[jaxwired]

I've been watching this guy for months now.  Everything he sells is either brand new in the box or "just opened".  He is obviously in cahoots with a dealer and selling the stuff below manufacturer retail to skirt the dealer agreements. 

The days of fixed prices and 50% retail markup for high end audio products are numbered.  There's no reason to pay those markups anymore given the lack of retailers.  The manufacturers need to get a clue and just open things up to the internet and free market.  Then prices will plummet.  In the meantime, people like this will service the real market.  It's unethical, but it's the fault of the manufacturers and distributors.

[decal]

 

I've been watching this guy for months now.  Everything he sells is either brand new in the box or "just opened".  He is obviously in cahoots with a dealer and selling the stuff below manufacturer retail to skirt the dealer agreements. 

The days of fixed prices and 50% retail markup for high end audio products are numbered.  There's no reason to pay those markups anymore given the lack of retailers.  The manufacturers need to get a clue and just open things up to the internet and free market.  Then prices will plummet.  In the meantime, people like this will service the real market.  It's unethical, but it's the fault of the manufacturers and distributors.

http://www.audiogon.com/cgi-bin/cls.pl?spkrmoni&1286938099&/Bowers---Wilkins-B-w-805-Diamo

Care to share some more information regarding your investigation(I've been watching this guy for months now)? Care to share some facts corroborating your accusations(He is obviously in cahoots with a dealer and selling the stuff below manufacturer retail to skirt the dealer agreements)? You do realize what you're  doing by posting your statements in public,don't you? Just wondering aloud.

[walkern]

There have been folks out there selling gray market, demo and used goods for decades, and shopping via the internet is just the latest way to get around "dealer agreements".  Try shopping at Audiophile Liquidators some time.  The question is, are folks willing to pass on a manufacturer's warranty, and any sort of after purchase service in order to get a big discount?  If so, there have always been ways around the local retail store.

[Construct]

As long as the warranty is good and the product is in described condition you'll get no complaints from me.

[Phil A]

I don't know about that Audiogon ad in particular, but at one point I was considering a current model of a Rotel amp that was very lightly used.  I asked the seller if he will furnish a receipt from the authorized dealer and he said no.  The dealers are killing themselves with this behavior too.  B&W of course will be sold at Best Buy's Magnolia come this fall.  I suspect for the most part they will have the lower end models.  Rotel is owned by the same company as B&W and I know a dealer who has been a loyal Rotel dealer for 20 years and recently they refused to fill an order indicating they are re-assessing their dealerships in the area.  My gut feeling is that an announcement that Rotel is going to Magnolia is coming.  It wouldn't surprise me if another company under the same umbrella went that route too (Classe).  I think the hey day of the high end dealer is long gone and there will be fewer and fewer down the road.  Some manufacturers are making some moves already to deal with the reality.

[jaxwired]

Care to share some more information regarding your investigation(I've been watching this guy for months now)? Care to share some facts corroborating your accusations(He is obviously in cahoots with a dealer and selling the stuff below manufacturer retail to skirt the dealer agreements)?

Sure.  He only sells, never buys (check his feedback).  Everything he's sold for the last 6 months has been brand new or just opened and less than 2 weeks old.  He always posts a lame transparent excuse.  I haven't written down all the excuses, but they all are meant to convey that he is just a regular guy that changed his mind and is now selling.  Know anybody that just changed their minds 28 times on new gear for a 6 month period?  Ummm....no....guess not. 

It's either coming from a dealer under the table or it's hot.   Simple.

As for what I'm doing with this post, I only point it out to open discussion about high end retail and how poorly it is now serving it's customers.

[electricbear]

"The days of fixed prices and 50% retail markup for high end audio products are numbered".
I don't know what kind of crack you are smoking, I'd love to get a 50% mark up on what I sell. Most product start with a max of 40% and then we are nickled and dimed out of about 10% of that. We require about 25% in an item to draw even so that does not leave much room for any profit. Weigh the minor profit on audio against the negative profit on a tv and we just about draw even.
So, without the high end retailer where are you going to hear the product? Who are you going to call when you need technical advice? What are you going to do when something goes wrong and you have no warranty?
Smell the roses... Without the high end dealer there will be no high end.   
You clearly did not think things through before making your post.

[jaxwired]

"The days of fixed prices and 50% retail markup for high end audio products are numbered".
I don't know what kind of crack you are smoking, I'd love to get a 50% mark up on what I sell. Most product start with a max of 40% and then we are nickled and dimed out of about 10% of that. We require about 25% in an item to draw even so that does not leave much room for any profit. Weigh the minor profit on audio against the negative profit on a tv and we just about draw even.
So, without the high end retailer where are you going to hear the product? Who are you going to call when you need technical advice? What are you going to do when something goes wrong and you have no warranty?
Smell the roses... Without the high end dealer there will be no high end.   
You clearly did not think things through before making your post.

