[Stu Pitt]

Every field of business is suffering, high end audio and dealers aren't the only ones.   I don't think the high end audio industry is going to come up with an answer that seemingly no one else can (except the oil companies).

I've said it a bunch of times...   There's no market presence.  No advertising, no real effort to recuit the next generation of customers/hobbyists.  The younger generation has the means to attain some good gear, they just either don't have the desire or the knowledge of what's good gear.  They're not stupid, they just haven't been told.  Bose is a household name.  Advertising.  Rolex, Bentley, Viking kitchen stuff, etc are all household names, yet how many people can afford them?

Everyone in the industry has a bit of a role in the state of things - manufacturers, dealers, magazines, etc.  I don't see any realistic effort by any of them to shake things up and bring more recognition to the hobby nor any attempt to bring in the next generation.  This tells me that at the end of the day, they're truly content with the status quo.  It's too bad IMO. 

[Stu Pitt]

As for the Scion and Saturn examples...  Both were on the chopping block several times.  They're not keeping their respective companies afloat by any means.  At least not the last I heard. 

[Elizabeth]

One point: IF an internet place offers home demo (say 30 days, like Audio Advisor) that internet dealer must include the cost to them of returns, and needing to resell those (now used) returns.

Then the direct manufacture to customer only makes sense with a 30 or 60 day home trial with full refund (minus shipping to keep total 'purposeful' temporary borrowing at a minimum).
30 days is a little short considering breakin and shipping, 60 days is a little long. If it was me it would be 6 weeks allowed door to door from shipping from dealer, customer has item, to manufacture gets it back.
So  the shipping is totally out of the approximate 30 days of home use.
Another point is Audio Advisor: are they allowed to ship Bryston product to folks with a local Bryston dealer?
My Bryston dealer is across town. It takes 20 minutes to drive there. Is Audio Advisor going to sell me a Bryston product?

And about Dealers aquiring a product they are not an authorised dealer for: The dealer I bought my Maggies and Bryston And a Rega P5 from (authorized dealer for all) got me a cartridge for my Rega TT from another place, as he did not carry that brand, So for that he was an unauthorized dealer, as a favor to me, no problem.
So I can see instances of nonauthorized dealers aquiring some product as a favor for well known customers which has nothing to do with cutting prices or trying to 'cheat' the system.

And finally my dealer/owner guy (I have known him about 30 years) does drop manufacturers who have problem distribution. So if a manufacturer has internet sales that strip my B&M dealer of sales, or grey market internet, or even some big box store starts selling the product, my dealer drops that company. In some ways he is pretty fierce,(probably why he is still in business) though he seems mild mannered. When I wanted to audition another product he was an authorized dealer for, but did not have in stock, he made it clear why he did not have it, and how it was not in my best interest to buy it anyway. (I even believed him! which is hard to imagine (for any well seasoned audio buyer)considering the usual nonsense a dealer will offer as excuses to sell stuff in the store, but 30 years of interactions with him, personally, convinced me..grugingly.. LOL!.)

And finally a new generation? nope. My generation grew up in a music household, Radio was still a home entertainment, with television for some entertainment. Now, the radio is strictly a car item, and music is via ipod, computer.. for listening while browsing on the compter. The main entertainment is TV and computer games. So music is left out in the cold. Only when those listening to Ipods grow up or become more affluent will they move to the classic two channel audiophile stuff. And it is taking longer for folks to 'mature' in general. leaving home, getting married, a secure job, settling down.. etc.
And harder to become financially safe enough to have expendable income for an expensive two channel hobby. After mortgage, kids, car, etc, the music is way down the list, as they are already in ipods and computer music. For my generation the two channel was cheap. the finest system around, even i could afford.
NOW? Jeez, i couldn't buy the stuff (around now) that costs more than a new home! (when i bought my stuff as a teen it was 50% cost of a new car and less than 10% of a house) So a young person can never be in high end audio, so with that gone, the prestige factor of owning the best, they settle for a lot less. When i was a teen, i own a really top end system for the price. now, i would have some earbuds on my walkman and a ipod, and music on my computer, period, for the same spending power.
My current stuff is about equal to the cost of a quality new car.. And i am still mid fi..(sobbing)

[Ericus Rex]

Another point is Audio Advisor: are they allowed to ship Bryston product to folks with a local Bryston dealer?
My Bryston dealer is across town. It takes 20 minutes to drive there. Is Audio Advisor going to sell me a Bryston product?

