I want a middleman local Retailer! They are definately worth ...% ? (1 Viewer)

[John Morris]

Wanting to get more than one can afford (or simply more than one wants to spend) is not a God given right.

Well, I don't know what that means, since there are no guaranteed God given rights except to die once we are born. However, consider this example:

I can afford to spend $1600 on a new preamp/processor and a new subwoofer. Thankfully, Outlaw Audio sells direct to me and the 950 therefore, only costs $900. With the $700 I have left, I can now also buy a SVS subwoofer and probably a few interconnects. Mission accomplished.

However, now pretend that SVS and Outlaw have decided to sell their stuff only through Tweeter and no longer will sell direct. Tweeter goes ahead and marks up the 950 and the SVS 25-31 to match the rest of their gear for sale. Suddenly, you can only afford to buy the 950, and not a subwoofer because of non-discounted middleman markup.

Now, consider that because of lagging sales, SVS and Outlaw also give their product lines to Onecall, J&R, and Oade Brothers to sell online. Suddenly, those folks with only $1600 can once again afford to buy both the 950 and the 25-31 subwoofer. Those who need the services of a local retailer could still get the 950 and the SVS locally; AND those of us with limited budget who don't need retailer hand holding can get the best gear our money can buy.

It seems to me, that allowing authorized online retailers the chance to sell these restriced products provides increased sales for the manufacturers without limiting the choices we have as consumers.

 

[Bhagi Katbamna]

The dealer has a right to make a profit and the consumer does not get to determine what the profit margin will be. Regards.

Eventually, only the consumer determines the profit margin.

 

[MarkR]

Bill: I agree completely with you that the dealer has the right to make a profit. I have nothing against anyone making an honest living.

Let me preface my comments by stating that my opinion is based on my limited knowledge of authorized retailer agreements, which has been gathered anecdotally. I have not written any of these agreements, nor have I even seen one. If anything I state below is wrong, if there are any dealers in the audience, please correct me. I am wrong constantly in real life, and am used being "righted."

Perhaps again I was not clear. The improper price restraint is set by the manufacturer, not the dealer. The dealer certainly has the right to charge whatever em wants.

The problem arises where the manufacturer attempts to exert control over the product after the sale to the dealer. Once the manufacturer sells the equipment to the dealer (and I assume this is not a consignment, but an actual sale - if not, forget everything I say), then the manufacturer has no legal right to control the price of the product.

However, the manufacturer does control the price of the sale of the product from the dealer to the customer 2 ways. First, the manufacturers limit the authorized dealers in an area, thereby preventing local competition. Second, from what I understand, the manufacturer restricts the price at which the dealer may sell to the customer. This is IMHO is merely a thinly-vieled attempt at price fixing. Whether this is done by specifying the minimum price a product may be sold or by threatening to revoke a dealers authorization, both actions are improper.

If the audiophile market was as large as the computer industry, don't you think the DOJ would be looking into the authorized retailer agreements of some of these manufacturers?

 

[John Tompkins]

There is still something special about being able to get the product instantly. No worries about shipping damage, delayed shipping, not to mention getting ripped off. Just get in your car and drive a few miles and wham its in my rack. For that I would pay maybe 15% but no more.

Having said that I have bought almost all of my equiment online, at least when I can so a little patience, gotta have it NOW.

 

[Bill Lucas]

Mark,

Good points. I am an authorized dealer of many products. I do custom installations so retail is not my venue. Non of the manufacturers I've dealt with now or in the past have given me a price that I must sell a product. They *have* given me a minimum price at which I can advertise their product and they do require that I do not tranship their product into another dealers area. I have no problem with either policy. The price I charge for a product is tied into several things. The services I provide (i.e. system design and engineering, installation, training and after the install servicing) take a great deal of time and effort to provide. Many B& M retailers have high overhead and to maintain the prime location many operate, staff the location to satisfy the times of day you'd like to visit and stock the product so you can walk out with your purchase is no mean feat.

Companies like SVS and Outlaw provide a valuable service to the enthusiast who wants the absolute most bang for his buck, has the technical aptitude and is willing to take the DIY route. Believe it or not, you guys are in the vast minority when it comes to people with home theater systems. Most would rather (and are willing) pay someone to design a cohesive, functional, easy to use system that has a high level of performance. Regards.

 

[MarkR]

Bill,
Like I said, I have no problems with dealers/retailers (other than snobbery). I enjoy the opportunity to visit their stores and listen to new equipment (especially systems I can't afford). The service provided can, as has been mentioned above, provide value. Living in NYC, I especially appreciate overhead (oh house I could buy with my rent payments ).
I just don't like manufacturers telling me what that value is. That's between the dealer and me.