LOL, I've put tons of thought into it.  There are already plenty of mail order factory direct equipment sellers.  They warranty and service their products.  They mostly offer 30 day home trials with a money back option.  That's the future.  That's low overhead for the online retailer so they can survive with a much lower markup.

Their is just not enough high end market to support high end retail stores except in a few select areas. 

People are already buying lots of product via the internet, but they either get no warranty because they didn't buy from an auth dealer or they have to pay full dealer price but get none of the service that price warrants. 

I suppose you think it's just dandy for all the thousands of audiophiles that are without brick and mortar retailers to pay you full price for gear even though you offered no service beyond order taking.

[OzarkTom]

There are big manufactureres that have quotas for a dealer to meet each year. There are authorized dealers that secretly sells this way to keep their dealership intact.

[Phil A]

"The days of fixed prices and 50% retail markup for high end audio products are numbered".
I don't know what kind of crack you are smoking, I'd love to get a 50% mark up on what I sell. Most product start with a max of 40% and then we are nickled and dimed out of about 10% of that. We require about 25% in an item to draw even so that does not leave much room for any profit. Weigh the minor profit on audio against the negative profit on a tv and we just about draw even.
So, without the high end retailer where are you going to hear the product? Who are you going to call when you need technical advice? What are you going to do when something goes wrong and you have no warranty?
Smell the roses... Without the high end dealer there will be no high end.   
You clearly did not think things through before making your post.

There will be some left but they will get fewer and fewer.  Obviously a dealer can only carry so many lines.  There are high end brands today that I would like to hear but I have no dealer within a reasonable distance.  As more dealers disappear, the frequency of this will increase.

[Phil A]

While it doesn't say it is closing permanently (who knows), this is typical of what is happening out there:

http://www.soundbysinger.com/high-end-video/product_385

[FullRangeMan]

I've been watching this guy for months now.  Everything he sells is either brand new in the box or "just opened".  He is obviously in cahoots with a dealer and selling the stuff below manufacturer retail to skirt the dealer agreements. 

The days of fixed prices and 50% retail markup for high end audio products are numbered.  There's no reason to pay those markups anymore given the lack of retailers.  The manufacturers need to get a clue and just open things up to the internet and free market.  Then prices will plummet.  In the meantime, people like this will service the real market.  It's unethical, but it's the fault of the manufacturers and distributors.

http://www.audiogon.com/cgi-bin/cls.pl?spkrmoni&1286938099&/Bowers---Wilkins-B-w-805-Diamo

Hello Jaxwired,
I suggest the USA Hi-End dealers came live in my country, here is the paradise of Hi-Profit stores.
Take a look on some obscene prices:
Bryston B-100 amp    5,250 USdollars(basic version),  info from a local magazine June2006.
Bryston B-100 amp    6,850 USdollars(DAC version),  info from a local magazine June2006.

AYRE C-5XE universal player   9,600 USdollars, info from a local magazine June2006.

Van den Hul MC SILVER interconnect RCA 2,257 USdollars per metre, info from a local magazine June2006.
Van den Hul MC SILVER interconnect XLR 2,659 USdollars per metre, info from a local magazine June2006.

ASR Emiter 1 Exclusive integrated amp,  12,200 USdollars, info from a local magazine Feb2006.
DCS P8i2 CD-SACD player  19,000 USdollars, info from a local magazine Feb2006.

Crystal Cable Reference - speaker cable 2,4 metre stereo set 4,980 USdollars, info from a local magazine Feb2006.
Crystal Cable Reference - interconnect cable 2,4 metre stereo set 2,280 USdollars RCA or XLR, info from a local magazine Feb2006.

B&W 802D loudspeaker pair 14,000 USdollars, info from a local magazine Feb2006.
DYNAUDIO Evidence Temptation loudspeaker pair 42,000 USdollars, info from a local magazine Feb2006.

NAGRA PL-L line pre-amp 9,800 USdollars, info from a local magazine Feb2006.

ACCUPHASE C-2800 preamp, 19,900 USdollars, info from a local magazine Feb2006.
ACCUPHASE A-60 stereo power amp, 18,900 USdollars, info from a local magazine Feb2006.

KLIPSCH RF-83 loudspeaker pair 4,500 USdollars, info from a online shop ''on sale 25% OFF'' today.

The local Custom House taxes are 100% over product+ship+insurance, but these dealers receive back 70% from the Custom taxes as a tax bonus.
I do not think this kind of prices are fair or ethical, this look like a cartel to me.  This  consumer bullying will end one day, sooner or later.
I see online USA prices are very lower than these.
Regards, Gustavo

[decal]

Sure.  He only sells, never buys (check his feedback).  Everything he's sold for the last 6 months has been brand new or just opened and less than 2 weeks old.  He always posts a lame transparent excuse.  I haven't written down all the excuses, but they all are meant to convey that he is just a regular guy that changed his mind and is now selling.  Know anybody that just changed their minds 28 times on new gear for a 6 month period?  Ummm....no....guess not. 

