Why are dealers so scared to sell product out of


state. I was calling a few dealers out of state looking for better pricing on a product. Another reason I'm trying to buy out of state is to save the high sales tax in Southern California. A couple of dealers I talked to refused to sell product out of state.They said they have an agreement with the distributor not to sell out of state. It's amazing how distributors have such a hold on the retailer. High-end audio Isn't exactly setting the world on fire yet they have all these restrictions for the retailer. I can buy a rolex watch out of state or even a ferrari. Why can't I buy audio equipment out of state if I choose to? Yes, I know there are mail order companies that carry lines they can sell across state lines. The problem is these firms sell at list price and I'm not going to pay list for anything including audio equipment.
taters

Showing 2 responses by pgawan2b

Brand recognition! Rolex and Ferrari (your examples) are well established and world renown brands. Building brand recognition costs $$$. B&M stores can be good for building brands. If you have already established your brand and therefore have brand recognition, then maybe the direct sales method (web) may work.

Also, contrary to popular thought, B&M stores as a means for audio sales is not dead. Is it changing? Yes, but it is not dead. I would argue that, like every other business, the B&M stores existing today are in locations which still support their existence. This is an example of the laws of supply and demand. Perhaps fewer dealers have larger territories than before.

Sales tax is irrelevant. You are required to pay it regardless of where you purchase it. Thank you Br3098 for stating this. I wasn't sure about CA but I know it is true for my state.

Finally, I echo Tpreaves statement. The reason dealers won't sell out of state is because they are honoring the agreements they signed with the manufacturers/suppliers.
ZD542, I assume you are referring to the manufacturer's markup and not the dealer's, right?

Bifwynne, I imagine the dealer probably buys the product from the manufacturer at a 30% discount. This leaves a 10% markup for the manufacturer. When the dealer sells the product to you at a 20% discount, he too is making a 10% markup. Shipping and insurance can be costly so unless the dealer passes this additional cost directly on to you, it can really eat in to his markup.