[modwright]

You know guys, I do understand the need to hear the product and be sure that you are happy with it.

However, what you don't see or perhaps take into account is the dealers losses when products are returned.  He can no longer sell the product as new and has to take a loss.

The intent is good for most people, but what screws things up is the customer that 'buys' the product, along with a handful of other similar products, with no intention of actually keeping them.  It is this kind of 'tire kicking' that causes manufacturers to have re-stocking fees.

Bottom line, if you buy the product and find that it is not to your liking, it is far better to be out only 10% of the purchase price, rather than the loss you would take by selling it as a 'used' product, despite its condition.

I am just trying to explain both sides of the equation here.  Large companies can absorb the losses incurred with a small % return rate, but smaller companies don't always have that luxury.

Thanks for listening.  Again, these are just my thoughts.

Dan W.

[zybar]

Dan,

I do understand both sides of the story and that's why I was careful not to come across as trashing Dusty for having the restocking fee.

But I just need to be honest that this policy will stop me from ever trying the amps.

Of course, I am extremely happy with my DNA-500, but I am always hoping that there is something out there that is as good or better at a cheaper price.  Does that qualify me as tire kicker?

The $200 + return fee is too steep for me to find out.

Guess I can just hope that Dusty is wildly successful and can afford to not charge a restocking fee.

Dusty, how about an AC tour like many other vendors have done?

George

[suits_me]

Ten percent re-stocking is not no risk, and the website should be corrected.

And manufacturers can sell returned goods (under certain limitations such as B stock, demo, refurbs, etc.) They can't legally sell them as new, although I've known it to happen in audio and other industries.

Besides, there are plenty of ways to mitigate this: An Orion type owner referral program for local auditions, a few dedicated loaner units going out from the factory, a single unit shuffled direct from circle member to circle member as other companies here often do.

People at this sort of forum talk a lot - you'd want them familiar with your decent product whether they're just tire kicking or not, imo.

Of course, then you get those who've had eight amps in two months and declare they love yours after a scant 25 hours. I'd forgive any manufacturer for being a wee bit nervous at that sort of endorsement. Who's to say you won't be number nine?

[lonewolfny42]

zybar :

Dusty, how about an AC tour like many other vendors have done?

George

[/list:u]

Good idea...its worked well in the past. In fact, those tours have accounted for the sale of quiet a few products. [/list:u]
After hearing the amp at the RMAF in the ModWright room, I do wonder how it would sound here in my system ???[/list:u]
I can see the point about a restocking fee, but if I were in the audio business, I would have demo units available...but thats me... [/list:u]
Chris[/list:u]

[Rocket]

Hi,

I'd be pretty happy to pay a 10% restocking fee for returning the product.  I'm sure many AC members have paid much much more buying expensive cables and ended up not liking them.  Unfortunately it would cost me an arm and a leg to import the amp and return it if i didn't like it.

It is really important to actually hear the product in your system.  This year i have gone to the expence of importing 2 amplifiers from the states after reading numerous rave reviews, both professional and audiophile hobbyists and i have been really disappointed by both of them.

Either my system is much better than the reviewers in the states or i need to have my ears cleaned by candle wax   .

Regards

Rod

[Charles Calkins]

Well here I go again.
  I have to agree with Dan Wright about paying a 10% restocking fee. Let's face it guys it's a tough world trying to make a decent living to support yourself and a family. When you take your lady out to dinner I'm sure you leave a tip for the waiter. Like 15% of the tab. So let's just say that you are giving Dusty of CIA or any other audio firm a tip to try out their product. If that is their policy it works for me.

                                        Cheers
                                        Charlie

[CIAudio]

Our policy was developed over trial and error...
We used to offer our products on a 30-day shipping cost only deal, but many people ordered them just to use it for a month, for a party, or whatever reason. If every manufacturer did this, you could have a whole system of loaner products rotating in/out of your system without ever buying anything. The 10% restocking fee weeds out these types.

In addition to that, we are a small company and hand-build the amplifiers to order in various configurations for gain, balanced or RCA input, etc.
Even if we built loaners of each type, there would still be a loooong waiting list.

We feel the restocking fee is a fair one...
In the rare case we do get a pair back, they have to be completely re-tested, inspected, replace dinged/scratched chassis parts and missing cables/manuals, and reboxed, then sold at a discount. This ALWAYS costs more than the 10% fee in man hours and replacement parts.

Sorry if it's not to everyone's liking, but we think it's fair and works well for both parties.

-Dusty-

[CIAudio]

Ten percent re-stocking is not no risk, and the website should be corrected.

