HiFi Dealers, good or bad.

[SCIDB]

Hi,

Lets start a debate about Hifi dealers.

With the rise of the internet do people still think they are as valid as before?
Do people think they are a dying breed?
Do they offer what people want?
Are some just not flexible enough for the customers?
Are they too opinionated or not opinionated enough?
Do they need to change a.s.a.p. to survive?
etc etc.

What do people think?

SCIDB

 

[mr cat]

well...I tend to buy most of my kit 2nd hand - either from fleabay, forums and hifi for sale...
latest example - bought my Cairn that was unopened and in perfect condition for 277 notes (rrp 1500)

the inernet is having an effect on a lot of high street shops - look at jessops for example...
that with their 100% markups - it's just as easy for someone to setup a website and store the kit in their house...I fancy doing the same for dslr lenses...

 

[andyoz]

I feel the high street guys are been hit by a double wammy.

The internet has allowed much greater access to wide range of second hand gear. People can easily buy before they try and flip it if not happy.

 

[Snoopdog]

If you can find a good audio dealer and develop an understanding relationship with him then it is worth a lot.

Benefits can include extended home trials of equipment (I am talking weeks not days!) which is not avilable from an internet-based seller or via the classified ads.

A generous discount can also be negotiated within the margin available to the dealer (distributors can be very greedy!).

Trade-in terms are available on your used equipment which is handy if you do not want the hassle of dealing with 'tyre kickers' on the classifieds or your item simply won't sell!

Service backup and warranty for your valued purchases which again is not available from buying secondhand or can be expensive and difficult to obtain if the item is grey imported.

Finally for me has been the guidance and education that has resulted from a long term relationship with a good audio dealer. Some of my 'sacred cows' have been slaughtered by perseverence and demonstration by my dealer who has shown me that what is recommended highly by the audio press is not always the best product to purchase and can be influenced by the politics and relationship between reviewer and distributor.

Forego the good dealer and you are really on your own. Advice may be forthcoming from fellow forum posters but mistakes can be expensive and regretted.

There is a place and healthy market in the internet classifieds and some real bargains (as well as turkeys) can be had, but I still think there is a place for the audio dealership out there.

The trouble is so many are egotistical, opinionated and downright rude!

My dealer is at the 'cutting edge', can be found in Farnham, Surrey (a very handy 5 miles from where I live!) and has my unqualified vote and confidence.

 

[Mr.C]

If dealers were doing their jobs properly then they shouldn't be bothered about the internet, ie offering products and service which aren't available online. Manufacturers should be backing them up by being strict about not allowing internet sales. Unfortunately most dealers today do nothing more than simply hand boxes over to customers and make 50% - so there isn't any real difference between them and any internet shop anyway. Couple this with the fact that more and more manufacturers are allowing their products to be bought online and it's pretty obvious why most dealers have no function any more - some do but they are getting harder to find and, I presume, finding it harder to make any money, especially in the current economic climate.

 

[Class A]

I have yet to come across a decent dealer. Some are bloody rude. They all only want to sell you what they stock and anything else are shit to them...Bunch of tossers.
I can only see dealers fading out as distributors will sell direct which BTW some already are doing to survive.

 

[dudywoxer]

It depends what you want, the sound you are looking for first buy, or box swapping forever to get it. Look at the number of people selling hardly used second hand kit that they have only had for a short time, and not because they are moving up the chain.

A good dealer can help a lot, trouble is they are not all good. If you find one that suits you, then stay with them if possible. They often take you old kit in px as well, OK you may get a better price from a private buyer if you can put up with the tyre kickers and general time wasters while doing it.

May be I am lucky, I found the sound I was looking for early on, and have stayed with it, just moving up the chain, and most of my kit has been purchased new, or ex-dem from 2 dealers, and I think I have dropped about £400 in value doing it. Luckily that £400 has been more than offset by the silly amounts I have made on a couple of good secondhand finds that have sold very well on silly bay.

If you want to have the best prices then maybe the internet is the answer, if you want the best deal overall them maybe its not so good.

I have seen a lot internet comment about 50% margins recently, some brand may offer those levels, but a lot do not I would imagine. And that is gross margin, not profit for the dealer. He has to run his shop out of that, pay staff etc before he makes his living.

As ageneral thought why is hi-fi picked out for its margins, it is would think very similar to many other 'luxury' goods, how much do you think a retailer makes on a patek or rolex watch, good quality pen or pottery. The general conses seems to be you wqant the stuff for free. If you want to bitch about retail prices why not start moaning about the profit levels of the likes of tesco, asda etc.

