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 6 responses by rogocop

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.
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.
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.
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.
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.