Paradigm price fixing (1 Viewer)

[DerekF]

no one is asking you to support a "charity"...just members of your local community trying to make a living...they are providing a service and product locally, providing employment to your neighbors, paying taxes to support your local and national governments....

Easy on the “you” stuff here. I, personally, like to support local dealers. I support my local economy and give to a local charity! Every single component in my HT was purchased from a local dealer much like yours! IMO, it is NOT better to buy online to save a few bucks!

But I am concerned that these dealers may not remain competitive if they don’t do something—anything--to adapt! Why?

Because, whether we like it or not, there is a consumer trend toward online purchasing. Online spending is increasing dramatically year after year, so apparently, not all consumers share our value in community spending.

I don’t think a “Have you visited your local dealer lately” campaign will turn the tide. I just don’t. I also think some sales-people may inadvertently turn away legitimate buyers, labeling them “time-wasters” because they mention a review they read online.

We're all concerned. So, what do we do? Sit and wait?

Sharpen something?

 

[RussKon]

derek,

"bullshit"

simple fact: customers who don't buy locally will be the first to bitch when the local dealer closes.

it is up to all of us to support the local dealers - or they will go away...or as you put it.."die"

several other business owners and myself (i just work at a local dealer) take strong exception to your remarks because you have little or no background in running a local retail business....sorta of like the sales trainer who has no background in sales....for all of your theoretical suggestions, there is no real world experience in the retail audio business....it is very similar to the education field..(i'm a former teacher)...everyone feels that they are an expert in the field of education because they attended school......just because you listen to audio, shop in audio stores, and spend money there DOES NOT make you an expert....

more like a casual observer with ideas that are old hat to a real business owner....you don't think that at least once a week the owner of a business isn't trying to come up with ways that will expand his/her business?....it's their living...that's what they do!

 

[DerekF]

it is up to all of us to support the local dealers - or they will go away...or as you put it.."die"

When I first heard this sort of argument I assumed (and you can see why) that small local dealers were in trouble...but now I'm getting two conflicting messages:

a) Help support our local businesses, or they will cease to exist.

b) Local dealers are successful entrepreneurs, using successful business practices from the past *and* present, and sales are up.

I've admitted to not being the expert already, so please tell me: Which is it? Which statement is the most applicable (not everything's black and white, so "most applicable") to the state of local, smaller audio dealers?

Honestly. Pick one.

 

[RussKon]

derek,

Because, whether we like it or not, there is a consumer trend toward online purchasing. Online spending is increasing dramatically year after year, so apparently, not all consumers share our value in community spending.

I think having more than one local dealer of audio/video equipment in an area is healthy for everyone. Would my company make more money with no competition? Maybe, but I don't want to earn more business that way. And some of my competition have not expanded sales like my company. Yes, there might be fewer choices for consumers in the future in my area....not really good for anyone.


As in every real world situation there is a spectrum of "grays". The local guy who would have failed regardless of the internet or not... to the successful company in business over 40 years that will survive because of its huge customer base.....I would rather have more choices for everyone than fewer.
Every chance I get I will continue to expound the virtues of the local dealer and the services that are available only locally. Part of "adapting" to the changing world.

 

[Jeff D.]

Derek;

At this point conversing with you is a bore. On the one hand you say you support your local businesses yet your attitude suggests otherwise.

Basically, you haven't a clue. If you think I should start delivering subwoofers to your door because you don't have the time to come to my store, you can dream on. I have people IN my store who need my help WAY more than you do. I don't even want someone with your attitude in my store, because you will end up costing me way too much time.

Whether it is hypothetical or not, the fact that you even suggested it says a lot about your mindset.

Of course, you could make some sacrifices to give yourself some time that you claim you do not have. But heaven forbid the consumer needs to give a little. That would be asking too much.

I sincerely hope this mentality comes back and bites these people in the ass...and I'm sure it will. When it does, I hope it bites them hard and I hope they suffer. They deserve it. And I will laugh at them too.

In the meantime, I have people who are actually INTELLIGENT who would like to speak to me, so I bid this thread adieu.

/Jeff

PS
The only thread of hope comes from the very few (RussKon, Bill Lucas, Jeff Erys) who actually comprehend and understand even the simplest things. You see, it is a very simple equation at the end of the day, and the yet the single-minded, arrogant people have decided that they are the only part of the equation that matters. It is to those people that in reality, the world couldn't care less about.

 

[Nick Cerretti]

Wow.

I hate to sound rude on a day like this, but there's a few people posting in this thread that just need to chill. It's Thanksgiving. Get off the computer.

 

[DerekF]

Wow. I hate to sound rude on a day like this, but there's a few people posting in this thread that just need to chill. It's Thanksgiving. Get off the computer.

