerce business and also a large brick&mortar bike shop. I can tell you that the e-commerce business is significantly more efficient. With increasing building lease costs and payroll costs, it's harder and harder to make any profit in the B&M business.

PSA has been migrating toward a direct-to-consumer model for a while. Their trade-in policy is brilliant in my opinion. They are already giving up more margin selling through dealers than they are giving up by taking trade-ins (at full original MSRP I might add) since they limit the value of the products you can trade in. Any revenue sharing they get with The Music Room is gravy.

By selling direct, they can provide benefits such as a generous trade-in policy and returns policy which is a lot more difficult if you are sharing half your profits with someone else. I'd much rather do an in-home audition in my own system of an audio product than listen to at a dealer. Granted, better dealers will let you take a product home (if they have a demo unit), but I think this is not always the case, and many customers don't have a local dealer anyway.

It's pretty tough to start out with a direct to consumer model although some have been able to pull it off successfully (look at Schiit and Tekton), but now PSA has an excellent reputation and I think they will do quite well. 

I bought my Power Plant 3 from their website because I got a great trade-in on my 20 year old Monster HTPS 7000. But even with this trade-in, I'm sure PSA made more profit than if I had bought it at a dealer.

This makes me happy on levels I wish to not discuss 😁.

I wish PS Audio the best and hope that this new business move helps PS Audio receive more of its profit.  They make nice products! 

I hope this works out well for PSA and their customers. I was lucky enough to find a one year old pair of Stellar Monoblock 700s on eBay for half price. The original owner used the PSA warranty transfer process and PSA gave me a full warranty as if I had just bought brand new from them. Those amps are truly amazing, by the way. They are a solid company founded on the principle of treating people right, whether they are customers or not. Many companies use this direct sale model successfully. I just hope they are well known enough to keep up their success. 

PSA offers annual Black Friday sales (usually runs 2-3 weeks) every year where they provide 30-40% discounts on select equipment.  I bought their BHK PreAmp (2 yrs ago) and the P12 Generator (last yr) that way.  They also offer a very friendly trade-in policy on new purchases, usually 30% of the MSRP.  That trade-in discount is up to the list price of the equipment you're trading in, no matter how old, up to the 30% of the piece you're buying.   You can do very well with their trade-in policy.

Their service is very good.  I've had Paul, CEO, personally write to say PSA was giving me an added discount because of a screwup by a 3rd party dealer in ordering PSA equipment.

The downside is their equipment can be quirky.  I've had to send back for service my DS Junior within the first month.  Software upgrades are problematic at times.  You can read endless war stories on their Forum of people having issues with new purchases.  However I've rarely seen anyone throw up their hands and request a refund.  Through it all they are always there, LIVE on the phone with great patience to help you get through it.  Once the equipment is settled, it has been very good.

All in all they're a very good company that could be great if they had a better QA department.

Everything is cutting edge in high end audio (yes, this is true, think it through), and no reams of support staff (location with 1200 people on the phones, 7000 in R&D, etc), as high end audio companies are just too small to cover it all.

I’m not saying you want cutting edge products, low prices, with personals service and the support levels of a multi billion dollar corporation.

But, that some actually do expect that and get upset when it is not that level of perfect.

The other thing is that when things go wrong...lots of people get brushed off by those major corporations.

Direst sales also has the advantage of the producing company being in direct contact with the end user. Usually at least a few times, for each major sale. This is a very good thing for the company and ultimately, the customer.

I’ve seen up front and personal...I’ve seen dealers mess around with manufacturers and mess around with the buyer, as they are in control of both ends of the relationship of people - to the the equipment they buy.

Dealers can be a good thing but they can also be a bad thing.

@ aberyclark- If you’re still interested in the BHK amp(s), contact these guys, about their PS Audio blow-out sale. I just got an email from them, regarding some VERY steep price cuts, on their, "photo models."   (ie: BHK S250 = $4799, delivered). https://www.underwoodhifi.com/products/ps-audio

Thanks I already have a fine dealer that discounts products similar to Underwood. 

maybe its time for someone to set up a "demo dealer" someone that is not there to sell to you but to allow you to listen, feel and spend time with an item. maybe the manufacturers can pay them or you pay for the services maybe both. I'd love to go into a spot listen and look at new stuff and if I like something buy it online directly. I don't know if it's is a financial model that would work but interesting anyway. 

They could even have computers set up to access the direct sales of the product in the store with help from the staff. This way the manufacturers have a dedicated demo site with little overhead and reap the benefits of direct sales and dealers. 

