Denon Backlash? (1 Viewer)

[TheLongshot]

Just a few comments.

I do agree that service plans are just a tool to make more money. I generally don't do them. Warrenties are different animals altogether. It means that the company will stand behind the the product for X years. That means something, especially for a purchase that I spent a ton of money on. Yes, it is factored into the price, but when something goes wrong, I'm glad that I have that to fall back on. As I said, my receiver failed twice (most likely lightning strikes). Both times, it was fixed for free. If it wasn't for that, I probably wouldn't be able to afford another one. So, yeah, I like warrenties.

I understand what people are saying about B&Ms. I certainly wouldn't support bad retailers. I mean, if a salesman doesn't earn the sale, why should he get my business. At the same time, there are some very good B&M stores out there, like AudioBuys. I mean, without B&M stores, how are you going to demo equipment? Usually, returning online equipment means paying for shipping it and paying a restocking fee that could be as much as 25% at some places. What if you bought a receiver and found out it doesn't work particularly well with your system? You might be out what you saved online.

Also, to expect a retailer to match a price that might be less than what they paid for it is ludicris. Usually, retailers set prices so that they can make a decent profit. There is some flexibility in what they can do and sometimes offer discounts on package deals since they selling more that way. That's at least how the good ones work.

The whole "Authorized Dealers" thing is there on one stance to give some peace of mind to the buyer that the retailer is on good standing with the manufacturer and can deal with these guys. Also, it cuts down on the grey market, where you may or may not get a good product. It is the risk you take when you buy outside the channels. If you want to take that risk, that's fine. Just don't expect Denon to back it up. They have their rules for sales, and they have the right of not having to deal with people who didn't play by the rules. Caveat Emptor, guys.

Jason

 

[Dan Hitchman]

How do any of you know whether or not the whole "Authorized Dealer" network isn't just a slick way of covering up price fixing?

Take Monster Cable for a huge example of that. Or, possibly HP products, etc.

Denon and others may (or may not) be holding warranties hostage to do just that, not because they care about B&M stores' future in the economy. Also, some (unfortunately only a handful of) states force manufacturers to honor their warranty claims no matter what.

Dan

 

[AntonS]

It is the risk you take when you buy outside the channels. If you want to take that risk, that's fine. Just don't expect Denon to back it up.

So why do you think Denon sneakily allows their products to go "outside the channels"? They easily can stop that. Or maybe they want it to be exactly like that?

Btw I do not expect Denon to back up "grey" market products. I would not buy such product anyway, they are asy to spot. But the policy of not honoring warranties of valid products sold in the US and at the same time allowing their "authorized" dealers to sell to "unauthorized" for re-selling just puts Denon in a very bad light.

 

[Marvin]

you miss out on the in-home audition, the generous trade-in policy, knowing that the person you bought it from is 5-10 minutes away, and has been there for a decade, or more.

The problem, at least in my case, is that there are no such dealers '5-10 minutes away'. There's a Circuit City and a Best Buy about 15-20 minutes away but they don't sell Denon.

Actually, all of the local small B&M's closed around the time these stores opened. So it's not just the internet that is driving local dealers out of business. The Denon website lists a bunch of authorized dealers in New York state, the majority of them in NYC, none close to where I am. So internet buying is the only alternative to CC and BB, and the only choice when it comes to Denon.

 

[Earl Simpson]

Just a little humor during this knife fight.
I though for a long time that B&M was a brand name.

 

[TheLongshot]

So why do you think Denon sneakily allows their products to go "outside the channels"? They easily can stop that. Or maybe they want it to be exactly like that?

What kind of control do you think they have? Maybe a retailer went out of business and a non-authorized dealer got a hold of them. Maybe an authorized dealer dumped a whole bunch of them. Maybe they are stolen. You don't know. The only "control" they have is to enforce their policy, which is their right.

Denon has the right to dictate the policy which they sell their product. If you don't like it, there are other companies that have different policies. Personally, I don't think Denon overcharges for their stuff.

