Retail Buying - Reality Check

This can go either way.

1. You screwed them by wasting their time with bids. You picked their brains, occupied their time and spent your money elsewhere.
2. They screwed themselves by not cutting you a deal.

I'm sure the truth lies in the middle.

The big issue I have is 50% mark up, at least, for products that are unheard. If the store offered 30 day full return with no penalty, than I can see this. My guess is they did not.

Marty

Well rogo, you've identified a major problem in high end retailing. High mark-ups vs. ready availability on the net or nearly new product. I have made a decision not to go cruising the salons when I will likely buy on the net; I have a small business (not retail) and I would feel very uncomfortable. However, if they are quoting you MSRP prices and then adding design fees on top of that, then they are getting greedy and cutting their own throat. Their mark-up should include system matching and recommendations. Unless they are doing a custom install, its not really a "design", its just the value added that a retailer provides. Even if it is a custom system, they are probably making a pretty good profit on the install work, kind of like kitchen companies. If they do the design and you buy the cabinets and labor elsewhere, you pay them a fee. If you buy the hardware from them and have them do the whole kitchen remodel, the design work is usually gratis. It doesn't sound like you initially intended to take their time and then use the knowledge you got elsewhere, but that's what you ended up doing. If you had that intention going in, then shame on you, but it doesn't sound like that's the case. Anyways, I would hope that you would now realize that the moral thing to do is to make a decision up-front; buy on the web and rely on this site and live with your mistakes, or buy retail and pay the added cost. You should also be aware that there probably is a middle ground in terms of finding a dealer you can work with long distance, who will also cut you a break on the price.

The problem seems to be double sided as you stated, but it is probably one sided if you think of what is involved from your standpoint. The dealer has what he/she wants to sell at the price they wish to sell at. You have your hard earned money. This is your decision to do with your money as you see fit, hence the problem is all yours not theirs (the dealers). Sooner or later dealers will need to try to understand and compete in global market. That might include competing with used prices over the Internet. I tried mightily to get my local dealer to come down from $3950 with a trade ($500 credit subtracted from $4450 MSRP plus tax) on a new pair of Thiel CS 3.6s (a 10 year old design mind you) to "just" $3500 with trade for a pair of speakers I had found used (Audiogon), but under warranty for $2210 with shipping (plus I just sold my CS2s for $450). I did NOT audition the speakers there as I had heard them previously at two other dealers over the years (1992 and 1997)while auditioning amplifiers that I purchased. So...none of the dealer's time was taken up by me. Also the dealer had no product in stock nor would he sell the demo units at my asking price. I DID tell the dealer that I had a better price to work with also. My question is WHY and HOW could I support the dealer price? Furthermore, out of town Thiel dealers were beating the local new price too! In personal economics, there is one major interest...SELF! Also there can not be a deal unless BOTH parties are satisfied. My wife was watching all this...what would she have done if I paid over $2300 more than I had to because I felt sorry for the local dealer? Did I mention major league "buttkicking"? I'm sure dealers all have margin problems, but market determines price. I have two in college so I have margin problems too!If a retailer can not make a profit at the market price no one will be happy, but clearly the product is overpriced BEFORE hitting the retail store. Dealers can always hope a neophyte buyer comes in though... BUT alternatively, if a dealer sells at twice the market price to an ignorant customer isn't that just as bad as me paying twice what I had to pay? Not for the dealer in this case or my hypothetical case... So...back the original problems...to whom does the money belong and what will make that owner the happiest in the long run? Perhaps there can be no mutual satisfaction in the local market at times because we CAN and WILL shop globally while the local dealer steadfastly refuses to acknowledge global price competition. Hopefully, this is not how every local transaction goes...

There's no clear right and wrong in issues like this but a few facts: nearly no high-end lines have margin of 50%. some cables, maybe. (Transparent springs to mind). Most gear is around 40%, maybe 45% if you pay the invoice in 7 days, etc. Video gear is even less, try like 30% or so. (TV's, etc.).

Ultimately if the retailers don't survive (somehow), the manufacturers don't survive = kiss goodbye the idea of high end in general. (taken to logical conclusion). Where do you think used/demo gear comes from?

"So, buying new at full MSRP also meant getting inferior performance for the necessary burn times." This is BS IMNSHO. burn in as a concept is overrated.

"However, 50% markups on items that they don't keep in stock and have to special order, seems out of line to me. " So tell us about your business. Do people know your margins? Do they beat you up on price about them? Is it justified in their eyes?

" Unfettered by the product lines you have to sell, you provide a far more level playing field of unbiased opinion." not really. There's plenty of dealers here masquerading as consumers, and pimping their stuff. Likewise, plenty of insecure buyers that like to reaffirm their purchase choices by talking them up. (and trash talking stuff they don't like.). Read between the lines and you will see this fairly often here, FWIW.

RE: whole-home system installation: It's a service like anything else, and there is a cost. Design may be free (or at least subsidised) but parts and labor never are. Skilled designers/installers don't come cheap and of course their labor is marked up by the store. Some stores stay afloat on their custom install departments... its' where the money is right now (along with Home Theater). 2-channel market is very slumped as far as retail goes.

Yes, I buy on Audiogon too, but I patronize my local dealers when I can and when it makes sense. No, I don't pay retail (who does?) but they make enough to keep in business and I enjoy having and advocate should the need arise (e.g. warranty issue, free loaner gear, in-home trial, etc.). The stores I go to have 7-day money back, 30-day exchange, and liberal (free) in-home trial of demo gear. IMHO, that's worth what margin they get on the stuff.

Just a little devil's advocation here.
-Ed

As long as an internet purchase in another state is cheaper because of the sales tax advantage, local dealers will be at a disadvantage. I buy used on Audiogon & e:Bay. I also buy new & used from my local dealers. I know them well enough, they will give me a fair price.
The more time I spend in this hobby, the more I appreciate input & advice from contacts I've made locally. I won't buy a new "big ticket" item from anyone but a local dealer with a storefront. They will give me a price nobody but a grey-market dealer can touch. And I won't buy grey-market.

I also try to find the best deal available and have been ammused at what local dealers do. Approx. a year ago I was in the local shop and noticed for the first time they carried a product I was interested in. They quoted me $3800 on an MSRP $3700 unit which I paid $3100 to my door delivered! Have no loyalty to people like this, and realize not everyone deals in this manner. Can't figure out how they know who does (or doess not )have the money to buy as you walk in??? Whatever they use it's not working. Best, Charlie

Just wanted to reemphasize something ed_sawyer mentioned. If more and more people only buy used, what would happen to the hi-fi? Many retailers would go under and many hi-end companies too. That would mean less new equipment and less used equipment. Maybe we will have to go back to buying new. It's the cycle of economics.