 

[Class A]

As ageneral thought why is hi-fi picked out for its margins, it is would think very similar to many other 'luxury' goods, how much do you think a retailer makes on a patek or rolex watch, good quality pen or pottery. The general conses seems to be you wqant the stuff for free. If you want to bitch about retail prices why not start moaning about the profit levels of the likes of tesco, asda etc.[/QUOTE]

Hmmmm, I don't have a problem regarding prices as people need to earn their living but this is a Hi-Fi forum and not food critics.

 

[Mr.C]

I have seen a lot internet comment about 50% margins recently, some brand may offer those levels, but a lot do not I would imagine. And that is gross margin, not profit for the dealer. He has to run his shop out of that, pay staff etc before he makes his living.

50% is about average. I worked in the industry a few years back (and know a number of others that have and still do) so I know the figures. Cheaper stuff can be around 20-30%, whereas more expensive kit can often be 60+%. Margins go up as price goes up seems to be the general rule, for obvious reasons.

I take your point about making a living etc, but the problem that I and others have is what exactly are dealers doing for that 50%? Next to nothing is the answer most of the time.

 

[Jimbo]

Its possible they may disappear from our streets one day. Sad, as they are good for trying out the gear first before you buy. I think a lot of the forums such as this can give more info on goods for buyers. So they take a chance on peoples views rather than sales talk.

 

[dudywoxer]

50% is about average. I worked in the industry a few years back (and know a number of others that have and still do) so I know the figures. Cheaper stuff can be around 20-30%, whereas more expensive kit can often be 60+%. Margins go up as price goes up seems to be the general rule, for obvious reasons.

I take your point about making a living etc, but the problem that I and others have is what exactly are dealers doing for that 50%? Next to nothing is the answer most of the time.

Then it comes back to the same thing, find a good dealer, or take pot luck on the net, or seconhand
________
Sharif

 

[larkrise]

I have yet to come across a decent dealer. Some are bloody rude. They all only want to sell you what they stock and anything else are shit to them...Bunch of tossers.
I can only see dealers fading out as distributors will sell direct which BTW some already are doing to survive.

Don't hold back - say what you think David! .

What is it about Hi-Fi that turns some dealers into visions of sublime arrogance - matched only by mercedes dealers when they discover you own a Smart car rather than one of the gas guzzlers (it's a long story but had a hilarious experience recently)

Think we know the rude ones No replies to enquiries = no sale , and as for pompousness - there's a fair clutch of those around, hmm there's a dealer or two in London that comes to mind and a fair few elsewhere. . . . should we name them do you think?

On the other hand I have found some manufacturers and direct suppliers ace to deal with - NAS, Audio Synthesis (great service), to name a couple.


Oh and by the way - amongst the posteriors in the air, there are some excellent dealers out there in case you think I am anti-dealer - far from it -Noteworthy springs to mind for example.

 

[Class A]

Don't hold back - say what you think David! .

What is it about Hi-Fi that turns some dealers into visions of sublime arrogance - matched only by mercedes dealers when they discover you own a Smart car rather than one of the gas guzzlers (it's a long story but had a hilarious experience recently)

Think we know the rude ones No replies to enquiries = no sale , and as for pompousness - there's a fair clutch of those around, hmm there's a dealer or two in London that comes to mind and a fair few elsewhere. . . . should we name them do you think?

On the other hand I have found some manufacturers and direct suppliers ace to deal with - NAS, Audio Synthesis (great service), to name a couple.

Hi M8,

The reason I'm speaking out cos this nob end dealer got to know what I own through a phone call of me asking about his great 2nd hand bargins on his web site but found he don't have any of them and was only a fcukin trick to try sell his speakers and cables etc. OMG, since then, he pestered me with phone calls, E mails wanting to come down to my gaff for a demo when I clearly told him I was not interested in his fckin speakers, cables and pucks in a nice way. DESPERATION is a good word for him.

 

[hifinutt]

sorry to hear that, yes one dealer in particular I will no longer deal with took so long to answer my emails and then complained why I got stuff elsewhere.
I can heartly recommend Tony from coherant and moorgate hi fi
superb guys and very helpful

 

[bottleneck]

Great thread Dean!... and a wonderful opportunity to vent my spleen on a Sunday afternoon!..

With the rise of the internet do people still think they are as valid as before?

