[Russell Dawkins]

ha ha i never consider them my enemy, it's just that the price tag is always sky high here in my region.   my dealer's sticker on a 14B SST SQ = ~13500 USD excl. tax.   BP26+ MPS2 = ~6700 USD w/ remote 

  i'm a poor man, so i must knock at least 20%, sometimes 30% off that tag...

I suppose it can be a regional thing. If there is an expectation that the customer will want deep discounts before they will buy, then maybe a survival tactic on the part o f the dealer would be to inflate the price so he can survive after a deep "discount". In pro audio, the msrp is usually substantially over the "street" price and the industry seems to be trapped in that scenario.

Having been in retail, I know the customer I have the least respect for is typified by one case I remember where the guy took about three hours of our time in the process of assembling the most cost-effective system answering to his needs, and then have him grind us down to the lowest price we could survive on. He then went away to "think about it" and phoned the next day from the next city, saying he had been offered the same system for some trivial amount less and did we want to match it? We decided we couldn't/wouldn't match the price and wasted 3 hours.

He may have been a "poor man", too, but he had the choice between making an enemy and lowering his aspirations a little and playing fair.

[Devil Doc]

Maybe it's because I'm older, but I never expect a discount from a company I haven't established a relationship with. i.e bought enough of their stuff, at the price they're asking and they know me by name.
A previous poster mentioned how the price of raw materials has sky rocketed. We're at war folks. It's what happens. A personal experience: Before all the turmoil in the Middle East, I bought a ton of lead shot. It cost me $12.50 for a 25lb bag. A few weeks ago, I was offered $50 a bag. I've seen it for sale for $70 a bag. That's a pretty good return on my investment. There's a reason why junkies are stealing man-hole covers and Iron cemetery fencing.

Doc.

[Elizabeth]

One (former) dealer always had price tags on the equipment that were a good 15% to 20% over the suggested retail, and then always had sales with 20% off.... i guess that dealer was able to sell stuff 'on sale' to some customers who did not know.. But they eventually went under. Once burned twice shy i would bet. They went under well before the current economic problems.
At THAT place i always had to know the actual retail price BEFORE I made any overture about buying stuff. Then it was OK.

The problem of selling below the threshold of staying in business is pretty tough.
I can see if a dealer has some stuff they overbought, or just want to free the cash in that (slow moving) product. But they cannot do major discounts on a regular basis and stay in business.
Demanding extreme discounts is sort of like being the vulture waiting for them to die...

I discuss the prices of my stuff, and sometimes we come to a mutual agreement on what would make BOTH of us happy enough.
So I like a little love back too, but it is not a war, nor even an argument.

added: another dealer who did die in the current economic downturn was the victum of inflated dreams. They had a decent store in a strip mall. That store had several rooms for demoing stuff, and they had a good two channel to video ratio (50%/50%)
So they decided to move to a much bigger store, a stand alone which was far more rent, and far more prestigious a little down the road.
Big opening with a huge amount of flat screen stock (this was right about the time of the big growth in flat screens) So the new percentages were 80% video/20%two channel.
Well they then had to go head to head with the big box stores, who could ALWAYS kill them on price.
Took a few years but they gradually stopped all two channel sales. (when that was the original focus of the store) The music side dropped to a few dozen receivers and surround type speaker systems. They went bankrupt.
When I retired , no money was spent there. i spent $20,000. at the store that still stuck to a viable two channel model. And whom had a great selection of two channel stuff. Lucky i have known them for twenty five years..
The other stores in my area are basically hanging by a thread, no product, and no future.

[Phil A]

I remember reading about 10-12 years back the average final margin of a high end audio retailer is 3-8% after expenses.  Since then, the internet has taken a bigger chunk of business.  So I guess it depends on lots of factors like rent, business volume, etc.

[Diamond Dog]

I think a smart business is able to gauge what their their customers can and are willing to
 pay.
Some people want the best/ have the money, and will pay MSRP, with no questions. Some will pay close
 to MSRP, because they believe the product is the best and it is worth it. Some people know its the
 best but need to stretch their dollars a bit more. In this case the business will tend to give this person
 a bigger break, knowing the person will probably return for future purchases(myself). I have built a
 good relationship with such a business. Of course there must be a reasonable middle ground for both parties.
For the smart business its a win win.

Precisely. The dealer I patronize sees things that way and as a result, he does a good business. So negotiate by all means but here's to having no d-baggery emanating from either side of the sales counter. 

D.D.

[vegasdave]

Hi All,

Just be aware that once the product gets discounted to the point it does not support the cost of doing business the product will disappear from the market

james

Interesting...but what is wrong with getting a 20 percent discount? I mean it's not that much, you know?

[werd]

All's fair in love and war, and audio gear haggling.....  . Whats got me urked is the price of U.S gear in Canada now. Hasn't anyone told these distributors that the Canadian dollar is higher than the U.S. ? The retail on stuff coming in from the states is considerably higher than the retail I see from the U.S. dealers.

For eg. A pair of Thiel 3.7 go for 14k in the U.S. and up here they are 18k retail. WTF?

[won ton on]

Hey Werd do you live in the great white north.bulington ont here.

