Buy from a Dealer or buy Direct?

[RobHolt]

There is one part of the business that at the moment does not suit direct to market and that is far distance selling, for example from the UK to Far East, Australasia, The Americas. Service is a problem and shipping damage on individual items is a problem. My model so far has only worked for the EU, even Norway is PITA because it is outside the EU. At the moment not counting cables and only looking at amps and speakers about 50% is UK about 20% is Italy and about 20% the rest of Europe and less than 10% other markets.

So I think the model for these distance markets is to get a distributor who will then sell direct within his market. So I am going to do the Whittlebury Hall show to pick some up.

Yes indeed, that is very important if your market is not mainly EU based.
But you can split your sales and distribution methods within the business for very different products with different markets. While the market is clearly moving towards direct selling we will be running in a two-way system form some time yet - particularly if you want to sell globally. No reason why you cannot ride two horses, with the proviso that you don't end up with the same product available through both channels as that would potentially be extremely unfair on the customer.

The image of dealers hopping on planes I find amusing - though I guess if you are spending say north of £20k on a new system it is fair enough and must happen, though to the vast majority of customers in the real world, with real world budgets it just isn't going to happen.

 

[Purite Audio]

Better do Munich if you are hoping for some global distribution, I can't see many travelling to Whittlebury Hall! Perhaps the odd Welsh man !
Keith.

 

[flatpopely]

Yes indeed, that is very important if your market is not mainly EU based.
But you can split your sales and distribution methods within the business for very different products with different markets.

Agreed but if selling the same ones then there is the potential for trouble. We have run into this a few times with American manufacturers who sell direct in the states (using the rep model) and then want distribution in other countries. Unfortunaltely they forget that a distributor needs at least 30% if selling direct and 50% if reselling via a dealer, as the dealer requires 25-30%. The product profit margin and market placement get blown out of the water when the original 7% they gave reps is increased to 30-50%. At this point grey importing is inevitable especially if one can buy the product direct using e-buying. A distributor has to hold stock, provide credit, pay staff, have premises etc. this is not achievable on anything less than 30%, remember that's gross margin not net profit. This is what I do for a living, its just the cold hard facts of commerce.

 

[Richard Dunn]

Yes indeed, that is very important if your market is not mainly EU based.
But you can split your sales and distribution methods within the business for very different products with different markets. While the market is clearly moving towards direct selling we will be running in a two-way system form some time yet - particularly if you want to sell globally. No reason why you cannot ride two horses, with the proviso that you don't end up with the same product available through both channels as that would potentially be extremely unfair on the customer.

The image of dealers hopping on planes I find amusing - though I guess if you are spending say north of £20k on a new system it is fair enough and must happen, though to the vast majority of customers in the real world, with real world budgets it just isn't going to happen.

There is no need for different product, the custmomers price will be a little higher in distance markets, but if they buy direct it will be anyway with import duty and shipping costs. It just means giving the overseas direct sellers a margin to work with over the UK price.

 

[nando]

i only sell to the u.k. for example, the furthest i have being to a customers place up norh was scotland, not via a plane, south was monmouth and weymouth, midlands as well, lovelly to get out of london for a change, and super weekends,
nando.

 

[Richard Dunn]

Better do Munich if you are hoping for some global distribution, I can't see many travelling to Whittlebury Hall! Perhaps the odd Welsh man !
Keith.

It seems last year there were many there and this year Chester Group are making an effort to support them providing transport and hotel arrangements, and anyway Munich is ridiculously expensive. I would do it if I was in a heavy expansion mode or wanted to be a big company, but I am happy as I am. No debt (everything is paid up front), next to no overheads, no borrowing, minimal admin, as it is all very easy via ebay and paypal. No giving credit and waiting to be paid by retailers . So why should I change things and invest into a dying market on the verge of a serious global recession very sensible.

That is the point of the new market and many of you bodgers and tweakers could do it as well and the more the merrier. Just don't make the mistake of expecting dying retailers to sell and support your product, they have enough problems just trying to survive

 

[sq225917]

To go back to the original topic- pros and cons.

Dealerro
Local
Human (vertebrate definitely)
Coffee
Potential immediate availability
Potential demo
Comparative demo
Few surprises
Maybe a source of 'impartial' advice ( and maybe a free blowjob as well)
An interface for service and warranty.

Dealer:Con
Rude
Fucking stupid
Overpriced
Desperate to bleed you for his failing business
Limited stock
Tilted demo
Will sell you in-stock over order-in items.

Directro
Sometimes better VFM
Potentially better availability.
More knowledgeable.
Sales or return potentially extended home demo
Faster warranty.

Direct: Con
Understaffed.
Not always better VFM.
Poor gear availability- waiting lists.
No local set-up help.
Re-stock fee potential. (that twat AJ)
Limited warranty


There are few hard and fixed truths about it other than going direct could potentially be cheaper, and going direct will help kill off dealers.