Nick, that's the best input to this thread yet--and it's not even thanksgiving here in Canada!

I'm going to take Nick's advice, and say thanks to all those who have participated in this thread. It was interesting!

Sincerely,

Derek

 

[Jeff Kohn]

I think having more than one local dealer of audio/video equipment in an area is healthy for everyone.

But you know as well as I do that for many brands that is not the case, there's only one dealer (if that), and I don't think it's exactly a coincidence that all too often the lousy retailers that people complain about here are the same ones who are the exclusive dealer for one or more sought-after brands. You may say you want competition and that it's healthy, but the current retailer model used by many mid- and high-end brands is a racket, with distributors keeping prices artificially high by making sure that there isn't enough competition.

 

[Jeff Kohn]

simple fact: customers who don't buy locally will be the first to bitch when the local dealer closes.

I disagree. Personally, the only time I will buy something locally is if that is the only way it can be bought. More and more direct-to-consumer companies are offering better service than what you can get from the local dealer who supposedly offers such a great service to the consumer.

The fact is my speakers, subwoofer, and 7-channel amp were purchased online, but with a 30-day money back guarantee, no questions asked. And the warranty service from these companies is reputedly excellent. On the other hand, the local dealer that I bought my pre/pro from has a 7-day return policy, and based on past experience I know that actually getting a full refund from them if it came to that would be about as fun as getting a root canal.

I really get so tired of the "it's in everybody's interest to make sure that the local retailers survive, you'll be sorry if they have to close shop". In reality, it's in the dealers' best interest to offer me some compelling reason to give them my business, and if they're not doing that they deserve to go under. You can tell me all about the shops that go that extra mile with loaners, in-home trials, upgrades/trade-in's, etc. But you know what, I've never actually found one of these mythical dealers. To put it bluntly, then ones I've dealt with pretty much suck, and I see no reason I should throw money their way out of some sense of moral obligation.

 

[RussKon]

Jeff,

So how did you audition your new speaker system??? Did you actually order without hearing it first?

"reputedly" a good reputation!!!....lol....more internet companies have come and gone in the past year compared to the same industry offline!....

"no sense of moral obligation"....i hope you enjoy it when the company that you work for goes bankrupt because of online competition, or foreign competition of any sort.

we were talking about a sense of community. the people that live in your area.

see what kind of reaction your neighbors have when you lose your job!..."oh yeah, he's the A**HOLE who didn't support our local economy....one of the reasons that I lost my job. well, he can go to hell!"

I'm sure glad that you are not part of my community!!!!!

only one dealer of certain brands in your area???...well at least you can hear that brand and compare it to other brands. I know of at least 4 different forum threads where consumers were bitching about the fact that there was no local dealer close for them to hear a particular speaker, etc.

At least you still have some local dealers to listen and experience products in person!!!!!!

Will I ever buy an audio product without listening to it first?...I hope not!

 

[Bill_D]

After rereading this thread, I am reminded of an unbelievable situation that exists in the US:
There are several cases pending in the state of Florida against farm owners who are accused of modern day slavery. This is not a racial issue because the apparent victims have representatives for every ethnicity. These people work abnormal hours everyday without the help of modern-day farming equipment at very low wages. They are forced to buy their housing, food, clothing etc. from the Farmer. The prices that they pay for these goods and services are higher by a factor of 2-3 when compared to anywhere else in the US with minimal competition. They end up in major debt to the Farmer that will never be overcome .... i.e., they work for free, forever.

Those who complain or try to escape are bemoaned, mentally exhausted and if necessary threatened with violence.

Do an independent search for specifics as the articles are quite political and should not be linked here.
Paradigm has created captured markets to distribute it's product. Now don't go off the deep end. I am not accusing Paradigm or any other AV manufacturer of anything illegal. The example above is clearly for shock value and a simple, uncluttered example in what a captured market will yield. Paradigm are obviously pretty savvy people with a killer product.
Products that are sold in a CAPTURED market are ALWAYS more expensive and it doesn't matter how much or how little service you wrap it with. Supply and demand is a non-factor in a captured market other than to drive artificially elevated (aka manufactured) prices higher. If you can sell brand X at MSRP+, then more power to you but don't bemoan, mentally exhaust or threaten educated individuals for being bad community members because increased competition has you to have to work a little harder to keep your market captured. There are two ways to get a captured market: 1) Contrived & 2) Earned. Which one of these retailers is the better community member? Where does this local community stuff stop? I guess anyone in the Atlanta area that doesn't drink Budweiser or drive a Taurus or Aerostar are baaaaaaad people? (All three of these plants are in Metro Atlanta) I would also assume that the donation of my money and time to charitable causes in my area to help homeless and less fortunate families won't overshadow my reluctance to deal with people who have an attitude because they think that their product cannot be had from anywhere else. Sweet goes much further than sour.
Unlike the people working at the farms above, I can and will vote with my dollar which carries a lot more weight than anything spouted on this thread from either side of the issue.
I did some checking. In Atlanta, Paradigm can be had very easily at 5-15 off list with a phone call. If I were in the market, I would vote locally for Paradigm.
....now back to my turkey omelet.