Now THAT's a great question!

[vegasdave]

Vegasdave's quote reflects a mindset that is a challenge for retailers.

I agree. But the reality in my case was, I got healthy discounts from 2 different authorized dealers in So. Cal due to no dealer here in Vegas. To be fair, one was a pro audio dealer (West L.A. Music in Hollywood.) Both Bryston units were purchased over the phone. So, I had my cake and ate it too.

If you want good service and a good price, go here, ask for Ken Ito, he's the owner.

http://www.reference-av.com

[doug s.]

Although I don't own Bryston gear, I've followed this thread with interest as it sheds light from multiple angles on problems that affect all in this hobby. Vegasdave's quote reflects a mindset that is a challenge for retailers. Manufacturers have to keep reinforcing the distinction between between price and value. Another industry being challenged by pricing issues is the automotive industry. Scion and Saturn are two products that have been successful in breaking out the customer/dealer price haggling purchase relationship. They established sufficient awareness of value in their retail pricing that the desire to haggle over price was overcome by prospective customers desire to own their products. All that said though, I'm not sure exactly how the lessons from Scion and Saturn can be widely applied to the hi-end audio retailing universe.  It's a limiting business model because there's only so much room at the apex of a "high value perception" product pyramid.

only one of those two automotive examples you mentioned were successful.  saturn never made a profit, and gm discontinued the saturn brand and ended its outstanding franchises on october 31, 2010.  all new production was halted on october 1, 2009.  not much of a lesson there for hi-end audio retailing.

but "hi end" audio always was a fringe industry, even from the beginning.  what you see now, comparing hi-end to the music industry in general, is same as it ever was...  regardless of what happens with traditional b&m stores, there will always be hi-end audio, and its market appeal will always be limited.

doug s.

[Photon46]

In spite of Saturn's ultimate demise, I would disagree that there's no lesson for audio retailers. My main point was that for quite a number of years, they created a retail environment where the perceived value of a product was such that potential customers didn't feel the need to haggle over the "retail" price. The fact that they failed in the end doesn't mean their business model was wrong, it means their products lost the needed high value customer perception because of lagging design and technology. I spent over a decade working in the high dollar import car business and I'd say that the adversarial relationship between maximum sales commission seeking sales people and maximum bargain seeking customers makes for a rather toxic buying experience that parallels the sort of buying experience we have when you go into a hi-end salon today.

[Diamond Dog]

It can also be argued that the Saturn experiment was an attempt to maximize profit margins by exploiting the distaste which a segment of the car-buying public has for the traditional haggling process. Toyota attempted a similar experiment in some markets called "Access Toyota" which saw the manufacturer forbid dealers from deviating from MSRP on their products. It led to a public backlash and a government inquiry in Canada.

I think that once a dealer has purchased merchandise from a manufacturer, it should theoretically be the decision of the dealer as to what they are willing to part with that product for when selling it. Unfortunately, if you have multiple dealers in a territory, there is always going to be conflict if the business models differ eg: one dealer has a "traditional" view where the price is the price and he wants full margin where another will sacrifice margin to make sales. The first view works as long as the customer either receives what they perceive as sufficient value for money in terms of service, etc. to justify the higher price they are paying or is a rube. The second will succeed if the dealer's overhead is low enough and he can shift enough units to compensate for his lower profit margin per sale. The danger here is that when you are pursuing "price shoppers", your price will never be low enough as long as you have another vendor in your industry who is willing to drop his pants lower than you to make the sale. Should either business model fail to achieve it's goal, the invisible hand of the market lays a smack-down on the dealer. Policing these dealer conflicts is a part of James' job which I don't envy, but his commitment to protecting his dealer network from the predations of unauthorized vendors is to be commended. It's great to save a buck as an end-user ( I'm as tight-fisted as anybody ) but if James' business model is dealer-based, he has to protect his dealers from shenanigans or he won't have any dealers.

