Internet-only vs. retail speakers

Discussion in 'Speakers' started by eddieZEN, Jan 2, 2005.

  1. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    Most Internet-only speaker manufacturers claim that by cutting out the middleman, they can offer a much better quality product for the same or better price as retail speakers.

    Just an informal survey: is that just an advertising cliche, or is it really true?

    Someone on another thread suggested that retail speaker manufacturers who have much higher production output can match or beat Internet-only rivals even WITH a middleman due to greater overall volume.

    For instance, right now I'm choosing between the Ascend CMT-340s at $566 shipped, versus Paradigm Monitor 5s at $541 local retail including tax.

    Leaving aside the subjective issue of which speaker sounds "better," if this "no middleman" claim is true then that means that the Ascends are going to have more expensive parts and construction.

    Anyone here familiar with the economic workings of speaker makers? I'm certainly not. Just curious...
     
  2. Jon Lane

    Jon Lane Stunt Coordinator

    Joined:
    Apr 2, 2003
    Messages:
    118
    Likes Received:
    0
    Hi eddieZEN,

    I have a dog in this race so take this as you will. 20 years experience in the sales, marketing and distribution of hifi tells me that I-direct is undoubtedly less expensive, item-for-item, and averages at least 1/2 off. The advertising overhead alone for conventional distribution brands can be double the cost of the product.

    In our case, we take the distribution model one step further by using nearly 100% virtual operations -- meaning ultra-low overhead. In this day and age everything other than technical and marketing design along with customer communications is handled outside our four walls.

    I'll also predict that over the next five years, "convergence" will drive down prices even further as the PC side of consumer hardware impinges on the standard high-margin, high-cost CE side of consumer hardware. While there isn't a direct correlation between loudspeakers and say, PC video displays, the pressure that's already cut costs for PC-category merchandise will continue to influence audio.
     
  3. David Bikeman

    David Bikeman Stunt Coordinator

    Joined:
    Aug 15, 2004
    Messages:
    164
    Likes Received:
    0
    Hi again Eddie,
    I spent most of the first twenty years of my adult life at various stages of the retail chain. What Jon says sums up my experience. Running a B&M with all the related expenses to the suppliers as well as the retailer costs A LOT. This is true for almost all businesses, not just hi-fi. There's an old joke.
    Know how to make a small fortune in a small retail business?
    Start with a large fortune.
    I haven't run an I-direct business but I can think of a lotta ways to overcome the volume end of the retail business. I'm not saying that I-direct is a better value than a B&M just because it's I-direct. There are probably just as many ways to screw-up an I-direct as there are a B&M. But if it's done right, I can't see there is much of a contest. Going with a company that gets it right is the trick. Ascend gets it right and from the feedback on the groups, theaudioinsider (Jon) does as well.
    Audition at home. That's all that will tell if the decision is right. The forums are just a starting point.

    David
     
  4. paul clipsel

    paul clipsel Stunt Coordinator

    Joined:
    May 31, 2004
    Messages:
    163
    Likes Received:
    0
    IMHO internet direct can* save buyers lots of money over regular B&M distribution. I would also agree that the pressure to be competitive will drive more buyers and manufacturers to direct sales. There is already a strong internet direct trend as you can see on forums and newsgroups.

    *That's not to say B&M can't offer good value or that direct always offers the best value.

    But with all things being equal its obvious that direct (when done right) will offer the best value for us buyers.

    PC
     
  5. PaulDA

    PaulDA Cinematographer

    Joined:
    Feb 9, 2004
    Messages:
    2,693
    Likes Received:
    92
    Location:
    St. Hubert, Quebec, Canada
    Real Name:
    Paul
    As a B&M purchaser, I'd just like to second the recommendation to audition at home. I did so and went with a brick and mortar speaker, because I liked its sound the best (which doesn't really have anything to do with HOW you purchase). So I agree that for dollar cost, I-direct will almost always be less expensive, but speaker preference is subjective and only an audition can determine a winner. While I auditioned a number of speakers at the stores, I wouldn't choose among the finalists without a home demo (and any B&M that won't let me do that won't see much of my wallet).
     
  6. Ray Tsui

    Ray Tsui Stunt Coordinator

    Joined:
    Mar 2, 1999
    Messages:
    60
    Likes Received:
    0
    I think Internet direct is an excellent way to go, For the same price as a B&M speaker, you can get a internet-direct speaker that is larger for the same amount of money.

