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
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.