 

[Jeff Kohn]

I'm sure glad that you are not part of my community!!!!!

So am I, because it sounds like your ideal community would be some socialist utopia. They've tried that in Europe among other places, and it doesn't work.

 

[Jeff D.]

(Not getting involved again, just a comment to RussKon)
RussKon:
A valiant effort, but clearly another one as blinded as the others. The typical defenses are there:

we were talking about a sense of community. the people that live in your area.

will not work because these people do not know what a community is, beyond the internet community. I fear most of them don't even speak to their neighbours or even know what they look like. Why would one care? The whole world can be had on that 17" CRT sitting on your desk. Why on EARTH would you go out into the real world?? Are you crazy? If for no other reason - its EXPENSIVE out there!!!
I applaud you for continuing the battle, but I fear it is hopeless. But here's three cheers to us, RussKon.
/Jeff

 

[RussKon]

So am I, because it sounds like your ideal community would be some socialist utopia. They've tried that in Europe among other places, and it doesn't work.

My ideal community is a group of people who respect each other, support each other, and realize that we all need each other to survive as a community.

Whether you realize it or not, your local businesses pay more in property taxes than you do. Have you ever lived in a "bedroom community"....a small town near a larger metro area? I have...it consists of residential property only. It had some of the highest property taxes on homes in the state because there were no businesses to pay property tax.
Yet this community wanted good schools, adequate police and fire protection, as well as maintained roads and parks...

I am all for competition and the free enterprise system. I have a choice to buy locally or online from a company that is located who knows where. I choose to buy locally and support a local business that helps support my community. The sales tax that I pay also helps support my local government and schools.

I have no problem with a company selling online or restricting their products to certain dealers. That is part of the system of free enterprise.

The "lazy-incompetent" dealer is already gone. That type of business will not last a year in today's market. Either as a local dealer or online. I'm talking about supporting those local businesses that have been there for more than a few years and will be for years to come.

What is the price for our way of life and all of the benefits that we receive for our communities? I don't mind paying a few dollars more to support my local way of life. Every choice in life has consequences for all of those around us. Personally, I Care about those people around me. If you took two minutes to think about it you would realize that.

Obviously, you are only concerned with the lowest possible price!

You will respond and attack this latest post of mine, but when it all boils down to is the price! Would you order online if the price was the same as the local dealer? Fat chance!!!

price..price....price...The mantra of the internet shoppers!!!! Despite all of your comments about "internet service", it's the price. And you can argue till your blue in the face, but any intelligent person can see what you really care about!!!!

 

[Jeff Kohn]

Quote:

And I'm saying, there has to be more of a reason than "they've been there for years" for them to get my business. If they're just going to rely on the fact that they've got a captive market, and not even bother to hire competent sales people or offer any of the other perks supposedly offered by local dealers, then I say screw them.
Look, if you want to argue that the e-tailers selling unauthorized goods for 45% off MSRP only to tell the customer "go to hell" when they need support or warranty service are bad/evil/whatever, then fine, I'll agree with you. But the fact is, companies like Outlaw, SVS, Axiom, VMPS, etc are offering compelling products and service at good prices, and I applaud their innovation. If you think I should pay more to get less from a local dealer when companies such as these better suit my needs, then I guess we'll just have to agree to disagree.

 

[DustinF]

For those that stick to MSRP-
You better realize that you can replace any piece of equipment, but you can't replace your customers. It doesn't matter if they are rude and obnoxious and quoting Internet prices. If you don't have the ability to deal with this type of person, then you shouldn't be in sales. Telling them to take a walk is the most ignorant thing I've ever heard. The types of businesses that do this will not stay alive. The idea that somebody will come in and eventually pay full MSRP sounds great, but you don't know when that person will come in. Sell to the person that is in front of you, replace what was sold so you can sell it to the person that will pay full MSRP. That's two sales instead of one.