[werd]

Hey Werd do you live in the great white north.bulington ont here.

Saskatoon Slowscratchalong.

[Elizabeth]

The reason for the USA to Canada markup is the country distributor wants a cut.
So the product probably goes from the USA to the Canadian distributor, THEN to a dealer. Your big markup is that added link in the Canadian distributor.
In Europe they have the VAT tax to add on to the prices of US goods sold there.
I do not know if Canada has a similar or comparable tax.

I would think??? Bryston is a direct to it's US dealers.
(I know Bryston has a repair facility in the USA, to save the crossing border hassles for repairs.)

[adol290]

All's fair in love and war, and audio gear haggling.....  . Whats got me urked is the price of U.S gear in Canada now. Hasn't anyone told these distributors that the Canadian dollar is higher than the U.S. ? The retail on stuff coming in from the states is considerably higher than the retail I see from the U.S. dealers.

For eg. A pair of Thiel 3.7 go for 14k in the U.S. and up here they are 18k retail. WTF?

I hear you.

Integra, Marantz, Denon, all 30% higher in Canada.

[BobRex]

Interesting...but what is wrong with getting a 20 percent discount? I mean it's not that much, you know?

If you are a big box store and can make it up though volume, it's not a big deal.  If, on the other hand, you are a small B&M with rent, employees, and floorplans, it could be the difference between making your margin and closure.  I worked at a very good B&M during the 80's recession.  There were weeks whne we were lucky to sell any home audio.  At that point we survived on car audio.  That was back when audio was fairly common.  Today?  I can seewhere many stores are probably suffering. 

I've watched a number of stores close because the owner thought that deep discounting could be made up through volume.  It's a fairy tale. 

This idea that retailers should take a deep discount just to make the sale is bovine excrement.  Tell you what, become a dealer and tell the manufactureres that you won't buy at their prices (after all, you are buying what they are selling) , instead you want a 20-30% discount off of your cost.  See how far that gets you.

[Elizabeth]

Then companies give a discount to big buyers, so the small B&M has a second strike against them trying to go head to head with the big box stores.
The one really successful dealer here drops any manufacturer as soon as they start selling at the big box stores. He cannot possibly compete with them on price

[BobRex]

I hear you.

Integra, Marantz, Denon, all 30% higher in Canada.

Yeah, but those are all Japanese brands that have a Canadian distributor.  The US has absolutely nothing to do with that pricing structure.

[vegasdave]

If you are a big box store and can make it up though volume, it's not a big deal.  If, on the other hand, you are a small B&M with rent, employees, and floorplans, it could be the difference between making your margin and closure.  I worked at a very good B&M during the 80's recession.  There were weeks whne we were lucky to sell any home audio.  At that point we survived on car audio.  That was back when audio was fairly common.  Today?  I can seewhere many stores are probably suffering. 

I've watched a number of stores close because the owner thought that deep discounting could be made up through volume.  It's a fairy tale. 

This idea that retailers should take a deep discount just to make the sale is bovine excrement.  Tell you what, become a dealer and tell the manufactureres that you won't buy at their prices (after all, you are buying what they are selling) , instead you want a 20-30% discount off of your cost.  See how far that gets you.

Well, I can tell you if you buy a Bryston amp from a pro audio dealer you will get 30 percent off. I know I did. Why can the pro audio guys do this and not the high end stores? Something's going on here. The pro audio guys have the same expenses and taxes as a high end store.

[BobRex]

Well, I can tell you if you buy a Bryston amp from a pro audio dealer you will get 30 percent off. I know I did. Why can the pro audio guys do this and not the high end stores? Something's going on here. The pro audio guys have the same expenses and taxes as a high end store.

I never sold pro gear so I can't answer definitively, but here's my hunch:  Most pro gear stores also sell instruments and instrument accessories.  From what I understand the markup on that stuff is much higher than the electronics markup.  As such, PA electronics more than likely isn't the pro store's bread and butter and they are willing to take a hit on their margins knowing that it's made up elsewhere. 

That's simply not the case with audio stores.  The electronics represent a substantial portion of their total sales (40%+) and they have less product to fall back on.

That or the cost structure is different.  Maybe James could speak to that.

[James Tanner]

^^^^^^^^^^^^^

Correct - Pro dealers have grown up with low margins as a normal course of business so they tend to discount at greater levels than Consumer dealers. We have very few Pro dealers now as most have gone away.

james

[vegasdave]

I never sold pro gear so I can't answer definitively, but here's my hunch:  Most pro gear stores also sell instruments and instrument accessories.  From what I understand the markup on that stuff is much higher than the electronics markup.  As such, PA electronics more than likely isn't the pro store's bread and butter and they are willing to take a hit on their margins knowing that it's made up elsewhere. 

That's simply not the case with audio stores.  The electronics represent a substantial portion of their total sales (40%+) and they have less product to fall back on.

That or the cost structure is different.  Maybe James could speak to that.

Thank you for the info.

[vegasdave]

^^^^^^^^^^^^^

We have very few Pro dealers now as most have gone away.

james

Any particular reason for that, James?

[James Tanner]

Any particular reason for that, James?

No profit - no business

james