Jason

 

[MatthewJ S]

Jerry , I am glad that you have a store to "browse" in ...
what would we all do if we didn't?...we probably would have to do what a lot of people (who's small local B&M's have closed-up due to internet compitition) do, which is rely on the ears of others whose experiance is unknown(and who usually have an agenda/or are getting paid/or have an ax to grind)and who have less acsess to equipment than those of us in retail. Now, there are good B&M'S / BAD B&m'S AS WELL AS GOOD SALEPEOPLE/ BAD SALESPEOPLE, if we don't like any people who work in a store, then we don't go back. The knowledge level of MANY on this forum FAR exceeds that of Many CC AND BB employees, and if you KNOW that you are better informed then most of the salepeople that you encounter,then the only thing that you gain from the B&M is the ability to listen to the equipment(and who needs this any way, it's all aboutr the features anyway,right?).If fewer and fewer of the mainstream consumer take the time to LISTEN to the performance of gear then it will, without a doubt (w/a few exceptions) get cheaper! I know how fond you are of Bose ,Jerry, and I isn't bose that is talking J6P INTO SACD/DVD-AUDIO...IT isn't the guy on the other end of the phone line at the e-tailers who is humming the differance for him either ...it is the salesman who DEMO's the quality differanc for the customer that will make these formats fly!.I don't mind the guys that are on this forum who wouldn't take up a lot of my time getting opinions on how to put a system together, or explain the differant formats, andf the fact is that there are damn few customers that I meet in a year that know much at all about this hobby, and of those that do ,they just want to hear the gear. Often, when I tell them that I will "take both pairs of speakers that you're comparing ,sir, into the other room and hook them up with whatever amp you would like to hear driving them" they will break out their own music and I may play a couple of tracks of my own and they will often appreciate the service...I think they understand the difficulty in doing that over the internet. tHE FACT IS THAT PEOPLE ARE SUSPICIOUS OF WHAT THEY CAN'T SMELL, HEAR, TOUCH,ETC, AND OUR COMPANY'S SALES ARE GROWING BECAUSE THE HOBBY IS ,AND PEOPLE'S EXPOSURE TO THE EQUIPMENT IS .I KNOW A LOT OF SALESPEOPLE WHO MAKE A MINT GOING TO THE HOUSES OF PEOPLE WHO BOUGHT GEAR WITHOUT KNOWING WHAT THEY WERE DOING(OR GOT BAD ADVICE FROM A BAD b&m or ON-LINE). My customers have me ...many need me...and to think that I am going to see millions of B&M customers disappear because of the internet is not well founded...

 

[Zbigniew]

Lot of frustration os caused by confusion between 3 market segments:

1) Custom installer; best example would be Bill Lucas (Hi there ; he does not do retail sale - if you want to buy 5800 from him, be ready to cough up full list price. If you want to bargain - wrong guy, wrong service. He charges full list - but he will install it, calibrate, and when you need help on Saturday afternoon before party because kid reset it, he will be there. Part of his services he charges for (and full MSRP is a kind of retainer fee) is his support, servies and help.

Such a shop will have a demo room, but it will not demo equipment - he sells experience.

2) Classic B&M small shop - for me it would be AudioVideoSoultions in Laurel, MD. They do have demo rooms, and you can mix and match components. They will do custom install, help you select equipment, and provide you with most help and support. They will let you loan units, demo them in store, or over weekend at home. Yes, quite often I buy from them - and usually they have very decent prices.

Such places are great for second hand equipment someone traded in.

If they get stuck on price, then kindly we part - and it happend a few times. Then you have 3rd market segment

3) Price (low price) is the king. For some products Internet is really great. Still, you take your chances.

I had a great luck getting Denon 5800 almost a year ago for $2200, delivered to my home - and it started interesting relationship with a great fellow. On other hand, I have painfull experience of buying Salamander mail order for 3.5 months, including confused shipments - an I saved only $100. Lesson learned; I do pick vendors very carefully.

I do not expect extended support nor installations.

I see no value in suspecting Bill of any bad intentions; he selected premium market segment, does great job there; if I will be able to afford his services - I will do in a jiffy. For the time beeing, I shop in some B&M - or on line. Each has it's place.

Regarding Denon policy - if in reality Denon is aware of how units are leaking form authorized into open market and does nothing abut it, penalizing consumer - it deserves a detailed review and correction. You cannot have it both ways - volume from selling to everyone without question asked, and support only selected on a arbitrary basis units.

_zjt

 

[AntonS]

Denon has the right to dictate the policy which they sell their product. If you don't like it, there are other companies that have different policies. Personally, I don't think Denon overcharges for their stuff.

The dirty side of their policy is that they explicitly disallow "unauthorized" sales, but implicitly support them so they can sell more equipment but want us, buyers, be held responsible.
Let's look at it from a different angle. You know what would happen if they stopped "unauthorized" sales? They would start selling a lot less units as there are just too many choices for us. Eventually they would have to lower the MSRP to boost the sales again. In order to stay in business, the "authorized" B&M stores (full of ignorant salesmen and with sloppy operations) would have to restructure, become more efficient, hire more professional force to keep the sales up. I'd be pretty happy with such scenario. But now Denon can hold ridiculously high MSRP and at the same time mainatin the sales volume by allowing their dealers to dump equipment for 20% over invoice. That stinks.