No.

Do people think they are a dying breed?

Yes.

Do they offer what people want?

No. Would you buy a fridge that cost £150 to make for £15,000?

Are some just not flexible enough for the customers?

It's not flexibility in my view. A global, internet-led market place makes high-margin high street dealers a dying breed. A plastic bag and a limited warranty isn't enough for me to pay thousands more..or many others.

Are they too opinionated or not opinionated enough?

High self opinion doesn't help in sales. I should know - I battle with it too
High opinions on this topic by the industry are sometimes a ''bury my head in the sand and pretend it's not happening'' type of response.

Customers shopping habits HAVE changed.. get used to it fellas!

Do they need to change a.s.a.p. to survive?

YES!.

If I was opening a hifi store it would:
1) Be out of town in a cheap location.. mostly a warehouse with a very small demo facility.
2) Run an internet store. Low margin, high volume, internet led sales.
3) Embrace products from the far-east, and run them along side traditional audiophile brands. I'd apply the same low-margin sales approach to all brands.
4) I'd embrace kit sales, and get kits built by local builders of both speakers and amplifiers. Low margin here too.
5) Make a marketing slogan out of ''why pay more?'' tesco's style!... After all... WHY PAY MORE?!!


Very strong opinions I know... but I strongly believe the average high street hifi shop has it ''dead wrong''.

Going back to my maketing at Uni days ''in a saturated market place diversify".

Another way to diverisfy is exemplified by the very best UK dealers. For example MAX, Walrus, Definitive Audio - diversification through extremely careful brand selection and best possible customer service. The BIG problem with this though - it's extremely hard to get right. Walrus, Definitive, MAX - there are only a few capable of it in my view - but many that try.

Traditional stores seem to go for the 'Definitive/max/walrus' model, but would be better going for the other model IMV..

 

[Class A]

Spot on bottleneck. Thats why Audiogon is successful :beer:

 

[lbr]

Good question.

I've dealt with some genuinely pleasant dealers and I always try to repay that in kind. I've also struggled with other dealers, who IME fall into one of two brackets:

- rude, arrogant or pushy. If a dealer starts bad-mouthing other kit I generally take that as a sign that he's more interested in a quick sale than a long term relationship. Maybe I've been unlucky, but I've come across more than I would like. Solution simple - go elsewhere.

- just too damn difficult to deal with. I wanted some speaker platforms recently - knew exactly what make I needed and didn't want to audition. As simple a sale as you could hope for I would have thought, and for not inconsiderable money. I tried for 2 weeks to get the sole UK distributor to sell them to me (ignored emails and unreturned calls). In the end I bought them online from the US at just over half the price including delivery, VAT and duty.

I do see the argument for cultivating a relationship with one good dealer and can understand how this could reap rewards. However, the problem for me with this approach is that it is too restrictive of choice. One dealer will only be able to stock so much equipment, hopefully equipment that he thinks is best in class. However, other dealers do the same of course.

When I want to buy new equipment, I will generally pull together a short list of say 4 bits of equipment that I would like to hear, based on the limitations of my existing system, my own prejudices, reviews, etc. This will normally mean 4 different dealers unfortunately. It means that 3 of them will be wasting their time with me, but what I get out of the deal is the ability to hear the equipment I am genuinely interested in. What they get out of the deal is a 25% chance of a high margin sale, which seems fair to me.

 

[larkrise]

Well put Lee.

My advice to dealers is a quote from David Lynch's Blue Velvet:

"Be polite!"

 

[robM]

I think comments like 'dealers earn 50%' doesn't really help the situation. Most dealers are on a 40% margin which is not calculated like 40% of the retail price! VAT comes into it which they do not keep.

If you know what you are looking for, most of you don't - because if you did you wouldn't be chopping and changing every 5minutes, then the used market is great BUT for everyone else who wants to get it pretty much right, you can't get better than a good hifi dealer.

Anyway.... stop screwing about a 40% margin, people need to make a living..... don't hear anyone here telling Zanash his interconnects are overpriced! Cable cost approx £1.50 per metre, labour charge £35 per hour, other parts £15 maximum. That's about £55 max for a interconnect. How much does Zanash charge for a 1.5m one of his jobbies? Is he making more than 50% or 80% on his cables?

 

[Mr.C]

I think comments like 'dealers earn 50%' doesn't really help the situation.

You haven't read my posts properly have you The question is whether the dealer does in fact 'earn' their margin or not. More often 'not'.