Because of what I do for a living, I see his side of the story clearly and I think he's being straight-up here. If you have bought a unit ( either new or used ) which was originally purchased from an authorized dealer, you aren't going to have any warranty issues. You just need to provide a copy of the original sales receipt. This is why when you see used Bryston gear for sale, the seller so often clearly states that they will provide the receipt along with the unit. If you buy bootleg gear, the position is clear - you're on your own. Fair enough...and to me it seems unreasonable to expect to have it both ways. Warranty work is not a money-maker so if you're entitled to it, you'll get it. Otherwise you can take the money you saved going grey-market and put it towards the cost of repair outside of warranty. If you look at it through the eyes of an authorized dealer (or if you've worked in sales ), you might see things differently. This isn't to say that dealers should see full margins as an entitlement - if you want the full mark-up you should bloody well work for it or be prepared to take some water in your wine.

It always interests me to see how little use a lot of members have for the dealers in their areas. If this is indicative of the quality of audio dealers generally, this problem will self-regulate. If it's just a question of getting around a middle-man to save a buck, be careful what you wish for folks. The prices aren't necessarily going to drop the way you think they will if the business goes exclusively internet-based. Those prices for gear on Audio Advisor are full-on MSRP. Another example ? Check out what music sells for on iTunes -not much less than what you could buy the same thing for via other methods and end up with something you can actually hold in your hand to boot. And Steve Jobs thanks you all the way to the bank.

D.D.

[doug s.]

In spite of Saturn's ultimate demise, I would disagree that there's no lesson for audio retailers. My main point was that for quite a number of years, they created a retail environment where the perceived value of a product was such that potential customers didn't feel the need to haggle over the "retail" price. The fact that they failed in the end doesn't mean their business model was wrong, it means their products lost the needed high value customer perception because of lagging design and technology. I spent over a decade working in the high dollar import car business and I'd say that the adversarial relationship between maximum sales commission seeking sales people and maximum bargain seeking customers makes for a rather toxic buying experience that parallels the sort of buying experience we have when you go into a hi-end salon today.

they failed not due to lagging design & technology, which was some of the best ever offered by gm.  they failed because they could never make a profit.  certainly, there are unpleasantries associated with buying hi-end autos, but the successful mfr's are able to survive in spite of it.  and to survive, they must be able to make a profit.  yes, there are lessons to be learned, this much i agree with...

doug s.

[Diamond Dog]

Every field of business is suffering

Uh...no. Many industries are actually putting up record profits aside from the oil industry. Pharma, financials..., Hell, Bowers & Wilkins is sponsoring an Indy Car team this year. Segments of manufacturing who are still making stuff here are in tough but a lot of the firms who have shifted production off-shore or converted into companies who don't actually make anything are doing quite well, thank you very much. Markets are up. The problem is that what jobs are being created are not the same types of decent-paying jobs that were lost when the economy tanked. And as Bruce Springsteen sang the last time this happened: " and they ain't coming back..." It's an economic re-structuring which favors the few over the many. Some would say it's a continuation / acceleration of a process that began around the time the Boss wrote that song.

D.D.   

[Elizabeth]

One issue with a world economy and overseas manufacturing IS grey market goods. With Classe' going to China, i expect to start seeing all sorts of 'deals' on Classe'..  and Classe' will be having to go to the strict dealer return for warranty or repair that Parasound has.
I did NOT consider Parasound as a possible choice primarily due to the warranty/dealer issues. The Parasound site says ONLY the dealer can return anything for repair (warranty or not) So parasounds problems with grey market must be pretty bad!
And if your dealer goes belly up??
If Bryston went out of Canada, I can say they would lose me and plenty of other Bryston supporters. (so be wary there James!!    )
And, i think we are learning all about what happens when stuff is outsourced, and the light is gradually dawning, as some companies return the work to the USA. PS Audio is one company which has returned to manufacturing to the United States.