 

[TheLongshot]

Approximatey (I'm guessing the numbers here), for the new Denon 5803 invoice will be between $1900-$2500, so 20% markup is about $400-$500. The unit will appear online for about $2600 - $2900. Comparing to the 5800 which sells online for about $2300-$2500 wth MSRP of $3800 I don't think I'm far off.

Except that the 5800 is a couple of years old now. And as you are say, you are just guessing at these numbers.

Also, why would Denon give the dealers such a large margin? I'd say that they don't. They give the same margins that every other mid-fi receiver company does. I mean, equivilant receivers are usually about the same price across the board. Are you saying that the other companies are also gouging the customer? The price is what the market can bear.

As for Denon supporting unauthorized sales, you haven't given me any evidence of that.

As I said before, a company has the right to choose how to sell their products. If you don't like it, buy from someone else. Denon isn't the only one out there.

Jason

 

[KeithR]

This thread is so pointless...moderator?

If you want to vote with your pocketbook, than don't buy Denon...otherwise quit complaining.

My personal solution is to have more price protection by manufacturers---this makes resale value much hgher for all, and makes it less hassle as a buyer. Say, 15% is the most you will ever have a store sell your line....B&W is something like this as I recall.

Go look at B&Ws resale value...one of the few brands that you won't lose your shirt on....because people aren't buying them 40% off to start with. Bose, unbelievably, is the same way. I sold a Acoustimass set for 200 less than retail for a friend, as a favor.

 

[Robert George]

I'll add a few number to the thread since I am tight with a local dealer and the deal I get on the products he sells is based on a percentage over his cost, so I know what cost is.

In general terms (meaning there are deviations based on individual manufacturers, products, and dealer incentives), the dealer margin on electronics is around 40%. That's based on MSRP. Speakers is usually a bit more, 45% to 50%.

I just happen to have just found the first receiver in my experience that has a 50% margin between MSRP and dealer cost. The Pioneer Elite 49TX. MSRP is $4200 and cost is around $2100. Personally, I consider that kind of markup almost criminal, and I'm one of those defending B&Ms. On the other hand, not even Pioneer expects this receiver to to actually sell for $4200. This is one of the ways a manufacturer helps its dealers. By establishing a high MSRP this allows a dealer to offer generous discounts to attract customers and still be able to pay the light bill.

And finally, in the spirit of full disclosure, I ordered said Pioneer receiver from my local Elite dealer but he was unable to get one from Pioneer after a week and a half (backordered). I then turned to the Internet and was able to find one for, get this, 9% over cost (the cost figure I am aware of). I was shocked and so was my dealer.

 

[AntonS]

As for Denon supporting unauthorized sales, you haven't given me any evidence of that.

The evidence is pretty glaring - Denons are sold all over the Internet when such practices can be easily stopped.

 

[ChrisMM]

Ok... Crazy Eddie's isn't a good example I guess. I have purchased from them in the past without a problem, but maybe that's different now. Still, considering that I can buy a 3802 for $779 from JandR, that says quite a bit about my local B&M (who won't sell for less than $1199). Hell, I'd have to pay $799 for a 2802 if I bought it locally. What a joke.

I bought my Denon 2802 for $625 delivered to my door from an Authorised retailer (6th Ave)!

 

[Charles J P]

What kind of control do you think they have?

This is the exact kind of argument I wont accept from manufacturers. Try to find a new-in-the-box pair of even Paradigms performance series speakers on the internet through an etailer (ie not a classified on ebay or something). Then come back here and ask with a straight face "what kind of control do you think they have?" If more than one company can manage to keep their products off the etailers "shelves" then Denon can too. Look at Yamaha. You can buy their HT-R (sp) series off the net, but not their RX-V series. So companies can even control distribution of multiple lines. Dennon is full of crap, and I have lost a lot of respect for the brand because of their assinine policies. They benefit from unauthorized sales, and the consumer gets left in the lurch. Then to put the cherry on top, the bastards cite unauthorized sales (that only they have the power to stop) as the reason for increasing prices.

I have so far made all major purchases from B&Ms unless there is no dealer within a hundred miles or so. In those cases I choose my etailer wisely. Dennon just really burns me with their double standards policy. If the dealers were really unauthorized, Denon could track serial numbers and shut them down. It would be like if you let your dog off the leash and it attacked someone, and then you said "I didnt tell the dog to attack him". Its your dog and your leash, take control. Its Denon's product, and Denons dealer network, take control.

 

[John Morris]

Guys: Let's make our points, but still be nice.