I say all this but have not bought used for the past 5 years. It is a dilema I face each time I buy used. Like most people I go for the short term benefit and not the long. Just something I think about.

It is a good question - what is the "right price" to buy retail. I am not a frequent buyer of equipment but have always been able to get 10-15% off MSRP. My sense is that many "more frequent" buyers that post on this site get better deals from retailers which troubles me to some extent (i.e. jealousy mostly that they can buy cheaper) but for the help I get and the convenience of local service, I generally don't mind.

But "MSRP plus" for what they don't have in stock, and particularly if you can't audition it, is obscene IMHO. Comparing new against used equipent on Agon, on the other hand, is somewhat unfair - there clearly should be some premium for new. However, when was the last time anyone paid list for a car, boat or any other big ticket item (other than, perhaps, real estate or other one of a kind items)?

While somewhat apples and oranges, I recently solicited quotes for a remodeling project. Bids came in all over the place. I talked to all of the bidders, including the high bidder. He said, among other things, that the other contracters were giving away services and that he had taken a course that said one should get paid for the value provided so he was sticking to his price. I was a bit taken aback - it always thought that the market set the price and "valued" the product - he obviously thought otherwise. If he can get it from others, more power to him, but I feel no need to overpay. Neither should you.

In general, most hi-end 2-channel retailers are struggling due to the HT craze and the plethora of Audio Supermarkets carrying low quality, mass market fare...I guess it all depends on your approach...Im not a high roller...and pretty up front about it...I also dont dont spend alot of time with salesmen about equipment I cant afford or have little interest in...most salesmen cant even afford half the stuff they carry...so I think they can relate to the 'average joe' more than we realise ...you would be surprised at how many dealers will work with you regarding demos,b-stocks,used/trades,etc...this is afterall a luxury hobby...most dont spend 1k on an entire HT set up...let alone a pair of monitors...and yes...by the time a product has hit the foor it has passed from manufacturer to distributor to the showroom...this isnt hi-volume type of sales...mark up is the price you pay for buying a quality product...and in a tough economy...hi end dealers are willing to cut you a deal if you purchase multiple items or they get a sense you will be back...

If hi-end retailers are getting their margins squeezed from competition on the internet, it is because sophisticated consumers (who seldom ever paid MSRP) now have the means to communicate and sell their gear over the net with confidence. If manufacturers can no longer protect their authorized retailers because their products or competitive products are being heavily discounted on the net, they may have to reconsider their business modal. The oil companies did not go out of business when self serve stations replaced full serve (n/a to Oregon). However, hi-end retailers appear to be surviving from HT, unsophisticated buyers and audiophiles who for one reason or another prefer to buy from full service retailers.
The market for this stuff exists. Manufacturers and retailers have to keep their eye on the market and adapt. Scarcities in some items, like premium vacumn tubes, could occur despite strong demand. But, by and large, the market will provide as long as we remain passionate about our hobby.

Hi-End dealers don't really need us at present at all.Home Theater and custom installations-that's where money is.Even our $10000.00 amplifiers is nothing.There are so many people who can pay $20000.00 or $25000.00 for the TV set and $100000.00 and more for the dedicated rooms.Who are we to the dealers if all we want is to buy a $5000.00 component once every 5 years?If we buy more and more often then some of them may give us certain attention.Personally I think dealers know their business and we know ours;let's just not lecture each other.If the price is too high,turn around and walk away.As someone said here,it's a luxury hobby.If it was food the situation could become very interesting.Look forward for this to happen.

You have just defined why the high end will and has been on a mission to kill itself. Competition is looked down upon and forbidden in general areas. We should be happy with them as retailers and not them with us as customers. Not all are like this but enough to bring us to sites as this. You will find those dealers willing to discount also saying to you not to reveal the discount because the manufacturer will pull the product from them or I cannot sell it to everyone for this amount.

I'm with Inna--I visited my "local" stereo shop last weekend and the sales guy (who I made arrangements with in 5 minutes over the phone) kept me on ice for an hour while he closed a five figure HT installation.

That said, on the plus side, I had called them and offered them a reasonable deal in cash for a display unit, and they said OK without whining. I doubt I could have done much better on A'gon, plus I got to walk out of the store with it. It did take them another hour to pack it and find the bits, however.

On the bad side, I rarely find good advice inside audio stores--even boutiques. I'm in the DC area and have only found one store owner/operator who I think is a stand up guy (I heartily recommend the Listening Room in Baltimore). Notably, I've bought several items from him and he has coincidentally done what he can--without my prompting and in one case where I was desperate and fully expecting to pay 100% of retail--to cut me a good deal. There are four other boutiques I can think of in the area, as well as three local or regional chains. One boutique I won't go into--the owner is rude and unscrupulous. The other three offer product lines that are exceedingly limited, and I haven't had occasion to want anything they offer. The local/regional chains are useless because every time they have told me something, its been wrong.

So, I do try to buy local when I can from store owners I respect. Then again, I don't really waste any time of the store owners that don't respect me anyway.

The way I see it is that SOMEBODY is buying new stuff. If this weren't the case then there wouldn't be "slightly used" product entering the used marketplace. I don't think that those of use who buy from Audiogon are JUST recycling used pieces although that does happen to some extent. From a certain standpoint, those of us who are buying used are actually helping the retailers by helping fund new purchases (this assumes that those who buy new don't have an endless source of funds ). I'm sure the retailers and some manufacturers would prefer that everybody buy new but where would all that used equipment go?

Dick

Consider this:

I have spent over $10,000 this year on audio equipment.
I will spend more than that in the coming year.

1. 100% of these purchases came from audiogon.
2. 80% of them involved dealers selling demos, closeouts or used equipment.
3. I would have spent NO money, if left to work within the current paradigm - exclusive dealerships selling at MSRP. And I mean NO money.

The health and potential of high end audio is most apparent on web-sites like audiogon. People who really love music and audio technology are willing to compete to own equipment at what they judge to be fair prices. This is a VERY viable business concept. And I am putting my money where my mouth is - as you are.

I would suggest that what you have done is to break out of a flawed paradigm for doing business and taken a step out into the brave new world. Guilt is always the price of breaking with tradition.

I applaud the dealers who are forward looking enough to work with Audiogon members. High end audio isn't dead - it is alive and well, right here.