Corrected  

[chadh]

It seems to me there is a simple way to get rid of that 10% restocking fee:  just raise all prices.  That way nobody gets upset because they have to pay the restocking fee, and Dusty gets the money he needs to compensate for those returned units.

Does this sound good?

It may well be true that there are manufacturers out there who offer 100% money back guarantees.  But so what?  If this is accomplished by increasing the margin on the units they sell (and I insist that this MUST be the case, or they wouldn't make a living), I have no idea why this would be a more desirable arrangement.

Personally, I would be happy to accept a little risk (the 10% stocking fee) knowing that the prices on the products are lower, especially if I'm pretty sure the risk of dissatisfaction is low.

Of course, if I owned components that cost a huge amount of money that I consistently report to have bested all comers in their category, my risks of dissatisfaction are much higher.  I don't see why the prices that everyone else pays should be forced higher to guarantee me a risk free trial experience.

But maybe my priorities are just messed up.

Chad

[NealH]

It seems to me there is a simple way to get rid of that 10% restocking fee: just raise all prices. That way nobody gets upset because they have to pay the restocking fee, and Dusty gets the money he needs to compensate for those returned units.

Well, I would say that's pretty much a standard practice in industry.  Does General Motors charge you for a warranty repair or, do they have warranty costs estimated and built into the sales price of the automobile?  Do they charge you for test driving one of their cars or, do they have the costs associated with test driving built into the sales price?  Does your local high end audio dealer charge you a restock fee if you take a product home for audition then return it?  I don't think so.  It's built into the sales price.      

Lets face it, if the product is as good as it's hyped to be then the extra few dollars does not in any way negate or detract from it being a "good deal".  

I don't mean to be flaming the policies of any company but, it's just my opinion that this 10% restock policy is not necessarily one that works well for both parties.  I have seen threads and threads that just beat a component to death on these and other audio forums.  Then, in the end of these drawn out discussions there is always the comment that most everyone agrees on; "try it - it's the only way that you will know for sure it's going to work for you".  

So, in the case of this said amplifier, when one tries it and it does not work in his system (preferences or not) then he is out $200 plus shipping.  How does this work well for the buyer?  

I am sure this amplifier is a good one from what I have read but, I really don't think I can know this for sure short of auditioning it.   It's too bad it will not be visiting my home.

[chadh]

How does this work well for the buyer?  

Well, it works well for some buyers and not for others.  

For every person and for every component there is some possibility that things just won't work out.   But the risk is greater for some than for others.  The "tire kickers" are high risk people.  The people who already own products with prices far in excess of the products in question, or products that have garnered loads of credible positive reviews, are high risk people.  People who have been through a very long period of careful and extensive experimentation to find just the right components to satisfy their very specific tastes are high risk.  People who previously found they didn't like similar products are high risk.  These are the peope who are predictably least likely to buy the product after a given experimentation.  The rest of the world is comprised of lower risk people.

The effect of a 100% money back guarantee is to raise the prices that the low risk people pay in order to facilitate the experimentation of the high risk people.  And remember, those high risk people are exactly the types of people who are most likely to send the unit back.  This doesn't establish that a restocking fee is the right thing to do.  Nor that a restocking of 10% is exactly the right one.  But it's a pretty good argument for why some, if not most people should be happy to see a restocking fee.

Essentially the same thing is seen in the insurance industry all the time.  If an insurance company offers an insurance policy that covers 100% of any damages it will tend to attract lots of bad drivers.  This means that the insurance company will have to make many more payments, so that premiums need to be much higher.  By insisting on a deductible, the insurance company dissuades high risk people from buying their insurance, and premiums can be lower.

Notice that if the deductible were to discourage 10% of customers from buying the insurance then there really would be a significant reduction in the premium.  It is reduced because the insurance company doesn't have to pay for all the damage to a car.  And it is reduced because the remaining customers are less likely to have accidents than the high risk people that go elsewhere, and so the incidence of claims is lower.  

Now, one could go along to your insurance company and convince them to remove the deductible on your insurance - but if you're a reasonably safe driver, you're almost certainly doing yourself a disservice.  You'll be paying higher premiums to cover the accidents of all the other bozos who now find the insurance policy attractive.

Now the term "high risk" in the audio setting is not meant to be perjorative in any way.  High risk audiophiles are not bozos.  In some ways high risk may reflect a greater level of discernment, or it may reflect a longer association with the hobby.  But the question remains:  why should everyone else have to pay significantly higher prices  to facilitate the experimentation of those people who are least likely to buy the product?  