    But as always, it's the expertise of the company that matters in the end.

    For example, I see a lot of people praising the Axiom line. I had heard Axiom in the past (at one point they sold them at B&M) and I was throughly unimpressed with them. A friend of mine bought a set of M40's, and although you get a lot of (sizewise) speaker for the money, I really wasn't all that impressed.....I'm glad I never bought one (I was thinking of trying them based on all the positive reviews). It goes to show that listening to a speaker before you buy is REALLY important. Reviews are no substitute for your ears.
     
  7. Girish

    Girish Stunt Coordinator

    Joined:
    Aug 18, 2004
    Messages:
    202
    Likes Received:
    0
    Location:
    Brecksville OH
    Real Name:
    girish
    Try to get best of the two worlds i.e buying high quality speakers which are made by reputable companies off the internet at a considerable discount. A lot of companies donot allow online sales of thier products unless they are discontinued. Once discontinued they can be had for a lot less. Examples are B&W, Pradigm, Polk, Infinity etc. They are time tested brands and can be auditioned before buying.
     
  8. Jimmy Harmon

    Jimmy Harmon Stunt Coordinator

    Joined:
    Aug 13, 2004
    Messages:
    90
    Likes Received:
    0
    I think Paradigm offers as much or more value as any B&M brand so your comparision between Ascend and Paradigm is probably a closer one than it would be with most other B&M brands. If you compare the internet directs with the boutique brands it's no contest. Ascend offers excellent value, but I'm sure Paradigm does have some cost advantages, including volume, that make it a closer contest.

    I think your question is, with the two comparably priced speakers you have identified, is the internet direct speaker, an Ascend 340m in this case, constructed of higher quality and/or more expensive parts than the B&M speaker, a Paradigm Monitor 5 in this case. I have no idea. I can tell you that the 340m is an excellent sounding speaker, but maybe someone in the know can jump in here to better answer your question.
     
  9. Mike Dzurko

    Mike Dzurko Stunt Coordinator

    Joined:
    Apr 11, 2000
    Messages:
    78
    Likes Received:
    0
    Direct began long before the internet. We've been consumer-direct for over 27 years. One large difference for us: In the first 17 years we printed and mailed a costly paper catalog about twice a year. Since going on-line with our website, (exactly ten years ago this month), we've only done two paper mailings . . . a very large cost and time saver for us.

    Cost is a major rationale for going direct. Yet, to me, three other factors are equally important:

    A) The consumer interacts directly with the manufacturer. The advantages here are very obvious.

    B) Consumer - direct facilitates in home demo, something I think is very important for almost all audio purchases.

    C) Consumer - direct can be very convenient for many people. Sure, there are some excellent B&M operations. However, many people do not have good B&M outlets within a reasonable distance they can work with. Direct to your door can save a lot of running around.
     
  10. John Garcia

    John Garcia Executive Producer

    Joined:
    Jun 24, 1999
    Messages:
    11,571
    Likes Received:
    24
    Location:
    NorCal
    Real Name:
    John
    Paradigm is a tough one to compare to, as they make a large percentage of their own components, so they are able to keep costs relatively low. Paradigm offers a very good value for the money, but there is still a dealer mark-up at any B&M (I've seen the dealer cost sheets), because they have to make money too. If you look at it in terms of what you are asking, the Monitor 5s cost less than what you are paying for vs the Ascends. It really is simpler than that to me though: for that money, I'd get the better sounding speaker, since that IS the most important factor, regardless of internet direct or B&M.

    I used to own Monitor 5s. I now own internet direct speakers that I did an in home audition of... Do I feel I got better sounding speakers for my hard earned $$? You bet [​IMG][​IMG]
     
  11. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    Jon,

    The thing is, how does the consumer know that the Internet-direct company doesn't just keep the savings for itself?

    For example, let's say Speaker A costs $400 to make and retails for $800 at most B&M places. What's to stop an ID maker from making Speaker B which is very similar to Speaker A for $400 and sell it for $800 while swearing that: 1. Speaker B sounds just like Speaker C which retails for $2400 and 2. the consumer's getting a big break buying direct?