First, I always thought that selling your product at double the cost is considered a 100% markup? If I sell a 49tx for $4200 and it cost me $2100, isn't my margin 100%? Well Webster defines margin as: the difference which exists between net sales and the cost of merchandise sold and from which expenses are usually met or profit derived. So, if we truly look at an items margin, then do we have to consider the sellers allocated costs to that item too? If so, if we compare a B&M and an internet seller, and both sell a 49TX at a 30% margin, the B&M's price may be $4130 and the internets price is only $2755... because the B&M's allocated costs are much higher. So, the next time a Tweeter store salesman tells you that his cost for the 49TX is $3300, not $2100, it is because he has included the following in his item costs: salesman commission, advertising budget, store costs, corporate warehouse upcharge, sales tax, etc. Considering this, the best way to get a deal at a local authorized B&M is by doing the following. Only deal with the store owner or manager; develop a friendly relationship over time with this owner or manager; buy any stuff that you need "yesterday" from them at full price, but remind them you expect a deal on the new HDTV you are gonna buy soon; help to educate their staff by bringing in review and info beneficial to increasing their sales; offer to use Avia to calibrate their HDTVs; let your friend, the manager know of your interest in used, close-out or especially demo gear and give them your phone number; and keep on the lookout for coupons or ads on what you want from either them or a local competitor. Finally, when you have your ducks all in a row, do your pricesearch both locally and internet and call your friend. Tell him you are ready to buy and ask him if he can find me a 49tx that he can sell to me for something close to the low price that you found. Remind him that you paid full MSRP on those other items and that you "really would like to give him my business rather than some stranger on the internet". Also tell him that you'll even buy his demo or a customer return at that lower price. If he says sorry, then say you'll think about it but that that price was quite a bit more than you can afford to pay right now since you also need some cables, power conditioner etc... Maybe, at this point, he will throw in some cables or offer the other gear at cost? If not, still do not close the door. Tell him you'll think about it and let him know. Then, call all of the other branch stores of that chain and ask to speak to the manager of those stores. Ask them if they have a demo unit that they want to sell? If so, call your friend and have him bring in that demo unit so you can buy it. In many cases, selling an item that the store does not have on inventory increases that stores profitablilty statement, on which the manager is incentived. If all fails, and you still want to buy from an authorized seller, call the manufacturer directly. Tell them that you do not like your local dealer and can they recommned one that will sell to you over the phone and ship the item? When I did this, depending on the manufacturer, I've received the following answers: No; yes, and here are some phone numbers; buy directly from the manufacturer; buy directly from the area distributor; permission to buy from an un-authorized dealer. If the answer is no, I'd suggest buying a different unit from a different manufacturer. That company does not respect the consumer nor want your business.

 

[Robert George]

Perhaps my use of the term "margin" is incorrect. When I say a 40% margin, I mean that the dealer cost is 60% of MSRP. In the case of thew Pioneer 49TX, the dealer cost is 50% of MSRP. If the dealer sells the piece for MSRP, he gets 50% of the selling price for himself.
P.S.
John, buddy, one word...paragraph.

 

[John Morris]

John, buddy, one word...paragraph.

Obi:Good Advice. Methinks I type like I talk...

 

[Jeffrey_Jones]

Hello,

Several people have mentioned shopping at Audio Buys in Virginia. I use to be a sales associate in their Manassas and Fairfax stores and I was the assistant sales manager in their Arlington store.

Our electronics were usually priced at a 25% - 40% markup. Speakers were always marked up at least 50%. Interconnects were marked up anywhere from 60% - 100+%. These figures were true for both home and car systems. Higher end equipment (Meridian, KEF, etc.) was almost always priced at or near MSRP. Returning customers or people that knew how to negotiate would usually get a 5% - 15% discount. More if we could or if one of the owners was involved in the sale.

Now that I am not in the business and cannot get my equipment direct from the manufacturer I find myself buying most things online. I only shop at reputable retailers and I always try to buy new products that include the manufacturer’s warranty. I have yet to be burned. I have been burned by B&M stores in the past.

I find the assumption that all online retailers are corrupt, bottom feeders, pushing B-stock unauthorized equipment to be shocking. Internet retail has as much of a future as B&M when done correctly. As I said before, things will settle down in the long run. Most online retailers will have to charge more and most B&M retailers will have to charge less.

Thanks,

Jeff

 

[Lewis Besze]

I was told by a dealer that Denon also gets the 60% of the MSRP,but that was 5 years ago don't know if that changed.
BTW Obi will you donate some of your savings to the "recently went out of business B&M store owners, due to the irrational consummerism" s charity fund?