We could think about a simple example, which I hope is understood to be given with all due respect to all AC members.  

The similarity in design of CI class D amps and Nuforce amps, and the comparably high praise they have garnered, might suggest that the differences between these two products are likely to be small.  So if somebody has compared his current amp-champs against the nuforce and rated the nuforce a creditable 70% of his existing amps, I've got to imagine that there's very little chance he would find the CI amps to be better than his current ones.  That means an in-home trial of the CI amps for that person results in restocking costs for Dusty with almost 100% probability.  Ultimately, that's not a hit that Dusty is going to bear (well, certainly not totally).  That's something for which the rest of Dusty's costomers have to pay.

Like I said, the policy is to the benefit of some buyers and to the detriment of others.  But I know in which group you can find me.

Chad

[zybar]

The similarity in design of CI class D amps and Nuforce amps, and the comparably high praise they have garnered, might suggest that the differences between these two products are likely to be small. So if somebody has compared his current amp-champs against the nuforce and rated the nuforce a creditable 70% of his existing amps, I've got to imagine that there's very little chance he would find the CI amps to be better than his current ones. That means an in-home trial of the CI amps for that person results in restocking costs for Dusty with almost 100% probability. Ultimately, that's not a hit that Dusty is going to bear (well, certainly not totally). That's something for which the rest of Dusty's costomers have to pay.

Like I said, the policy is to the benefit of some buyers and to the detriment of others. But I know in which group you can find me.

Chad

Chad,

You wouldn't possibly be referring to me?  

I agree that the odds of me replacing my current amp with the D-200 aren't in the same range as somebody looking to change from say an Adcom or Rotel amp.  

However, even if the D-200 didn't turn out to be a direct replacement, I could possibly use them in my second system.  

Additionally, I don't think it would be bad press if the comparison showed that the D-200 was close in performance to a product costing 2-3x its list price.  

George

[chadh]

Chad,

Additionally, I don't think it would be bad press if the comparison showed that the D-200 was close in performance to a product costing 2-3x its list price.  

George

This is an excellent, if slightly different point.  What you need here is a groundswell of support from AC as a credible, insightful and unbiased reviewer, demonstrating a huge cult-like following.  In that case, I imagine Dusty would happily send you out a review unit.  But if the existent press is anything to go by, the only way to garner this sort of widespread adulation is to change your reviewing style.  Your reviews would have to say less about your actual listening experiences and more about how nicely everything looks in your rack; mention just why you love track four from your Japanese issue of the classic "Polish Goatherders Live in Mumbai"; and would need many more industry names dropped liberally through the pages.

Alternatively, what you could do is to encourage one of your low risk friends to try them out.  When he buys the amps he'll be so grateful for your recommendation that he'll happily let you borrow them for a week!

If I were a low risk friend with the available cash, I'd do that for you.

Chad

[Grover]

I think there's a lot of people out there that just like to get something for (relatively) nothing.  If you're serious about an amp or other piece of equipment, a 10% restocking fee from a manufacturer isn't really a bad "rent" to pay for the opportunity of trying it out for a month.  And that's a key point.  Dusty is a manufacturer selling direct to customers.  It's not like he's adding dealer markup to the price of his equipment.

Besides, Dusty has already said that he loses money when a unit is returned, even with his 10% restocking charge.   He implemented the fee to cut down on the amount of people who want to use Dusty's money and Dusty's equipment for a joy ride with absolutely no/little intention of buying. At least that's what I get from reading Dusty's earlier post.  To me it makes perfect sense and is a way of "cost-sharing" where Dusty and the returner share the expense of the trial piece that is returned.

I want to point out a little wrinkle, and that's Dusty's return policy actually is STILL  "no risk" if you end up buying the product!  So it's my opinion that the potential customer can still feel like they're getting something for (relatively) nothing withe the 30-day trial.

[brj]

I want to point out a little wrinkle, and that's Dusty's return policy actually is STILL "no risk" if you end up buying the product! So it's my opinion that the potential customer can still feel like they're getting something for (relatively) nothing withe the 30-day trial.

Many people, including myself, would not consider $230 (10% of the D200s) to be "relatively" nothing.  I can purchase a lot of dinners out with friends, or find a very good set of interconnects for that price, especially if I'm willing to purchase them used.  In addition, my personal interpretation of the phrase "no risk" applies to the case where one returns the product, not purchases it.  By applying similar logic, an aircraft that lands successfully after losing an engine or wing had a "no risk" flight!