Case example-
I was shopping for a pair of bookshelf speakers. I had already done some research and pretty much knew what I wanted to get. I did check on-line to see what type of price I could get.
First place I stop in demos the speakers I'm looking at. I decide I want them and ask what kind of price we can work out. "We aren't allowed to negotiate on this brand of speaker." The attitude of the salesman was of arrogance when he said this. I've been in sales my whole life and couldn't believe how snooty audio salesman could be. It completely turned me off and I wouldn't buy from someone like that even if it was true that he couldn't negotiate. I found this to be true in two more shops.

The last place I walked into had the speakers I was looking for. The salesman gave me a demo. I told him that I had been shopping and was trying to find a place that was comparable to the price I found on the Internet. He looked at the prices and said he would be right back. He came back and admitted that although he could match the price that I had, it wouldn't make sense for him to do it. He sat down and showed me what it cost him to get the speakers. He explained he needs a certain amount of profit to pay for flooring costs, utilities, advertising, etc. (I already knew this of course.) He gave me a price that was $100 more than the Internet price and I bought the speakers. Why, when I could of saved $100 on-line? Although I'm sure I came across as another cheapskate, Internet buyer, he still took the time to try for a sale without acting like a complete pompous.

Many of you so-called audio salesman could learn from this.

 

[Bill Lucas]

Dustin,
It isn't your place to tell me what price I need to sell a product at to keep my business going. As I stated before, the people that price shop on the Internet for audio equipment are the vast MINORITY. Why should I change my business model to suit the minority of shoppers? Oh, wait, it's like politics! Let's write all of our laws to protect the .000001% that can't properly punch a ballot card. Of course my business model should follow this path. How silly of me.
Seriously, my model is different because I am in custom install. My clients want much more service than the average black box customer. Because of the nature of business today I don't do retail sales. If you called me and asked to buy one piece I would refer you to a retailer.
I have no problem with the fact that you want to get the most for your money but that does not mean that a local retailer is bad, arrogant, etc. for charging list price. It is simply a business decision that was made. Once a company determines a pricing strategy it must stick to that strategy.
You cannot stay in business and be everything to everyone. If you're a low priced Internet company then that's your model. If you are a local company that has parity pricing (MSRP) with all the associated overhead that's another model. If you're a custom installation company that offers premium pricing for superior service and support then that's the third model. I understand that I'll never sell as many black boxes as someone that follows one of the first two strategies. But guess what? I don't want the business that they are doing. I must concentrate on clients that are extremely demanding and that have budgets that most here can only dream of. Therefore, I can't be bothered with the guy that wants to demo 50 subs in his home with 30 day free auditions and bargain basement pricing. But I will (and did) go to a clients house on Thanksgiving Day, no questions asked, to fix a projector that HE screwed up that morning to make sure that his football party at the end of the day went off without problems. Can the Internet do that? Not now or ever! Regards.

 

[DustinF]

Bill-
I hope you realize my statement was not targeted at you.
Your business is definately for a different target audience and I appreciate that. It is not unlike people that buy server software. The price of the software itself is not really a concern, but the cost of setting up the entire network and getting it to run is the concern. (This is where service is important and becomes a major factor.) But the cost of server software does become important to an individual that is on a budget and trying to do it himself/herself.

My entire point was that attitude plays a more important roll in sales than price. And audio sales people need to realize that they need to create a perceived good deal instead of creating animosity.

I never said that it was my place to tell you what price to sell a product to keep your business going. In fact in my last example I showed that the salesman told me what price he needed to sell at to keep his business going. I accepted that and he had a sale. Unlike the other 3 salesman that wouldn't have anything to do with me because I asked for a lower price. Not only did they not even try, but because of their attitude I will not recommend any of them. How much money do you think not selling at MSRP cost them? BTW the cost of the speakers I got was only $50 off MSRP.

BTW if it upsets you when a customer says what price they want to pay for a product then you should be equally upset at a manufacturer telling you what you can sell a product for. Which was the original topic of discussion.

Do you really think that a majority of people that buy don't look for deals? I can't name one consumer product that people don't try to save money on. And when a company such as Paradigm tells its retailers they have to sell at a certain price, they will drive people to the competition.

If product A is originally $500 but is on sale for $300 that is a perceived good deal. If product B is $250 but the price is fixed then 99% of the time product A will win the sale. Not because product B isn't priced competitively, or isn't a good product, but because product A is perceived to be worth more because of the original price.

 

[Bill Lucas]

Dustin,
I agree with you 100% that attitude plays an important role. An a-hole is an a-hole, period.
The original question of this topic was answered correctly many times. NO manufacturer dictates price. They can give us an MSRP or MAP price but ultimately it is our decision. They can however, set geographic limits and restrict us from selling to customers that have not physically visited our location. These are retail guidelines that many manufacturers set. I have no problem with these guidelines. Those that believe in a "world market" do. Regards.