[marvda1]

what are your thoughts on manufacters of cables who quote expensive list price for their cables then turn around and sell them on ebay or gon for less than $100? you would have to be crazy to to order them direct.
zu for example, their julian speaker cable sells direct for $200+ for a ten foot pair but you can get them on ebay for around $70. go figure.

marvin

[mvwine]

First, let me say that I have great respect for the talents of the people at Zu. I have purchased interconnects and speaker wire from them, and they made major improvements in my system. But I'm with you- why advertise them for so much $$ on the website and turn around and sell them for cheap on E-bay? Just to make the E-bayers think they are getting "a deal"?

Maybe someday the Tones will be selling for $800 on the 'Bay.

[Watson]

I don't really have a problem with it.  The cable market seems a lot like the jewelry market.  There is a huge difference between the prices you pay for a diamond ring at a jeweler and the prices you pay for legitimate equivalent jewelry on eBay (especially used).  No one gets hurt really.  People buy where they feel most comfortable.

[Agisthos]

I can recall reading an article about the jewellery industy - most of the cheaper pieces of jewellery (under $3,000) actually have a 10x markup from wholesale cost. More expensive stuff still has a 5x markup.

Sounds very much like the high end audio industry to me

[213Cobra]

I don't think you will see these price discrepancies between eBay and direct, indefinitely, on Zu cables. Offering cables on eBay under what Zu considers market value, is a way to seed the market and build referenceability and demand while moving cables, without paying to goose the market through marketing expenditures now. This may change in the future if the market supports their intended price. And if it doesn't, the eBay pricing could become the established price which could have the effect of Zu reproportioning its cable/speaker business ratio. It's a young company, bootstrapped with growth self-funded. I like that the founders keep experimenting to establish their business while innovating and retaining control.

Phil

[Carlman]

I don't think you will see these price discrepancies between eBay and direct, indefinitely, on Zu cables. Offering cables on eBay under what Zu considers market value, is a way to seed the market and build referenceability and demand while moving cables, without paying to goose the market through marketing expenditures now. This may change in the future if the market supports their intended price. And if it doesn't, the eBay pricing could become the established price which could have the effect of Zu reprop ...

While it sounds good the way you've put it, I don't agree with this marketing tactic.  It's like giving someone a discount for the first purchase... they expect the next purchase to be just as cheap.  You devalue your product or service by doing this.  I've proven this to be true a few times in my business ventures.

[213Cobra]

It's true, perceived value tends to be set early. On the other hand, Lexus debuted by underpricing the established luxury car makers and gradually nudged their pricing up from there. It can be done, but raising prices is nearly always more difficult than discounting. Time will tell. People pay all sorts of unreasonable pricing for cables having dubious value. Zu is one of ony two cable vendors to offer product that unconditionally improves sonic performance rather than just making your system sound different. Whether that improvement is worth the expenditure is up to the individual considering the purchase, but it is real. In the end, markets set you free. The market will tell you what your product is worth, irrespective of whether what you claim for it is true, and in audio of course there is so much motivated by emotion rather than analysis. In such an unhinged market, I think it's a reasonable experiement to use eBay as a discount channel to move some wire, develop a rep and learn enough to inform next steps. But that's just me.

Phil

[SET Man]

Hi guys,

   No, I don't have problem with that at all!  Because I roll my own cables So far all the cables I made work so well in my system that I don't think I will buy any of those $$$ brand name cable again!

   Hmmm... let's see maybe I could sell them for $500+ or $1000 with some fancy outer jacket

Take care all,
Buddy

[DSK]

While it sounds good the way you've put it, I don't agree with this marketing tactic.  It's like giving someone a discount for the first purchase... they expect the next purchase to be just as cheap.  You devalue your product or service by doing this.  I've proven this to be true a few times in my business ventures.

I think the problems arise when the vendor doesn't explain why the goods are cheaper on eBay. This leads to confusion, assumptions and perhaps a lack of trust.

I tend to agree with 213Cobra that it can be an effective method of getting some early volume and thus a reference base for a new product or company. But to work, it needs to be clearly stated that the discount price is only for the first 'x' cables sold, or cables sold before a declared date...and  these criteria must be adhered to.

If a vendor is completely open and honest, declaring all relevant information up front, then potential buyers don't have to fill in the gaps with their own assumptions or make mistakes and feel ripped off. They have all the info they need to make their decision to purchase or not. The early adopters can buy, without the security of glowing reviews available yet, at the discounted price. More cautious buyers can wait for the reviews before buying, but forfeit the discount in return for this security. I feel this is perfectly reasonable. After all, most vendors set a price from day one and early adopters buy at their own risk with no discount.

[Carlman]

DSK, stating it's an 'introductory offer' or price makes a lot of sense.  I completely agree with your last post.

I don't think the Lexus analogy works for a company the size of Zu.  It's a good long-term marketing plan for a large company given thorough analysis of the auto-market and what will create maximum profit.  That plan likely took years to develop and implement.  I would wager a marketing effort of that magnitude would rival even Bose.... a true "Marketing Marvel"....

[chadh]

You don't have to look very far to find LOADS of goods and services that are sold at different locations or to different people at different prices.  It's usually called price discrimination.   Airlines offer one price online, another through phone sales and another when the tickets are purchased through a travel agent.  Some firms distribute coupons in certain magazines, ensuring that readers of that magazine receive the discount and others don't.  A single supermarket chain will sell identical products at different prices in different locations.  The list goes on...

The idea is that, where you see different sets of consumers, their demand characteristics are different.  The appropriate prices charged in the various market segments will, generally, be different.

As far as I can see, these  cable prices are a good example of price discrimination in action.  The proposition is that people who wade through the masses and masses of crap on ebay looking for good prices are significantly different from the types of people who content themselves to read reviews of gear in Stereophile or wherever and search for cables directly at the manufacturer's websites.  These people are probably different again from those who search for prices only at Audiogon.

Chad

[Tbadder1]

Fascinating subject.  I think it is effective marketing, and I believe it can work.  I bought my first pair of Zu cable on ebay, but I bought them direct when I wanted to go up a class.  I bought my Druids new on-line, but if I one day I go to the Definitions you can bet I won't get new ones on the A'gon.  Hey it's the free market, and since we're so devout when it comes to capitalism, we'll just have to be intelligent consumers.  By the way the guys at Zu are some of the nicest, most honest people I've ever met.  The stuff they dissuaded me from buying has saved me a lot, and I'm just as happy (as they knew I would be).