In my view, the largest issue involved in charging a restocking fee stems from the manufacturer's inability to accurately measure the cost of any lost sales resulting from such a policy.  I am not, and have never been, a manufacturer or salesman, so I'm looking at this purely from a consumer's standpoint.  I'll readily concede that checking over returned merchandise incurrs a non-trivial cost, whether the products are returned by those that are well-intentioned or abusing a free trial program.  That cost is easily measured and may seem relatively large, especially if your margins seem small.  The cost in lost sales by those well-intentioned potential customers put off by the restocking fee, however, is never known, and probably a far larger number.  I suspect that this concern especially applies to those individuals reading forums such as AC, because not only are they dedicated audiophiles, but many are searching out the best bang-for-the-buck options they can find.  Personally, I'm usually very willing to save money for a while in order to afford a quality point that I couldn't otherwise reach, but because that funding level now represents a decidedly non-incidental expenditure, the product has to be a "sure thing".  If the financial risk of simply auditioning an expensive product at my chosen quality proint impacts my ability to save toward the actual purchase, then I'm extremely unlikely to consider that product in the first place.

(Note that I use the term "expensive" in the only sense that ultimately matters - relative to my income and my personal priorities, and not relative to other products that are very likely over-priced.  The phrase "product X sounds better than products costing Y times more dollars" does nothing but set off warning bells in my mind.  It is far too easy to find comparison products whose high prices are in no way related the level of engineering employed in their design and the quality of parts used in their construction.  This is extremely unforunate for those manufacturers that sell great products at a fair price, as CIAudio appears to.  It is even more unfortunate for the poor audio consumer that has to shift through so much chaff to find the proverbial wheat.)

As other people have mentioned, synergy can play a significant role in the development of one's audio/HT system.  An amp might be a fantastic product with a staggering and deserved reputation - as the CIAudio amps appear to be - but still may not work well in your particular system.  In addition, many people might not yet have identified the "type of sound" they prefer.  A person may not discover that they prefer the sound of tubes, for example, until after many trials at component swapping.  These are both common reasons for an upstanding audiophile to return a component.

One previously mentioned alterative to a restocking fee would be a touring demo unit.  Many manufacturers and dealers on AC have sent one or more components out for a road tour.  Each party pays shipping to the next party, with the manufacturer kept in the loop at every step and determining any ground rules as well as the order of recipiants.  This is especially effective when components are sent to members of a regional circle scheduling a group get-together.  It would make a great deal of sense to use a previously returned unit for this purpose.  The benefit of this approach is exposure to a far wider number of people than you would get if the restocking fee was always imposed.

[suits_me]

It's interesting the idea of an Orion type owner referral program for local auditions got lost.

I just now wrote a post with other unnecessary suggestions, but it seems Dusty has made up his mind presumably due to strong enough sales with the 10% fee.

[chadh]

brj,

I know I should shut-up, but I can't.  So forgive me.  Please.

I just can't agree with your claim that the re-stocking fee is likely to result in a large loss of sales.  I will agree that a restocking fee is likely to result in a significant reduction in the number of individuals who request a 30-day in-home trial.  But these are two very different things.

Consider George, our example-in-residence.  He won't be putting his $230 at risk for the in-home trial.  But even if he did, he would be unlikley to decide that he prefers the CI amps over his current one.  So does Dusty lose a sale to George because of the policy?  Almost certainly not. However Dusty does save on the restocking costs, and is able to pass those savings along to the rest of us.  The first people affected by the restocking fee are precisely those people who are least likely to buy anyway.

This does not mean that the restocking fee has no impact on sales.  Given that the restocking fee allows Dusty to reduce costs associated with restocking, it allows him to reduce the price.  And at a lower price, those of us who are unlikely to return the product after an in-home trial are more likely to take that in-home trial and subsequently buy.  I'll wager that Dusty sells more units under the current policy than he would if he abolished the restocking fee and subsequently had to raise prices.

Are you still dissatified with the restocking fee?  Well this alternative should really annoy you.  This approach is also common in insurance markets.

Insurers often offer different policies that afford different degrees of coverage along with different premiums.  A customer is allowed to choose amongst the policies: ones with high coverage at a high premium, to ones that afford miserable coverage but are cheap.  So too, a manufacturer could offer two (or more) prices for the same product, and have different return policies associated with them.  

For example, Dusty could offer the D-200 monoblocks at a price of $2300 a pair along with a 10% restocking fee, or, if you preferred, you could secure a 0% restocking fee as long as you were prepared to pay $2475 (or some other appropriate price that was less than $2530).  
All of those people who are highly likely to return the product can secure a 0% restocking fee just as long as they pay the higher price.  Those who are unlikely to return the product can choose to bear the risk of incurring the restocking fee and so secure a lower price.