You make it sound as if you didn't broach the subject of price with the stores you solicited bids from. Yes, better salespeople than you apparently worked with wouldn't have let you fly away so easily without a fight - a weak salesperson with stars in their eyes from a potential big-ticket deal will hold onto the dream of getting a full-boat sale even as it rides off into the sunset (despite the fact that 0% of MSRP isn't preferable to >0% of something real). But in my many years of being a retail salesperson, the customer behavior that still baffles me most (can't say surprises, as I expect it) is the almost total reluctance many customers display in simply letting the salesperson know what they want. Many otherwise friendly and open people seem to feel they must protect any information they have developed through comparitive shopping (and the criteria it has created in them) as if it was national security secrets or something. True, it is definitely the job of the competent salesperson to elicit this information from the customer so that they can better serve them, but it nevertheless amazes me that such a high percentage of otherwise intelligent and assertive customers are forever unwilling to recognize that they stand a much better chance of receiving what they want if they will simply ask for it. I don't know if this applies to your case or not, but I've never known a small business where management will refuse to work a deal below MSRP for a substantial package purchase (and frequently a much smaller purchase than that) if that's what it takes to make the sale.

Many good point posted so far. As far as a dealer asking full price on an item not in stock and therefore unavailable for audition, they only way I think one could justify this is if the return policy was generous (full money back).

Who would pay full MSRP for products that every one knows there are more than 50% mark up? For buying a car, the dealers certainly don't have 50% mark up and everyone negotiate the price for 5%-10% off. On top of the mark up, audio dealers don't carry the high dollar items in stock so they have to order the product for the buyer anyway. Therefore the dealers are the problem when they insist to sale products at the MSRP. You can figure that you may spend 5-10 hours auditioning the products before decide to buy, then the time you occupy the time could cost $300-$500. For an average price of high end audio of $3-4K, then the margin should be 25% or so. I don't think the comsumers are wasting the dealers' time. It is the other way around.

Profit margins vary greatly from market to market. Cosmetics, furs and jewlery can often reap 1000% profit margins. I think we're comparing apples to oranges here. Retailers are trying to gain the most money possible and buyers are trying to save the most money possible. That's just the nature of the game. Hopefully we can negotiate a deal that satisfies everyone.

I've been on both sides of the counter as salesman and consumer and here is my take:

Some store owners are total jerks - I lost several sales when working at a high-end downtown DC boutique because my cheapskate boss thought that giving a $50 discount on a $1,000 piece of gear (a lousy 5%) was too much. I'm sure that money walked right out the door and was spent somewhere else that afternoon.

Some shoppers are total jerks, too. They pick your brains, use up your time, and then buy used or shop your price all over town. That's life, a good salesman learns how to sniff out these worms early and broom 'em.

When I sold a full-boat system to a customer, I threw in the delivery and basic setup. They usually gave me a tip and everyone was happy. It also gave me a chance to scope out their house and see if they had any other entertainment needs that were unmet.

In addition, my retail-paying customers got free loaners if their equipment needed to be serviced and were allowed to take home equipment for demo, bargainers were out of luck. Plus, we'd even take in stuff on consignment to allow them to trade up. These should be the incentives for paying full-boat.

I think that if more store owners were willing to codify this stuff and show the customer how dealing with them has its advantages, they could close more sales of all types. Let the customer decide how much care they can afford and price the equipment on a sliding scale accordingly....

As someone who's been around hi-end retail sales for a good portion of my life, and who knows exactly what it takes to build very good to WORLD CLASS AUDIO/VIDEO SYSTEMS and environments, I can easily say that the way "Rogocop" has conducted his buying desissions has landed him AN INFERIOR AUDIO/VISUAL EXPERIENCE!!!!...as it does 99.999+ percent of the internet buying public! I don't care if someone reads every article and review ever printed, and takes every audio salesmans advice and "sucks his brain" for knowledge! It still won't help you end up with a quality experience!... NEVER HAS, NEVER WILL! How can I say that, you may ask? Even without knowing what he ended up with, who he delt with, and what he paid for his gear? ...SIMPLE!!!!... because, HE'S MISSING OUT HAVING SOMEONE WHO KNOWS WHAT HE'S DOING (LIKELY LIGHT YEARS BEYOND WHAT THE AUDIO NEWBIE CAN DO ON HIS OWN) PUT THE SYSTEM TOGETHER FOR HIM!!!
One of the major things I've learned from selling audio gear to people over the years is that YOU CANNOT REPLACE EXTENSIVE TIED AND TRUE KNOWLEDGE, EXPERIENCE, SKILL, DEDICATION, DESIRE, AND SERVICE!!! Yes, indeed buying things over the net takes the "people" out of sales! The end result is that any potential "team effort" goes away!
I've personally assembled over 1000 systems in my 20 years around this business. And I know without a shadow of a doubt, that the buying public is not getting what they think they are bargaining for!!
So, I ask you everyone here..."do you think it's a better deal by saving money shopping for gear on line?" "Is Rogocop getting a better deal by saving a bunch of money with on-line purchases?" If you ask me, I don't think so. Infact, I'm EXTREMELY CONFIDENT that, iF I was a retail salesman that Rogocop had purchased the same equipment from, and he paid me more than double what full retail price was, and he let me install the entire system, design the system out, place the gear, and basically make it all come together for him(with compromises even), that he would end up with EASILY 200% BETTER RESULTS AND EXPERIENCE!!...giving him a better quality of life experience day in and day out with his gear!!! ..In escense, a quality of life improvment far beyond what he could get "without the relationship"!!!!
So, for me, since service is where it's at, I wouldn't sweat the "net" any if I did retail!!! Because people REALLY AREN'T GETTING BETTER VALUE BECAUSE THERE'S MORE MONEY IN THE POCKET INNITIALLY! Infact, if these buyers, like "Rogocop" ever catch wind of what's the potential of an AV system to be had in a room, I think he might end up respending all over again!!!..and again...and again, if he wants a world class AV system some day, and insists on doing it the way he's chosen. My two cents....

Personally, I feel no obligation to subsidize local high-end dealers out of either some bizarre form of guilt or because, for some reverse-trickle-down, voo-doo-esque theory that I don't buy, I believe I am subsidizing the entire high-end industry. None whatsoever. The fact that there's a viable and vibrant market for used equipment means only that the market for equipment at all levels is and will remain viable and vibrant -- so (even if the middle-man is incapable of competing or surviving in an increasingly global market defined by consumers with unprecedented power to perpetuate the useful life and value of products through communicating with large groups of other consumers to trade and resell items) I can guarantee that manufacturers will find a way to continue getting their products to people who want them, as long as they continue to want them, even if they have to come up with new means to do so. I’ve bought a lot of equipment new from dealers, but now I almost exclusively buy used through Audiogon and other online sources. It’s a market economy, folks, best product for the best price takes the prize.