It's either coming from a dealer under the table or it's hot.   Simple.

As for what I'm doing with this post, I only point it out to open discussion about high end retail and how poorly it is now serving it's customers.

Am I the only one here that has a problem with the OP accusing someone of doing something illegal and posting it on an open forum(It's either coming from a dealer under the table or it's hot.   Simple.)? Just curious.

[jaxwired]

Am I the only one here that has a problem with the OP accusing someone of doing something illegal and posting it on an open forum(It's either coming from a dealer under the table or it's hot.   Simple.)? Just curious.

What's wrong with stating the obvious?  Ok, how about this.  The overwhelming evidence would indicate an extremely high likelyhood of unauthorized dealer sales by this seller, BUT there is a tiny tiny chance that it's legitimate (but can't think of any possible legit explanation myself, nor has anyone offered one). 

Does that make you feel better?

[mhconley]

I absolutely have no problem with smaller retailers selling this way.  They make money, the manufacturers make money and I save money.  It's win-win-win.  I've purchased many pieces of my home theater and stereo systems through the years from retailers on Audiogon, Videogon and eBay.  None of them hid the fact that they were retailers but they did not advertise it either.  I always ask for and have received brand authorized B&M store receipts for every piece I purchased.  About half of the pieces I purchased were demo gear while the other half were brand spankin' new in sealed boxes.

I would not have been able to afford the quality systems I have today without the internet and retailers like these.  My $11,000 MSRP stereo cost me $6,500 and my also $11,000 MSRP home theater was $5,300.  It is the future of high-end audio retailing and it is here today.

And before anyone tut-tuts me for cheating my local high-end audio B&M store let me just say that I purchased every piece I have unheard based upon reviews and many hours of research.  I never once walked into a store and checked out a piece of gear then went home and bought it online.  (Well - I lie - I did see two of the HT items at Best Buy / Magnolia - but I wouldn't deal with those crooks of they were the last store on earth!)  When I last auditioned equipment at local shops I purchased from a local shop.

Martin

[Phil A]

I think there is a lot of activity on Audiogon of this nature.  I don't think there is anything necessarily illegal about it.  I bought a 3 week old Bryston DAC.  I talked to the seller by phone.  He got me a receipt from the dealer.  My impression of the situation is that he is well-to-do, gets special treatment from the dealer and buys lots of stuff.  I have more of a problem with the guy selling the Rotel amp who tells me he is protecting the dealer vs. getting me a receipt telling me the dealer is a friend but knows he is doing this.  He could simply have the dealer issue a receipt to him for an acceptable price to Rotel and sell me the unit.  There's another high end dealer in my area who sells stuff on Audiogon from a zip code where he lives vs. the store which is in another zip in a neighboring state.  He likely is doing this for some reason and it's not my business and I don't really care.  As Martin's post notes "I absolutely have no problem with smaller retailers selling this way."  I know dealers who have had good customers for years and sell to the customers after they move from the area.  They will often give them a break since they can't provide the same local service.  I'm sure some manufacturers who have dealers where the customer has moved would not be totally happy with the arrangement but I don't personally care.

[Elizabeth]

Some ideas. The dealer selling under the table may be having to buy in enough quantity to maintain the connection to the company, but because he does not have a large enough customer base, blows out stuff to other parts of the country (screwing dealers in those areas)
Dealers have to get rid of stock on site to pay the rent. They CAN sell it off at a lot less because it is out of area, and is just raising immediate needed cash.
Folks can have an illegal grey market connection to the  Chinese origin of many products: witness Parasound: no authorised dealer, no service. period.
The dealer network is a mess, nearly all of them have dealers with no store.
Many of the companies are trying to sort out who is really a dealer, and who is not. They got carrie away and now are paying the price for the confusion. i knew several dudes who are by appt only, and it is in a home. Sometimes a customers!! who bought the item from the dude.
Direct sales is in the future. I like having a few B&M dealers around. but even in my local million plus local market they are screwed. Only one seems well enough off currently. The other B&Ms are just bailing water as fast as they can, hoping not to capsize.

[TheChairGuy]

'Diverted' merchandise happens in many industries...it's not exclusive to high-end audio.

It's usually high-end something in some industry that's diverted...but definitely not exclusive to our little nook of the retail world.

John (25 years selling consumer products in various niches and geographical regions)

[lonewolfny42]

'Diverted' merchandise happens in many industries...it's not exclusive to high-end audio.

It's usually high-end something in some industry that's diverted...but definitely not exclusive to our little nook of the retail world.

John (25 years selling consumer products in various niches and geographical regions)

I'm waiting for a 'diverted' Magna Cart Flatform .... 

[BrassEar]

40 points is the normal margin for audio. It is MUCH higher for wire, cables, accessories, etc.
There are very few other retail businesses that still command 40 points.

Making big profits has been declared pure evil.  Didn't audiophiles get the memo?