There has recently been quite a discussion on Audio Asylum regarding the distribution model manufacturers use. There are good arguments on all sides of the issue. I would like to take a moment to give our reasons for opting to sell our products direct.
I am sure that most of us can tell some real horror stories of their dealings with all forms of product distribution. There are good dealers and bad. Honest, and dishonest people run all sorts of businesses as manufacturers, distributors, and retailers. I know of no evidence that would show that a brick and mortar retailer of audio widgets is inherently more honest than a direct-sales audio manufacturer - although one tends to point fingers at the other. Yet, the perception remains and is reinforced by those who have a stake in that perception, that companies who sell their products directly to the consumer are inherently inferior.
We initially wanted to use dealers. After all, that's how things worked, and we had no desire to buck the establishment. The dealers we took the product to all liked it very well - even better in some cases to more expensive products. However, the conversation always focused on how the product was better made than it needed to be for the price-point, and how we should lessen the build quality to lower our costs so that we could provide the dealer with at least 40%, but 50% of retail would be better. In fact, they were very up front about the fact that they will typically put more effort into selling a product they get 50% of, than a product they get 40% of. We still would have to offer further incentives like free shipping and discounts for paying their bills in a timely manor. By the time we got done feeding all the pirhana between us and the end user, we might as well be making toasters and coffee pots.
Nevertheless, we asked if they would be willing to demo a set to some clients and provide us some feedback from potential buyers and they agreed. We heard nothing from them for a few weeks and so stopped in to see how things were going. We didn't see our speakers anywhere, and everyone just disappeared. I finally found our speakers in a back hallway sitting on top of a pile of other gear. One of the solid walnut baffles had a deep gouge (not just a scratch), and one of the woofer surrounds had a tear in it. No one called to say they had been damaged and that we should come get them. Look, I know things happen sometimes, but a phone call would have been nice. However, what got me was the fact that everyone just disappeared. No one wanted to talk to me. So, I packed up the speakers and left. No one ever said boo.
As I thought about all that had happened and what I had learned, I kept coming back to one question that really bothered me: If they were willing to treat us this way as a manufacturer, why would we want them to represent us to our customers? The answer is simple: The dealer would be our direct customer, not the end user. It was at this point that we made a critical decision. We decided that we actually want the end user to be our customer. We want that direct contact. We want to control how our clients are treated, and how they are supported.
Selling direct is loaded with obstacles and hurdles to overcome. Logistics is only one of the problems a direct-sales manufacturer will face. The whole idea of doing business at arms-length is difficult enough, and far more complicated when you're talking about a few thousand dollars at a time. Over the years we've made every effort to remain focused on what it's like for those who make the leap of faith and chose to do business with us. After all, we're asking them to spend $3k on a product they've never heard, with a company the've barely heard of at best, and to do so at arms-length. That's a lot to ask now matter how you approach it! So, how do you sell directly to the consumer while minimizing the risk to both parties?
What we've devised is a system that takes the best from what others have done, while removing as many obstacles for the buyer as possible.
Most will agree that the best way to really audition gear is in your own room and with your own system. People tend to fall into buyer's remorse more often when they feel pressured to make a decision under pressure, or within a short time frame. We therefore give 30-days once you receive the product to get to know it and make a final decision. Okay, but who pays for the shipping? Well, we pay the shipping costs to the customer, and if the product doesn't make your Jell-O jiggle we'll pay the return shipping as well. Most dealers charge a restocking fee if you return a product after 3-5 days, we don't. We want you to give our products a listen. We don't want to make it difficult or risky for you to do so. This way, the pressure is on us to deliver the goods, not on the client to beat a deadline or jump through hoops to minimize their financial obligation just to hear our speakers. Even then, we have had only one set of Eire speakers returned by a client since we introduced it in March of 1997!
Of course, we have to protect ourselves in this whole process as well as the customer. Therefore, we do ask that the client pay for the speakers before we ship them. For added value, we work with the client to match their decor and tastes by offering them the opportunity to choose the veneers and baffle material for additional cost.
We know that some will refuse to buy anything direct from the manufacturer under any circumstances. We also know after 10-years in business that many of you will under the right conditions. What we want to know is how you feel about the whole idea of buying direct from the manufacturer. Aside from giving away free speakers, what would you like to see us do that we don't, or not do that we should?
Poll