It’s just that simple. I could easily adopt a more apologist stance and reason that: (a) I would never, under any circumstances, purchase a Meridian CD player at anything less than used prices, (b) I considered Meridian only because there was a used market, (c) I got one, and (d) because I and people like me purchase used Meridian gear, the market is better able to support retail pricing due to the fact that the resale value is an inseparable component of the product -- so a viable used equipment market, in no small part, supports the hyper-inflated retail market. Also, cites like this one do at least as much to create desire and fuel the retail market as they detract from the retail market simply by increasing the knowledge and power of the consumer (which is what they do). But all of these arguments, any many more like them, though true on many levels, miss the essential truth -- best product for the best price wins. People’s conceptions of what is best may change from moment to moment, but if my personal conception of “best” happens to leave the local dealer out in the cold on any given day, so be it. I don’t see the need to rationalize or apologize for it.

When I walk into a shop just to check out how something sounds and with no serious intent to buy anything, that’s what I tell people. Simple, straighforward, no BS. Their decision as to how they want to spend their time with that info is their own. That said, I've walked into a store with that intention and walked out with new gear -- "best value" is fluid. No apologies.

If only it *were* two cents, foreverhifi2000... (or should we call you foreverhifi$200,000 ? ;^)

Well, a lot of similar themes spiced with a few dissonant contrarians. I thank you for all of them.

Without trying to defend myself to foreverhifi2000, let me say this about that.

The system I am ending up with is essentially the system spec'd. out by the retailers with a few major improvements. Because I have money in my pocket, and not in the retailers, from my web buys, I was able to to run my B&W Nautilus 801s (that I bought for $8k instead of $11)with a Mac 602 and the B&W center with a Mac 352 (mono) and my 4 surrounds with 2 Mac 352s instead of the MC206 which they spec'd. I was able to buy a Marantz VP 12S2 for $9k instead of the $13k I was quoted. The theater, acoustics and some equipment selections are being designed by Dennis Erskine of Design Cinema Privee. His skill and knowledge leaves anyone I talked to in a store in the dust. He's not Carl the installer who graduated from Bubba's Window Tinting and Car Stereo Shop to HT installs.

So, I'm not buying that I missed something in this experience or that as a penny pinching, short sighted newbie I failed to see the forest through the trees. I think I've maxxed out my dollar value pretty well. Without these savings I would not have been able to afford people like Dennis or the Mac 602 and and it's little cousin 352s.

Personally, I'm not a haggler for every nickel kind of guy. Sure I could have told these guys that I wasn't going to pay full retail, but I was already in the hole because of where the negotiations were starting from (MSRP). They'd would have made me feel like I was taking bread out of their kids' mouths for a few % discount, when with very little haggling, Audiogon sellers are selling at or near retailer's costs. I guess they saw a sucker coming through the door.

Someone asked if people know my margins... My answer - The ones who do their homework do. I respect them for it. And, in my market place I kill my competition because I give more value for the dollar than they do. Open up the Atlanta Journal Constitution Real Estate section on any Sunday and see my add "Dare to Compare at Carlyle Square". So honestly, I walk the talk.

This has been a blast! Thanks for the input.

Where else are negotiations supposed to start from besides MSRP? And there would be more bread in those dealers' kids' mouths had they sold you something. Far be it from me to get on anyone's case for buying through Audiogon, please don't get me wrong. And not everyone enjoys negotiations, and I understand that. But frankly, the discounts you got buying used on the 'net don't seem that far below what you might have gotten new with a warranty had you been game for a little bargaining. I'm glad it seems to have worked out for you, but don't be under any illusions that what you did wasn't using your local dealers for their demonstration facilities and advice, and then take your show on the road to sellers who didn't need that overhead expense to get your business.

Foreverhifi2000, your response cracked me up!

Beautiful parody of the egotistical self-righteous attitude that typifies why I so dislike high end stores! Very, very funny. You captured that I-know-so-much-more-than-you essence so well--you know, the whole thing that drives consumers like me away sooo fast. I just loved it.

The caps were a bit over the top tho'--kind of made you look like you were ranting or something.

If you are dropping $60k to $80k on a system, you SHOULD get at LEAST a 20% discount off of MSRP from a dealer. Especially if that dealer is doing the installation.

This is what I would suggest:

Contact:
http://www.sounddecisionsllc.com/contact_us/contact_us_1.htm

These guys are located in Birmingham, AL which is not that far from you. I used to work for them and they do great work.

They should give you a quote of at least 20% off MSRP (especially if they do the installation).

Let me know how things work out.

You can email me at: tok20000@aol.com
AOL is bouncing emails from Audiogon and it is driving me nuts.

Sincerely,

KF

Zaikesman,

Believe or not, I went into the stores hoping to find quality products and expert advice at competitive prices. Had I been able to do this I would have bought new and paid more. No problemo. What I found was quality products (with a unwavering bias towards that which they sold), varying degrees of expertise (from brilliant and impassioned (I really liked him because of his obvious love of his craft) to someone who didn't know the difference between the gain control and crossover switch on a Velodyne sub. (He kept insisting the switch (the gain) was fully turned up when I asked him what frequency it was crossing with the mains.) and laughable prices. It was only at that point when I had real bids in my hands that I thought of looking seriously at alternative markets. I stopped going by the stores, although now the salesmen keep calling wanting to "earn my business". I don't waste anyoneone's time intentionally.

Tok20000

Thanks for the suggestion about your friends in Birmingham. At this point though, I am much further down the road with all the amps, processors, speakers (except surrounds), & projectors I need. (I really was a ready, willing and able buyer when I walked into the retail stores). I will stop over there next trip, meet them and keep them in mind for other fututre needs.

I appreciate the suggestion.

It's becoming quite clear that the Internet does a much better job serving niche markets than bricks-and-mortar stores do. Sure, the local guy can theoretically provide more "service," but how much service do audiophiles need? Home theater design and installation is a different case, which is why the local guys who are still around are getting into it as fast as they can.

Believe it or not, I had a much longer diatribe written out detailing my growing contempt for the actions of some who have posted here. But then, I figured it would be lost on the very ones who most deserve it.