I suspect that people would react badly if a manufacturer made it so clear that you had to pay good money to get the security of the no-risk trial.  But then, if you're not prepared to pay for something how much could it possibly be worth to you?

Chad

[zybar]

brj,

I know I should shut-up, but I can't.  So forgive me.  Please.

I just can't agree with your claim that the re-stocking fee is likely to result in a large loss of sales.  I will agree that a restocking fee is likely to result in a significant reduction in the number of individuals who request a 30-day in-home trial.  But these are two very different things.

Consider George, our example-in-residence.  He won't be putting his $230 at risk for the in-home trial.  But even if he did, he would be un ...

Chad,

I am fine with you using me as your example, but let me make a few comments:

1.  I would be auditioning them for not only my main system, but also a secondary one.  This means I would absolutely be a potential buyer.  The D-200's wouldn't have to better the DNA-500 for me to buy a pair.

2.  Not trying to brag, but I have helped many vendors sell their products by posting positive reviews on AC, Audiogon, Audio Asylum, etc...  So even if I didn't buy them myself, there is the potential for increased revenue from a postive write-up and subsequent recommendations.  As you pointed out earlier, not everybody can afford or wants to spend $7,000 on an amp (it wasn't that long ago when I couldn't either).  

Anyway, this had been a fun debate and hopefully all the publicity has helped Dusty in some small way.  

George

[suits_me]

>For example, Dusty could offer the D-200 monoblocks at a price of $2300 a pair along with a 10% restocking fee, or, if you preferred, you could secure a 0% restocking fee as long as you were prepared to pay $2475 (or some other appropriate price that was less than $2530).
All of those people who are highly likely to return the product can secure a 0% restocking fee just as long as they pay the higher price.

Let me think about this for half a second. Yeah, it makes no sense at all. The only penalty for pure tire kicking here is a slightly higher, temporary float on your credit card. In other words, the purely frivilous shopper - the exact person a restocking fee tries to discourage - would experience no penalty whatsoever.

Furthermore, the difference between 10% of 2300.00 and 10% of 2475.00 is about nil, so it doesn't make sense on the restocking fee option, either.

[chadh]

Let me think about this for half a second. Yeah, it makes no sense at all. The only penalty for pure tire kicking here is a slightly higher, temporary float on your credit card. In other words, the purely frivilous shopper - the exact person a restocking fee tries to discourage - would experience no penalty whatsoever.

Furthermore, the difference between 10% of 2300.00 and 10% of 2475.00 is about nil, so it doesn't make sense on the restocking fee option, either.

Okay...let's imagine you think about it for more than half a second.

Who ever said that the "pure tire kicker" was the only one about whom we are concerned? Obviously, the guy who NEVER intends to buy the product is just as happy to pay $1m if he has a money back guarantee.  So you are right in the sense that any pricing option that allows the purely frivolous shopper to get away without paying will not deter that person from shopping.  But I'm not sure that there are too many of those completely frivolous instances to worry about.  And if you are worried, ammend things so that the restocking fee is 1%, or 5% or whetever makes you happy with the high priced option.

The scheme is designed to cope with people who are relatively unlikely to buy, but would still like to have a listen to make up their own minds.  These are the people who, on average, are relatively costly to serve.  In general, it is possible that they will buy if they take an in-home trial.  It's just less likely than for other people.  So if they choose the high price, low risk option, they understand that they will have to pay a higher price if they choose to keep the product. In expectation, then, these people pay more in order to get low risk.

I mean, if we are prepared to think about things for more than half a second it seems pretty simple, right?  People who pay a lower price have to bear higher  risk.  In order to reduce exposure to risk a person is required to pay more.  If this doesn't apply to you then I'm sure I could find some insurance thay you'd really like to buy.  

I'm not sure why 10% of $2300 vs 10% of $2475 was relevant at all.  The pricing scheme is designed to offer different pricing arrangements that would appeal to different people.   If the manufacturer wants to sell products to some people for $2300 and require a 10% restocking fee in the event of return, but also wants to serve another portion of the market that is more worried about the risk involved in the restocking fee, he is able to offer another pricing option that has lower risk.  But this will have to be a more expensive option for two reasons:  to ensure that all those low risk people don't choose the new pricing alternative, and to help cover the higher return-related costs that the high risk guys impose.  That's all: the scheme tries to cater to different people by appealing to the differences in the way they trade off price and risk.

I don't think you need to worry, though.  You're not about to see manufacturers jump on this pricing bandwagon.

Chad