===========


And before retiring I used to read Automotive News (dealer rag)  all the time.. and can say the reason Saturn went belly up was lack of innovation. They started out well, and just stayed in the same place. They never went anywhere with it. And one company which did try, Oldsmobile, was shot down anyway., while they left Pontiac, which was another dead in the water goose, to drown eventually, Go figure.
the only one which HAS reinvented itself was Cadillac. And a pity Chevrolet is getting away with stealing Cadillac design features.
Enough about GM!!

Finally i wish everyone understood how buying stuff enriches the people where it was made. and basically empoverishes the folks who live in your area if no conection to it.
So all that trillions in trade imbalance i killing us. And when i bought stuff at a LOCAL dealer, I kept that from happening one tiny bit. AND buying stuff made in North America. (well nothing is made in Wisconsin except Cheese !! So I hope James, that you buy a LOT of cheese! LOL.)
Anyway......

[Diamond Dog]

 Well said as always, Elizabeth.

D.D.

[James Tanner]

Now THAT's a great question!

The customer can purchase wherever he/she wants.

james

[JRace]

and Classe' will be having to go to the strict dealer return for warranty or repair that Parasound has.
I did NOT consider Parasound as a possible choice primarily due to the warranty/dealer issues. The Parasound site says ONLY the dealer can return anything for repair (warranty or not) So parasounds problems with grey market must be pretty bad!

Where does it say that?
from www.parasound.com:

What the Owner Must do to Obtain Service Under This Warranty
To obtain service under this Warranty, the owner must first telephone Parasound's Technical Services Department at the telephone number shown below, to obtain instructions on how to proceed. In the event that Parasound directs that the Product be returned, the owner will be given a Return Authorization Number, which must appear on the outer carton when the Product is returned. Products received without a visible Return Authorization Number will not be entitled to treatment under this Warranty and will be returned unopened. The owner must in all events, at the owner's expense, arrange for any necessary de-installation of the Product; and,
if Parasound requests that the Product be returned, must at the owner's expense deliver or ship the Product, properly packaged, prepaid, and insured, to Parasound at the address below, or to an Authorized Parasound Service Facility. In addition, the owner must provide evidence that the Product is at the time of delivery within the scope of this Warranty, by including the original or a legible copy of the dated sales receipt with the Product when submitted for repair. All Products must also be accompanied by the owner's name, address, and telephone number.

[audioblazer]

Maybe we should ask ourselves why some people prefer to buy from unauthorised dealers? To me it's economics- if u can buy , say bryston SST 28 amp from unauthorised dealer for usd14k instead of usd20k ( some dealers will sell higher than mrsp claiming tax & transportation)& with a saving of usd6k & the fact that the product carry a 20 years warranty meaning it must be pretty reliable & the fact most of us will prob change gears within the 20 yrs time frame, it is a question of how willing are we to take risk & if the product breakdown would usd6k be sufficient to cover the cost. It's a question of our risk tolerance

[Elizabeth]

Parasound changed it. Perhaps folks like myself complaining and saying don't buy this stuff made a difference?

[won ton on]

Out source your own job to the far east. Ya that's the ticket,no thanks i,ll just keep buying north american made products.Thats why i would never consider parasound even if they do make a good product.I'm looking for speakers made here right now.       Scott

[Ericus Rex]

The customer can purchase wherever he/she wants.

james

Free shipping, no sales tax and a never-ending supply of "discounted demo units" doesn't exactly make Audio Advisor fair competition now does it?

[PRELUDE]

As James said before,the relationship between customer,the dealer and manufacturer is almost important in any business not just the audio.I think the whole idea is people like to spend their money in different places and the number of us that like to pay for HI-FI is always low and if some one get richer the audio has no good place for them.I know people that pay for boat over $100,000 in north America and they only use it for only 2 or 3 months a year.Now try to sell a power amp lets say $4000 to the same guy and you might give him a nice heart attack.This is music and the enjoyment that drag us into this.
Over all more I think more I understand that
1-I like music and I will be involved with this forever.
2-I hate to see the manufacture disappear.
3-I have no use for dealers
and good luck and wish the best for all of you

[James Tanner]

Free shipping, no sales tax and a never-ending supply of "discounted demo units" doesn't exactly make Audio Advisor fair competition now does it?

What a pile of CRAP. You obviously have a vested interest in this discussion beyond the discussion.

james