I buy both new and used equipment. I don't waste the time of dealers sitting in their showrooms for hours while I decide their equipment is what I want (nor do I take their bids on systems and use them as my shopping list) and then purchase the equipment elsewhere without giving the dealer every opportunity to win your business. Those who feel guilty about this conduct should. Those who don't are beyond any words that I could write.

It was posted several times how the margins are so outrageous in hi-end audio. Some have shown their ignorance of what is the typical margin for hi-end audio. The more informed at least understand that the margin on other luxury items is many times that of hi-end audio electronics.

Not one person has mentioned the designer. Does he/she not deserve compensation for the years of education and lab work to develop these products? If any of you could design and build a product that was worthy of ownership, you might understand, but I'm sure this point is lost on all but a very few. Might I suggest that some should read "Atlas Shrugged"? If you want mass market prices, then stop complaining and go back to purchasing mass market equipment.

All I've read are the rationalizations of people who want to be patted on the back for having not paid retail. Guess what? In all seriousness, Congratulations! I've got no problem with that at all. ( Sorry, but I've got to vent a little. I can't think of anything more annoying than hearing excuses for not having more money to spend because of kids or potential marital strife that might ensue. It is your life! You chose who you married, and chose to have kids and the obligations that are your responsibility. Why do you think anyone else cares? Do people understand the less-than-admirable impression it gives of your spouse, or of an underlying resentment towards your kids? Sorry, Stn. I don't intend to be picking on you personally, but you just happened to mention both of my pet peeves. I'm sure that neither inference is true in your case. What's wrong with simply stating that one has only a certain amount of money to spend, and leave it at that?)

However, I must suggest a concept that appears to be forgotten- it is important how one plays the game. These are more the actions of those in elementary school cheating on the quiz by looking over the shoulders of those with the answers, and then expecting congratulations for a score (or system) unearned and likely under appreciated. The truly sad thing is that it was an open-book test!

Most of the "answers" are available free, right here and on other similar sites, from audiophiles who are glad to share their acquired expertise. If you aren't going to support the brick & mortar, then stop wasting their time. Don't go in and touch and see and hear their equipment and systems. Don't ask their opinions and advice. Getting good prices is a two-way street. Your openness and genuine interest, and yes, your developed relationship with a dealer will insure better deals.

I left retail (selling mid-fi and entry hi-end no less) 20 years ago when I finished college. I'm glad you've reminded me why dealing with the public was such a double-edged experience. I'm sure my comments may ruffle some feathers, but there didn't seem to be sufficient representation of the contrary position. As always, just one contrary man's opinion.

No, Jcbtubes, rest assured it's not only your opinion. You've saved me the trouble of reiterating several of your points. All I want to 'add' is to make explicit the connection between your accurately-observed comments, "All I've read are the rationalizations of people who want to be patted on the back for not having paid retail" and "Those who feel guilty about this conduct [using dealers' expertise, facilities, and time auditioning and selecting, only to go buy used or on the web], should [feel guilty]".

Rogocop, what else are we supposed to conclude about you? You offer multiple insincere gratuitous rationalizations (the burn-in nonsense, Carl and Bubba, the fact that a few of the people you dealt with were not up to snuff, the fact that the first price a shop wants to get is MSRP). You pretend to solicit input about your actions after they have been taken, then attempt to defend yourself by blaming others. The only reasons I can imagine why someone would even post a thread like yours is out of guilt or pride, or likely a combination of the two in your case.

I mean, have you honestly asked yourself why you are telling the forum about this? Do you really think it's going to be news to anyone here that one can buy gear more cheaply on Audiogon, or that dealers want to get a premium for their services? This thread reminds me of nothing so much as a certain one from several months back (which shall go unamed - those of you who were there will know to what I refer) wherein a member (who seems not to post anymore) posted an after-the-fact 'query' seeking justification and kudos for having threatened their dealer with the return of an amplifier if the dealer didn't cough up a free aftermarket power cord, since the member alleged that he was 'outraged' that he 'just discovered' from the dealer that he would 'have to' spend another few hundred bucks to upgrade an 'inferior' stock cord if he wanted best performance, after having just spent thousands on the amp (the kicker was that he had previously posted more than one thread seeking advice on power cord choices, in conjunction with asking about different amps). It's always amazing, even if not surprising, how the prospect of spending money can make even those who have it act like children. At least that guy didn't totally waste his dealer's time, just ours - you've done both.

Yes Rogocop, maybe the dealers played it wrong by first giving you full-boat bids and then seeking to recontact you afterwards, presumably to try and 'earn' your business through a price break. But I know from experience that the only way this would have happened is if the customer appeared not to mind the prospect of paying retail. Many shoppers enjoy projecting the image of someone to whom price is no object until the critical point in the deal is reached, at which time they will lay down their demand and walk away, leaving it to the dealer to try to rescue their large ticket after having put in all their work under the impression that a deal was in the offing. It's a buying strategy that salespeople dislike but expect (although they don't really know if it's coming or whether the customer is actually willing to pay retail) - only you didn't call the bluff or lay down your cards, by refusing to make a counter-offer or take their calls. I am sure that had you acted more like an average customer, and made some mentions of price and/or that you were shopping around, during your auditioning interactions at the shops, you would not have gotten back full-boat bids. Any business owner is perfectly well aware that one of a customer's primary motivations in soliciting multiple bids on the same or similar products and services is to get the lowest price, and since you declined to let them even try, I have a hard time believing you now when you say that it wasn't your intention to leave and buy used all along. Sorry, but either that makes more sense than your story, or you're too naive to be a man in your position - and I don't believe that.

You have nothing to be self-righteous about and nothing to brag about, save for your new system, so enjoy it; I can only hope for your sake that your own business' customers are better as such than you were, or that you and/or your salespeople are better as such than those you dealt with (or at least as forbearing). But you'll probably feel better about yourself if you own up honestly to what you did and reform your shopping habits in the future (hint: either skip the dealer entirely, or give them an even chance at your business). That's your 'reality check'.

P.S. - Edesilva, you da man!

Hope you don't mind a slight detour question -- it's related to the thread. If I buy a component through the used, internet market and the component at some point needs servicing by the manufacturer, and if the manufacturer requires me to take the unit to a local dealer for shipping rather than having me ship the unit directly to the manufacturer -- how does this affect the dealer? Does the dealer get a commission for handling the transaction? Are there any negative impacts on the dealer I should be concerned about? Thanks.