 I think the distributor model is dead who likes paying a middle man. I don't but a local dealer (demo site) I do support in what ever capacity it warps into. 

 I like the knowledge a good dealer brings but hate the pressure of a sale. not to mention a spot to facilitate warranty work even if its just liaising with the manufacturer. 

Think of what it would be like to go into a space and see hear tekton, Zu audio, Schiit, PS audio gear (the list goes on) with out having to spend months playing the buy-listen and return game for how much loss each time (shipping and restocking fees alone could sink you). 

How much would you spend for a service like that? what's that type of service worth to you?

$100 says prices stay the same on the consumer end.  

Owners will now own yachts.

@gochurchgo  You may be right about the prices staying the same but Paul McGowan is dedicated to the audiophile community and there are few places to utilize a yacht in Boulder, CO.

Get the bhk 250 over the parasound, I did 10 months ago. But only your ears will tell you which 1 is better.

I bought a PS Audio Device, after hearing the device at a Dealership.
Following the audition, I investigated the options to purchase, and found the
Dealership Prices were varied by approx 20%.
I then researched the used market for about two months, and purchased a immaculate same spec model for approx 75% less than the most expensive dealership price.
I had no interest in PS Audio until I visited a Dealership, that had a system I was familiar with, on auditioning a DAC on the system, with the PS Audio Device, 
the outcome was a search to purchase a PS Audio device with the intention to purchase.
I wonder how many of PS Audio Dealership sales are generated from this type of introduction to their products.
When investigating devices at the price level and performance level, PS Audio compete in the Market at, a audition on a familiar / trusted system will be very important to assist in making a final evaluation and decision.
If a device ends up on a shortlist, a home evaluation is even more important at this price level and performance level.
I like my PS Audio device, but not enough to go to a show/event to specifically listen to it on a unknown / unfamiliar system, or watch you tube 'blurb' about the Company.
So if the Dealership network is removed from PS Audio interface with customers,
I personally don't see how they will generate new customers in the capacity they have been, or maintain loyalty with existing customers, who will have had the option to evaluate a product on a known trusted system.
In fairness to PS Audio, I don't have a algorithm analysis of their market status, or the internal brainstorming knowledge, that would create the energy to change a marketing strategy, so I don't know how this all gets condensed into deciding how each potential individual customer is going to embrace their new restriction to engage with PS Audio.  
Interestingly, a few miles from my home in the UK, a 'from the home' Dealership who I have spent a few £££'s with in the past few years, now has Jay's Audio Devices in stock. As I know that system very well, I can now in the near future take part in a PS Audio/Jay's Audio Comparison, with the DAC, that lead me to the PS Audio purchase.
That comparison is one that has been discussed on here, and I will be happy to present my assessment on that thread. 



 


   

Get the bhk 250 over the parasound, I did 10 months ago. But only your ears will tell you which 1 is better.

Parasound is not on my radar. I always wanted a Mac 275...I actually may go ahead and try one for giggles. 

msreyn +1

JD

I think he is going to regret going direct.  If it fails, he needs to be prepared for dealers not willing to take him back if his business model fails.

This hobby is enjoyed by the very few and I doubt beginners will know enough to find PS Audio during their searches and I doubt they will be able to afford his equipment.  

I think here is where the value of dealerships comes into play.

Lots of speculation, above.  Why not wait and see, what shape the PS Audio Direct Sales model takes, before scuttling the ship?   Far as hearing before buying; many that sell direct, offer a 30 day/no questions, return policy.   McGowan has never stuck me as any kind of dummy(quite the contrary).

This is a quote from someone above: " Back to PS audio. There is absolutely nothing special about PS audio. "  I absolutely DISAGREE. I have owned multitudes of audio gear since 1976 and now my system (with the exception of my Thiel 3.7 speakers) is totally PS.  They make fantastic gear and i think their gear is very price competitive when you consider the build quality,  great customer service,  long warranties which are often honored even after the exp.  date,  and most important the sound quality.  The only piece that seems to give people problems is the DMP transport,  and that is now discontinued.  The day may come when i own a piece by another company,  but one thing i will NEVER EVER do without is their Power plant.  The P15 and P20 are units that will improve your system and no one else makes anything close.   I for one wish them all the best and hope they "live long and prosper" and that Paul can indeed buy a yacht if he so chooses.