    The consumer who's looking at $800 speakers will likely never even bother to audition $2400 speakers (just like the Ford Mustang buyer is never going to go test drive a Porsche), but he wants to feel like he's getting a great deal, so he buys the ID speakers instead and pats himself on the back, while the ID maker laughs all the way to the bank.

    I guess part of the reason I wonder about that is because with the sole exception of Fluance, as far as I know there are no ID speaker makers who specialize in the real low end, by which I mean the kind of $100 speakers sold at chains like Best Buy. Wouldn't it stand to reason that if Sony can make a crappy speaker for $20 that Best Buy sells for $100, then some enterprising ID maker can come up with a similar speaker for $20 and make a nice profit selling it for $60-70?

    The other reason is that there seems to be no Robert Parker (the well-respected independent wine critic) in the audio industry, so where does the consumer go for accurate and unbiased information? Audio magazines all rely heavily on advertising so their integrity is open to question. Internet forums and review sites like epinions, audioreview, and Amazon are all susceptible to paid shills posting bogus reviews and opinions. Consumer Reports magazine is clueless (they hold up Bose as the champagne of speakers).

    I guess what I'm saying is that if I were an ID manufacturer, I would go out of my way to educate the consumer on what CONCRETE and MEASURABLE things to look for when shopping for speakers, and provide as full and detailed specs on my own products as possible. For example: size, weight, and type of magnets used in the drivers; MDF thickness and bracing/construction; prices, pros and cons of different tweeter/woofer materials, etc.

    I know that in the end all the specs in the world can't replace subjective listening which can only be had through auditioning different speakers (in-home if possible), but surely at least showing how much different features/construction cost relative to each other would go along way towards creating something resembling objective transparency for the consumer.

    Call me a dreamer but surely there must be some way to make it easier for the consumer than having to bring 4 different sets of speakers into his home at the same time to compare them properly!

    OK, end of rant. I don't presume to tell you how to run your business, I'm just venting... [​IMG]
     
  12. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    Jimmy,

    > I think your question is, with the two comparably priced speakers you have identified, is the internet direct speaker, an Ascend 340m in this case, constructed of higher quality and/or more expensive parts than the B&M speaker, a Paradigm Monitor 5 in this case. I have no idea.

    Exactly...and as I was asking Jon, why don't ID makers provide that info if they truly indeed are offering consumers such a huge price advantage?

    I mean, if I were shopping for a car, I can easily see why a Lexus costs so much more than a Hyundai just by reading a detailed specs list. Why isn't this experience available to audio consumers now that we have ID makers grappling for market share?
     
  13. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    John,

    I'm curious, what are the ID speakers you have now?
     
  14. Jon Lane

    Jon Lane Stunt Coordinator

    Joined:
    Apr 2, 2003
    Messages:
    118
    Likes Received:
    0
    You touch on a number of pertinent points, eddieZEN. Funny you should mention Robert Parker – we just opened a modest ’94 Napa Cab…and having just about completed an analysis of about 100 brand-name drivers over the last 30 days, was struck again by the complexity of the speaker design process. Winemakers must also sleep very little.

    I have a commission to build a Wilson-class loudspeaker with 94dB/1W/1M, 50Hz response, but in under 100 liters. The variables don’t seem too daunting but the process of selecting drivers was maddening. Perhaps like winemaking, juggling all the parameters in a 3D chess match of compromises points out the difficulties of making a decision that affects your mortgage payment. Fortunately this particular project doesn’t…yet.

    My point is that a lot of thought goes into developing a product/distribution/marketing strategy. All I can say is that TAI doesn't inflate prices. In fact, our margins are on the lower side for this business model. Here’s an example:

    15 years ago as a B&M I sold a lot of small 5.25” and 6.5” imported monitors. Real wood, classic flat sided box, metal drivers, decent crossovers, fine sound. In 1989 dollars, we got $1000 to $1499 the pair all day long.

    Today I feature a 6.5” monitor that nets about two-thirds more internal volume, has easily as good or better drivers, and features a hand-finished bentwood cabinet with book-matched hardwood veneers and piano finish. This product is half again more speaker than the $1000+ monitor in all areas, and we post it for sale at $449 all day long.

    I know what my cost was in 1989 and I know what it is today. I have to sell at least twice as many speakers today, not including inflation – those were 1989 dollars – to earn the same net.