Jcbtubes...great point...and one I failed to mention...the majority of cost in hi-end products are R&D and labour...not material costs...you are essentially buying a hand-made product by very skilled engineers...these are the "intangibles" when buying good gear...many newbies balk when looking at 2k monitors for example...but when u factor in design,quality,and performance...it begins to make more sense...Are all hi-end products deserving of a high pricetag? Ofcourse not...there will always be inflated products that offer sub-par performance...but those that have done research...or encounter an educated sales rep(there are still some out there)...will avoid these pitfalls...

Also...buying very hi-end audio/video is like buying any luxury item...if the buyer and seller cant strike a deal...the consumer walks...that is his perogative...there is no need to bash the dealer for not meeting your price...or for complaining that the margins are 2 high...nobody is putting a gun to your head to buy this stuff///

Phasecorrect, Although I agree with you in principle, in practice it doesn't work this way.

In principle: Dealer makes offer, I decline because it is too high and we part friends.

In practice: Dealer does not want to make offer, when I decline I am treated with contempt unlike anything I have ever been subject to in the retail market. I am also blackballed because the dealer knows I can get a better price. I think you may be underestimating how DEEPLY dealers resent the internet / used market.

I see a mounting crisis that is probably headed for the courts.

Judit,
You should continue to buy used or internet only, and stick to advice and information from internet forums. This is your choice. The serious contradiction is when you try to use a dealer's knowledge and facilities for auditioning, then go elsewhere to buy cheaper.
As long as you are fine with the downsides of the internet, go for it; just act ethically relative to dealers. I can't blame any dealer for acting contemptuous after you spend time listening and then go into a bidding game. You are listening to a piece of equipment that the dealer had to purchase; it isn't on consignment from the manufacturer. Usually the MSRP is determined by the manufacturer as the fair value of his time and labor, plus sales costs (i.e. dealer costs).

Judit...point well taken...but if price is your motivating factor...why even bother with a dealer? Yes there is a premium for service...but a good dealer will stand behind their products if something goes south...there is always an element of risk when going used off the internet...or used in general...my local dealer has tons of used equipment on consignment...for which they take 25%...there are also very few established hi-end brands that allow internet sales of new equipment...this is a tightly guarded industry and word travels fast concerning unauthorized gear...I dont think used equipment is hurting the industry...afterall...this stuff was once new...and there has always been a used market and will always continue to be...whats hurting hi-end dealers is the improvment of midfi priced equipment such as Paradigm,etc,the overwhelming interest in HT...AND the fact that many smaller, esoteric makers have decided to by-pass dealers all together and go the internet direct sales route approach ...such as HSU subs,etc...

Phasecorrect and Flex,

Please note, the higher the cost of the item the more likely I am to seek safe haven in a dealer. I do not wish to be an "INTERNET ONLY" customer.

I do not agree that negotiating with a dealer for price is improper or inappropriate. Every valuable thing you buy with significant resale value is acquired in this manner - cars, boats, homes, diamonds ...

The high end appears to be going competitive. I truly wonder if the exclusive dealership concept can survive.

High end audio is composed primarily of garage size ventures, plus a few handfuls of medium sized companies.

The typical product made by a high end company sells a few hundred units per year. A runaway success is something that sells over a thousand units a year, worldwide.

Lets say the product price is $8000, 400 units are sold, and the manufacturer gets %40 at wholesale. This means the manufacturer gets $1.2 million, to pay all his materials costs, factory and fabrication, salaries, shipping, and a marketing rep. That leaves $1.92 million at full MSRP to be split among his 20 or so worldwide dealerships, or about $100,000 profit per dealership - again, to pay salaries and overhead.

My figures are undoubtedly wrong in particulars, but where in this tiny, eclectic, highly specialized market do you see room for agressive negotiation and competition? If there is much of it, high end can only be seriously hurt, and the mass market will happily move in.

If independent dealerships were to disappear, I suspect high end audio would die at the same time.

This is somewhat relative...remember when dealer demos were 25% off? Well...those times are long gone. In today's market place...demos prices are well below that...often less than 10%...the point being...with competitive hand made cheap labour from around the world...companies simply dont have the margins they used to have...very simply:the competition is fierce...and yes this does not apply to every product in every market...but by and large...these are not mass market products...with a product such as NAD...dealers have more room to work with than say a company like MEadowlark(these are just examples)...and yes a premium still exists...but remember... a local dealer is not only where you find certain brands...but where you can A/B brands...and walk out with a product that day...convenience comes with a price...

Flex, In response to your question

"where in this tiny,eclectic, highly specialized market do you see room for agressive negotiation and competition"?

Consider this:

1. The paradigm for really successful internet business has already been established:

If you visit the web site strikingitrich.com you will find a discussion of the top ten websites that have made web entrepreneurs rich beyond their wildest dreams. Audiogon has hit upon their underlying recipe with a vengeance - provide customers with reliable information, LOTS of it for free, with no obligation to buy, find a way for the customer's opinion to REALLY matter (this breeds trust), then provide CHOICE, along with a sense that the customer is getting the maximum for his dollar. If you visit any of these websites, you will see how much Audiogon has in common with them.

2. The internet brings new customers AND new money to bear. Instead of setting up a zero sum game between audio manufacturers (e.g.will I buy B&Ws or Avalons), the internet sets up a zero sum game with other luxury items (will I buy high end audio or a Jacuzzi?).

Exclusive dealerships are not configured to take proper advantage of the paradigm for expanded customer base and $$$ that the internet offers. I contend that this new money is real - look at the number of posts here where people want to talk to savvy experienced buyers/listeners and then start building new systems.

If there is one thing that we have learned from the past few years on the internet, it is that some things can be sold this way, some cannot. Remember the dot com bubble?

Audio on the internet is a by-product of the established 2-channel dealer-based market, and dealers can use it to their advantage by setting up a good brick-and-mortar based website. However, high end audio *systems* cannot exist on the exclusive basis of internet distribution. Word of mouth is nowhere near good enough to convince an entire new generation of buyers to get into something they've never heard. I would think this is completely self-evident. There is no sensible internet-based business model for high end systems.

Dealerships offer numerous advantages: a place to audition combinations of equipment that you want to hear together ( I have traveled 2000 miles in order to hear specific equipment together in one place), warranty and repair service (often free even beyond the warranty), trade-ins/ups, advice (find the right people and its good), good contact with the manufacturer (often), and increasingly excellent sound rooms for listening, with experience on sound room building and optimization.

You can get pieces of this information, in greater depth, from entrepeneurs and internet forums, and that is good. Education serves everyone's best interests, though much of what is in forums is just opinion.