 I would be surprised if they change their real pricing. I didn’t look today, but they had been offering at least 25% off retail if you traded in a decent piece. Underwood is offering the BHK Pre for $3888 without a trade and has for months.  PS Audio has a listening studio/sales space at their factory here in Boulder. I tried to find out what they did with their trade-ins but they wouldn’t tell me. I’m guessing they go to The Music Room, in our area also. 
 What is confounding me most is that everyone says you must listen first before you make your purchase. PS will let you take a piece home for a while, but that means you have to put up all the money to buy it just to listen. Pretty counterintuitive to me

Got a bit weary reading the repetitive responses so forgive me if this was said.

I think we’d all agree PS Audio has moved upscale with their product line. And they are expanding, into speakers. All of this puts them in direct competition with other high end companies and their dealers who sell Magico, AR, D’Ag, Wilson, McIntosh, etc. When PSA is in those dealers they don’t get a fair shake. Those guys want and need to sell the big names and will discourage PS Audio purchases. "it’s okay if that’s all you can afford. The product doesn’t really compare to dCS". They really believe this or need to... the price points are so different.

PSA and Paul in particular are good marketers and don’t need their dealers working against him. PSA is now getting decent reviews and is certainly recognized as a player at the top levels. They have developed a market niche in the quality audio market, offer good service and should do very well with direct distribution. It’s time. Good luck PSA.

maybe its time for someone to set up a "demo dealer" someone that is not there to sell to you but to allow you to listen, feel and spend time with an item. maybe the manufacturers can pay them or you pay for the services maybe both. I'd love to go into a spot listen and look at new stuff and if I like something buy it online directly. I don't know if it's is a financial model that would work but interesting anyway.

An interesting idea but you're right it's not a workable financial model.  It's hard enough to make a profit as a dealer based on the sale of new and used gear.  How could anyone manage the overhead without sales revenue?  Based on my experience, I doubt that many (any) audiophiles would be willing to pay for this; at least enough to offset actual operating expenses and a modest profit.  And who goes into business, working his/her arse off with the idea of limiting themselves to a modest profit?

Home demo (purchase with right of return or clean demo) is a better way to go.  I wish more manufacturers supported and promoted this method.

 Travis is the Man at P S Audio   Let's get that right Joyce MG .

It seems that there are fewer and fewer "brick and mortar" high end audio shops and many of them have branched out into other things to stay current.

I have been a PS Audio customer since I bought the DirectStream DAC, just after it was introduced.  I also have their DirectStream disk and P15 power unit, and haven't had much of a need to contact them for support, but when I do, the response is always very timely and excellent.

I think that, with their 30 day money back policy, they should do well with this new business model.

Shipping....$95 ground to ship with $2k insurance from Boulder to Rogue Audio (heavy preamp) in Pennsylvania.  I think it was $55  shipping without insurance.
Insurance is $$$. (Imagine the cost for shipping a $12,000 PSA power unit back to them .....wow). All just to try it for a month?  Maybe $25/$1000. If they charge to ship it to you, too, You’re out <$200 just for a $2000 unit for a trial.

Agree with michaellent, shipping long distance high end, heavy, hi-fi is fraught with problems. In the local dealer model, the dealer ensures the delivery is made without damage, and is there for any issues. I have done both long distance shipping and local dealer, and will always pay more for dealer peace of mind rather than be stuck with damaged gear and begin the long process of contact and resolution.

Also the supply chain for online has a serious flaw for high end heavy gear, which is your paid for possession is in the hands of a minimum wage courier with little or no interest in delivering your package intact. Having experienced 22kg tube mono-blocks delivered with smashed tubes having been packed well but dropped and miss-handled. Time to live amplifiers was two months to replace tubes after the supplier didn’t want to know, meaning I absorbed the cost even though sent ’insured’. You try claiming, mostly its not you but the supplier that insures and they (insurers) always argue or make it as hard as possible. Damn sure my overseas supplier claimed and kept the payout! Even if you do get a payout its weeks before you have a live unit. Plus you are on your own with any other faults save repacking and re-posting and more weeks without your paid for equipment. Nope, dealers for me going forward, I don’t resent their margin and to me its a form of insurance.

The most successful direct retail companies seem to be the ones that go for high value. Examples are Emotiva, Shiit, and Tekton. It will be interesting to see how PS Audio approaches this because they are somewhere in the middle. Their gear is fairly expensive but it is also high quality.

There has been a fair amount of PSA discounted new gear on the market. I own a PerfectWave II DAC and a PerfectWave transport that I bought for about 50% of retail. I also see quite a few PSA pieces that are fairly new on the used market going for around 50% to 60% of MSRP. I don't know how many people actually paid the full retail price for new PSA gear. Paul is really good at marketing so I'm sure he's got this figured out but it's hard to imagine that he's going to be able to hold firm on the current MSRPs if he goes to a direct market mode.