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Retail Buying - Reality Check

Like all of you at some point in time, I caught the Audio and HT bug. I started out at the usual places - Hi Fi Buys, Best Buys, etc. and moved on to the niche, locally owned hi end audio and HT boutiques. There I met generally more knowledgeable salesmen (no women yet). I also started doing my homework out on the web and came upon great sites like Audiogon and AVS Forum to name a few.

Your knowledge and experience has been invaluable to me. Unfettered by the product lines you have to sell, you provide a far more level playing field of unbiased opinion.

Here's my dilemma: I am a small business owner myself, and I value local market presence and customer relations. I'm even willing to pay a small premium for this intangible. However, when the quotes came back from 3 different retailers in Atlanta ($65 -80k), they were all for MSRP plus tax plus design install and misc. such as clips and straps ($250-$500 worth!)

Now most of the hi end equipment today has "burn in" periods of several to hundreds of hours before peak operating performance is obtained. So, buying new at full MSRP also meant getting inferior performance for the necessary burn times. So no big benefit (except some warranties) to buy new.

By purchasing from sellers on sites like Audiogon, and purchasing nearly new or sometimes new products, I have saved $16,000 plus $1,000 in sales taxes on approximately $50,000 of my quoted MSRP prices. I'm not done yet. I also have the flexibility of buying the exact product line I want, not just what my store has to offer. There is great pressure in the retail setting to go "one stop shopping" at your store of choice.

I understand these stores need to make a profit. However, 50% markups on items that they don't keep in stock and have to special order, seems out of line to me.

Caveat emptor is certainly a key consideration in on-line purchasing, but to date, through careful checking of prior seller transactions, prudent payment techniques and telephone conversations with the seller to allow me to make some kind of character call, I have had nothing but outstanding, as promised transactions.

I hired a HT acoustical designer and a certified installer and I couldn't be happier, except for one thing. I still feel a little guilty about not buying from the guy with the storefront who spent time with me. I just wish they'd recognize where they do and don't add value and charge accordingly.

Anyway thanks guys, for the great education and advice you've provided me.

What say you?
rogocop

Showing 5 responses by judit

judit
217 posts
 

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.
judit
217 posts
 
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
217 posts
 
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.
judit
217 posts
 
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.
judit
217 posts
 
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.
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