As far as jacuzzis vs. audio, Judit you're in the wrong forum.

I am awed by the innate insights of Zaikesman into the depths of my psyche. I no longer feel the need to pay my analyst to help me figure out why I like cigars - I'm sure he already knows.

I laugh at the suggestion of insincere, gratuitous ratinalizations. Tell me forum - I don't know this- Is burn in BS or not? The only place I ever heard about this concept is on this site. ">>>>XXXX brand sounded so much better after burn in." Do I believe it? I don't know. I haven't ever bought any equipment that offered burn in as a concept. But, I do know a lot of people on this site swear buy it. I tend think it may be a bit of fine hair splitting - but I don't know. Does it matter in this context? Of course not.

Zaikesman - Have you ever bought a new car on the internet? With your ethics and integrity I'm sure you didn't test drive it at a dealer before you did. You just bought it via the web because you read some neat review from car buffs on Cardiogon.com. And your E&I must also cause you to only buy used equipment on the web that you have never heard or that you heard at a friend's house. Because if you heard it at a store and spent time with the dealer, you would you been wasting his time and I know you're not that kind of person. You know the difference in price between buying a new car at a dealer and buying one through the web or some purchasing company is only a thousand or so dollars. The pricing differential between the web and these stores was many times more than that- new to new, apples to apples. I didn't even consider used as an alterative until they sent me into sticker shock. Is a saleperson's time spent with me (3-4 hours total at the very most - I spent somewhere near that much time on each individual item I bought here on Audiogon.) worth $30,000 on a $85,000 purchase? If you think so Zaikesman, then you're either more naive or disengenuos then me. I would love to quote a price on my products that was based on huge profits to me, but I've come to learn that real prospects are tough to come buy and I'd reather give them a great price and leave a few $$ of my profit on the table so they don't go looking somewhere else.

Did I mislead the stores into believing I'd be delighted to full MSRP. No. I told them up front that I was new to the hobby, talking to a few places and ready to do something.

I asked this question not to brag or seek penance, but to stretch me to consider perspectives other than my own. As I said in earlier posts, I appreciate the thoughtful responses, even the ones that sought more information as to my motives. Personal attacks, on the other hand without recognotion of today's global marketplace, sound like the sour grapes from an out of touch MSRP salesman to me.

Learning about a new expensive hobby is just that - A learning experience. I don't have many and I don't do new ones very often. Thanks for the continuing education one and all - even Zaikesman.

Rogocop,

"Personal attacks without recognition of today's global marketplace, sound like sour grapes from an out of touch MSRP salesman to me".

Thankyou. Amen.

Flex,

I think you incorrectly profile the average internet customer. Robocop has hit the nail on the head in a very objective way. We are dealing with a global marketplace, and there is no going back.

I also think that my original post is flawed. It betrays my own frustration at being caught in the middle of the shifting business paradigm.

I bought every single piece of gear I own on the internet. Not once did I ever even go into any high end dealer to audition or see any of the equipment. I don't go into those places. I'd rather go to the dentist, than into a high end audio store. And I don't ever even pick up an audio magazine, although I have been known to read excerpts of reviews on websites. I get all my reviews from "word of mouth", directly from actual users who also have alot of experience. Even on this website, there is alot of valuable information, if you have the insight to be able to sift out the gems from the coal.

Many might ask,"How do you know what will sound best?" That's an interesting question. Isn't it? The answer is I've had many years of experience to show me what is a good audio design, and system concept, and what isn't. If I make a wrong purchase, I can re-sell it, if I don't like it. That has only happened to me once, and I went against my better judgment in the optimistic hope that buying a good digital player could compete with analog. I have now sold that item, and all my other choices were right in the bull's eye. I have enough experience to tell pretty close what a piece of gear will sound like before it is even turned on. I don't need a salesman. I just need a venue to purchase the equipment I know that I want to buy.

What I find really interesting about this, is that by using this method, I ended up with an extraordinarily musical system, which has virtually no well-known products in it. Some of the products I do have that are now well-known, like the Teres and Shelter 501, were virtually unknown to most audiophiles when I got them, and alot of the visibility that has arisen about them on this website, is from my activity in telling you all about them. I found out about them through other means, and tried them out, and was delighted, because the recommendations came from people that were deep into this hobby, and knew of things that most don't. So now I have one of the most unusual systems on this website, and it is a very capable one, to my ears.

And none of it came from a dealer, and most of it cannot even be gotten from a dealer. Some of it, I had to build myself, or have it custom built. It all came from internet sales. And that is the way I will continue to operate.

It's funny when I read the posts about the concerns of people wasting the dealer's time, and buying on the internet to save money. I think that going to a dealer is a waste of MY time. I don't buy on the internet to save money. I do it to get a higher level of performance that the dealers don't even know about. When I go to a dealer, I feel like I'm in Best Buy or Circuit City. They don't even have anything I'd want.

As far as warranty service, that's a joke. The service they provide is that they will box it up and send it off to the manufacturer, instead of you boxing it up and sending it. Big deal. And just FYI, none of my equipment has needed boxing up and sending back. So that means nothing to me. I don't need their set up advice, because I already know how to set my stuff up fine, thank you very much. So all they are to me is an annoyance, and a money pit for 25% to 50% of what I have to spend.

And I agree with in-home auditions, like has been stated by others, and this can be done by internet sellers as well as dealers. I have gotten product to audition from internet vendors, and sent it back unpurchased, just like anyone else would do from a dealer. Primarily cables. And I have gotten stuff sent to me from audiophile friends who wanted me to hear something that they thought I might like in my system. And I have done the same for them. These people are not interested in selling me anything, or telling me that I should trade in my custom 45 SE ZOTL for the latest gear on the glossy brochure. They want to help me to achieve MY goals with MY system. Not exchange my gear for the latest products of the month, that will put money in their pockets, with little or no concern that my system performance may suffer as a result. As soon as they can make that cash register go "Ka-ching", they are ready to go on to the next victim.

I understand that my circumstances are different than many others', but this is the way I choose to operate. Other people may need/want dealers to sell them things. I don't. I just want my system to work the way I want it to, and dealers are not part of that process for me.