    You mention chain stores. As far as the base of the retail pyramid goes, there’s always going to be mass-seller speakers. There was ten years ago, there will be ten years from now. That business model is fairly brutal and, IMHO, the requirements for quality and performance value are extremely relaxed, to say nothing of the experience and guarantee of satisfaction.

    Should we expose more of our product at TAI? Absolutely! In fact my new year’s project is a major site redesign to do just that. I do indeed have a lot to say that I’m not saying and I regret that our low-cost model simply doesn’t lend itself to lots of IT and marketing. Again, we’re selling a product at some half to one-third of what B&M – in my experience at least – can cost for the same basic item.

    So we rely on a 30-day return policy instead of all the high-cost extras that would price that $449 monitor at twice the price (or maybe three times when adjusted for inflation) had we paid for the usual marketing overheads.

    In exchange, I-direct offers 30 days in your home, no questions asked. And with 25 bucks to ship a pair, and a return rate literally lower than I'd bother to calculate, nobody loses.

    In the final analysis, for your money you get product, not programs.
     
  15. John Garcia

    John Garcia Executive Producer

    Joined:
    Jun 24, 1999
    Messages:
    11,571
    Likes Received:
    24
    Location:
    NorCal
    Real Name:
    John
    I have GR Research A/V-2s and A/V-1s. Great company to deal with too. If you have woodworking capabilities and are a handy, you can save yourself some $$ and build the cabinets yourself.

    pic

    My sub is an SVS, previous one was an HSU.

    I completely understand where you are coming from Eddie, and it's tough to get down to just the specs and expect to have a good idea of what you are really comparing. As you are already aware, numbers alone won't tell you if you will like a speaker.

    IMO, the typical ID company isn't looking just to turn a buck. They are in business because they like what they do and that usually translates into the desire to produce the best product they can. What I have found is that ID speaker makers do tend to give you a better product for the same amount spent at your local B&M. As Jon notes, the money is allocated toward the product rather than marketing, so the product is a better value.

    I have found a few speakers that I liked as much or more than mine, and they both cost more than twice the price. At the same price point as my A/V-2s, I have not found many speakers at B&M shops that are capable of similar performance. It may sound cliche, but it's the truth.
     
  16. Chris Fleming

    Joined:
    Oct 28, 2004
    Messages:
    38
    Likes Received:
    0
    I'm going to add a twist to this discussion. I am in the same place as EddieZ. I want as much speaker (in terms of quality rather than size) as possible for my money. But I also LOVE to dream. I read the Hi-fi and home theatre magazines, and drool over the equipment featured, most of which will always be beyond my means. I mean, its cool to read reviews about high-end speakers, and see the pics, etc. But when I see $11,000 a pair or $3500 for a center, I just have to laugh. Not because the speakers in question aren't world-class, but I'd never be able to justify that kind of outlay, no matter what my financial situation was.

    It all comes down to the fact that I WANT world-class sound (the kind that makes ME smile when listening) at a price point that will still allow me to send my kids to college! LOL!

    So there it is. I'm cheap, and I admit it!
     
  17. Max F

    Max F Second Unit

    Joined:
    Jun 26, 2004
    Messages:
    250
    Likes Received:
    0
    I feel fortunate that we have so many choices. While great sound isn't cheap, it certainly can be affordable. These are good times for audio (maybe not for music [​IMG] ).

    Oh and Eddie, just buy the damn Ascends already. You know you want them. [​IMG]
     
  18. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    Max,

    I know, I know. Can't decide between their 340 or their 170 though, maybe I'll order a pair of each and send back the one I don't want.

    Also not sure which one to use as a center channel, I am leaning towards the 170 but keep wondering, "what if the 340 is really so much better it'd be worth paying extra for?"

    I'm freakin' hopeless, I know... [​IMG]
     
  19. Jeremy_R

    Jeremy_R Stunt Coordinator

    Joined:
    Oct 4, 2004
    Messages:
    105
    Likes Received:
    0
    I can't seem to find a review comparing the 170 to the 340 either.
     
  20. eddieZEN

    eddieZEN Second Unit

    Joined:
    Nov 30, 2004
    Messages:
    411
    Likes Received:
    0
    Yup, the 170 has about 10 times more individual and press reviews---I know that's largely because the 170 has been around a lot longer, but it still worries me...where are all the raving critics for the 340?
     

Share This Page