Rogocop, your admission that you are new to this hobby, had I known, would have caused me to somewhat temper my criticism (and I never said the dealers were blameless in your case). But neither that fact nor your further attempts at excusing yourself fundamentally change anything though - I stand by what I said, but find your actions maybe a little more understandable as a neophyte. You did what you did, and my guess is you've learned from it already. You might not be back to the dealers regardless, which is fine, but if you do return someday to the one you said you liked, why not give him a fair shot at earning you patronage, instead of just using him and splitting? Just so you know, my own system has been assembled as a mix of new, demo, and used gear, roughly in equal proportions. I do not spend any time in dealers' shops unless I am there to buy something (in other words, as rarely as I can manage), and have never auditioned anything in a store that I later purchased used on the net or anywhere else. I have gone to audiophiles' homes to audition stuff they were selling that I didn't ultimately buy because I didn't prefer it, and will occasionally indulge in listening to something or other at a dealers' if I am in there to purchase something else anyway, but that's about it. If there ever comes a time where I have used a dealer's resources to aid in choosing a piece of gear that I might buy used, I would certainly give the dealer every opportunity to compete for my business, but I really plan on basically avoiding this conflict of interests to begin with. I'm not "out of touch" or an "MSRP salesman", whatever that means (did you skip over all my posts refering to price negotiation, something which is part and parcel of my job?), and neither do I see myself as some kind of saint, I simply have a strong aversion to wasting either a store's time (and being in sales undoubtedly has a lot to do with that fact), or as Twl says, my own.

One of the main advantages of Audiogon for me has been the ability to buy gear used, bring into my system for a long-term evaluation, and then sell it again at basically no loss if I don't want to keep it. This has many advantages when it comes to really getting to know about a piece of gear, but it's a hit-and-miss way to go about building a system, and is definitely not for everyone, especially newbies who desire to assemble everything at once. It's a process that can take years and be in effect ongoing, but is an activity which can be enjoyed in its own right for someone who just likes playing around with gear from time to time. On the other hand, if I had any interest in purchasing a complete HT system and installation, I think I'd just find a dealer I liked and let them handle everything, and I say that as someone who sold new HT systems back in its simpler days. (Oh, and BTW, I've never bought a new car period [total waste of money], and don't go 'test driving' at dealerships for fun or otherwise, though I've assisted others in the process.) 'Psychoanalyzing' a customer, be it you, me, or anyone, really isn't hard when you've dealt with thousands over the years - the same (few in number) basic motivations and behaviors apply universally, and are known to any competent salesperson, so neither my 'insights' nor your reactions are reason to be 'awed' (even sarcastically), and there's no need for either of us to take them personally (which I commend you for seeming not to have done). Anyway, you said you felt guilty right at the top, and have de facto bragged on how much you saved - it doesn't exactly take a rocket scientist to catch your drift in making this thread, and you know it too. It's not a crime, and you haven't done me wrong, you only (as you say) sought my perspective, and you got it. After you've been at this for a while, it just might become your perspective too. And welcome to the Audiogon forum!

Zaikesman, I like you better already. I like being in the kitchen and can generally stand the heat.

I'm not sure how you can know that avoiding the HT package store route is the way to go until you've done it one time and have learned about the gross disparities in pricing and seeming lack of value relative to markups. I've done it once and won't do it again. However, I must say that I'm far happier having learned this lesson without having it cost me $30k more than it needed to.

I think the normal purchasing pattern for most people still starts out at the retail store level and then, as interest and seriousness increase, advances for some to the internet. I don't think most people start out on the web and move to the stores. Maybe I'm wrong.

Anywho, thanks for getting back to me and I hope to get to know you better here on A'gon.

Peace pipe accepted. I generally try to be as much of a Dr. Jeckyl as I can around here, but can go into Mr. Hyde mode when it comes to poor sales practices, for self-evident reasons, so I guess I'm also likely to be set off if I think one of the few decent salesman in this hobby got stiffed. I probably shouldn't though - as I've stated on this forum before, rule #1 is The Customer Is Always Right, and rule #2 is If The Customer Is Wrong, See Rule Number One. It's ultimately the salesman's sole responsibility to reel in guys like you, no excuses.

Just to touch upon certain issues raised by Judith & others -- a bit late in the day (as usual). I'll give a small European perspective (basically Paris, & London, with some experience of Brussels & Athens).
Until recently, we had important price cross-country price differentials and "exclusive dealerships". Certain products were unattainable for many of us at the "local" prices; they could have been attainable at the going prices in another country... The local market was, in a way, protected by difficulties in cross-border trading, currencies, etc etc.

The EU changed that and the Internet simply accelerated the change. Prices are now mainly comparable, and the need to provide added value for price differentials is obvious...

**Buying used/cheaper; this is NOT the issue, we always had the opportunity to do that and we did that: newsletters, dealers, etc catered to that. The difference NOW is that the Internet not ONLY widens the buyers' choices but also makes them FAR REACHING -- going well beyond the geographical confines of local stores/national retail network. Once, we couldn't buy an 200watt XYZ used unless our local dealers had it; now we can, from wherever thru the Net... used OR new!

**Dealers: the Internet simply changes their role from convenience (geographical, familiarity or otherwise) to providers of a fuller service. The Net urges the need to to provide OBVIOUS, perceived, added-value for the price differential... if people are to pay for it. OTOH, many dealers are Internet savvy and use its facilities to reach more customers (a great way to sell your trade-in items, for example). So, it looks more like a solution than a problem; after all, getting & keeping a customer has always been a primary aspect of boutique retailing -- it's all the more so now!

**Manufacturers: good point. They needed a distribution network to provide direct contact with potential buyers & service for their products. It used to be said that manufacturers do NOT get the best deal because the cost of distributing (i.e. the importer/dealers network) required a mark-up of ~100% (=margin 50%), whereas the actual creator of the object got less per unit... I suspect, but do not actually know, that such was (is) the case -- at least for the smaller manufacturers. The direct manufacturing cost-to-retail price ratio used to be 1:7-12, not including the intagibles (r&d, designing, testing facilities, etc, etc). How much of that ended in the actual manufacturers' pockets I don't know -- not much per unit, I expect, if you deduct the cost of the sales network & add all the intagibles... so it was (is) a volume game with manufacturers. Hence certain manufacturers have turned to the Internet to do business...

Having said all this, I have bought most of my stuff through retailers probably because I got service, reasonable prices, equip loans, and help with payment. One exception: a pair a german active stats I once had cost $~16k where I was living & $~9k retail in Germany (Germany being ~500miles away). I drove to Germany & purchased them, with the benediction of the local dealer (who arranged to service them anyway)! So, of course, I purchased the new pre from that dealer, didn't I...

How cool is it to receive real time global perspectives!!!

The still untapped potential of the internet is one of the great possibilities of the 21st century.

Thanks Gregm for adding your two Euros to the conversation.