Retail Buying - Reality Check


Like all of you at some point in time, I caught the Audio and HT bug. I started out at the usual places - Hi Fi Buys, Best Buys, etc. and moved on to the niche, locally owned hi end audio and HT boutiques. There I met generally more knowledgeable salesmen (no women yet). I also started doing my homework out on the web and came upon great sites like Audiogon and AVS Forum to name a few.

Your knowledge and experience has been invaluable to me. Unfettered by the product lines you have to sell, you provide a far more level playing field of unbiased opinion.

Here's my dilemma: I am a small business owner myself, and I value local market presence and customer relations. I'm even willing to pay a small premium for this intangible. However, when the quotes came back from 3 different retailers in Atlanta ($65 -80k), they were all for MSRP plus tax plus design install and misc. such as clips and straps ($250-$500 worth!)

Now most of the hi end equipment today has "burn in" periods of several to hundreds of hours before peak operating performance is obtained. So, buying new at full MSRP also meant getting inferior performance for the necessary burn times. So no big benefit (except some warranties) to buy new.

By purchasing from sellers on sites like Audiogon, and purchasing nearly new or sometimes new products, I have saved $16,000 plus $1,000 in sales taxes on approximately $50,000 of my quoted MSRP prices. I'm not done yet. I also have the flexibility of buying the exact product line I want, not just what my store has to offer. There is great pressure in the retail setting to go "one stop shopping" at your store of choice.

I understand these stores need to make a profit. However, 50% markups on items that they don't keep in stock and have to special order, seems out of line to me.

Caveat emptor is certainly a key consideration in on-line purchasing, but to date, through careful checking of prior seller transactions, prudent payment techniques and telephone conversations with the seller to allow me to make some kind of character call, I have had nothing but outstanding, as promised transactions.

I hired a HT acoustical designer and a certified installer and I couldn't be happier, except for one thing. I still feel a little guilty about not buying from the guy with the storefront who spent time with me. I just wish they'd recognize where they do and don't add value and charge accordingly.

Anyway thanks guys, for the great education and advice you've provided me.

What say you?
rogocop
I've been on both sides of the counter as salesman and consumer and here is my take:

Some store owners are total jerks - I lost several sales when working at a high-end downtown DC boutique because my cheapskate boss thought that giving a $50 discount on a $1,000 piece of gear (a lousy 5%) was too much. I'm sure that money walked right out the door and was spent somewhere else that afternoon.

Some shoppers are total jerks, too. They pick your brains, use up your time, and then buy used or shop your price all over town. That's life, a good salesman learns how to sniff out these worms early and broom 'em.

When I sold a full-boat system to a customer, I threw in the delivery and basic setup. They usually gave me a tip and everyone was happy. It also gave me a chance to scope out their house and see if they had any other entertainment needs that were unmet.

In addition, my retail-paying customers got free loaners if their equipment needed to be serviced and were allowed to take home equipment for demo, bargainers were out of luck. Plus, we'd even take in stuff on consignment to allow them to trade up. These should be the incentives for paying full-boat.

I think that if more store owners were willing to codify this stuff and show the customer how dealing with them has its advantages, they could close more sales of all types. Let the customer decide how much care they can afford and price the equipment on a sliding scale accordingly....
Personally, I feel no obligation to subsidize local high-end dealers out of either some bizarre form of guilt or because, for some reverse-trickle-down, voo-doo-esque theory that I don't buy, I believe I am subsidizing the entire high-end industry. None whatsoever. The fact that there's a viable and vibrant market for used equipment means only that the market for equipment at all levels is and will remain viable and vibrant -- so (even if the middle-man is incapable of competing or surviving in an increasingly global market defined by consumers with unprecedented power to perpetuate the useful life and value of products through communicating with large groups of other consumers to trade and resell items) I can guarantee that manufacturers will find a way to continue getting their products to people who want them, as long as they continue to want them, even if they have to come up with new means to do so. I’ve bought a lot of equipment new from dealers, but now I almost exclusively buy used through Audiogon and other online sources. It’s a market economy, folks, best product for the best price takes the prize.

It’s just that simple. I could easily adopt a more apologist stance and reason that: (a) I would never, under any circumstances, purchase a Meridian CD player at anything less than used prices, (b) I considered Meridian only because there was a used market, (c) I got one, and (d) because I and people like me purchase used Meridian gear, the market is better able to support retail pricing due to the fact that the resale value is an inseparable component of the product -- so a viable used equipment market, in no small part, supports the hyper-inflated retail market. Also, cites like this one do at least as much to create desire and fuel the retail market as they detract from the retail market simply by increasing the knowledge and power of the consumer (which is what they do). But all of these arguments, any many more like them, though true on many levels, miss the essential truth -- best product for the best price wins. People’s conceptions of what is best may change from moment to moment, but if my personal conception of “best” happens to leave the local dealer out in the cold on any given day, so be it. I don’t see the need to rationalize or apologize for it.

When I walk into a shop just to check out how something sounds and with no serious intent to buy anything, that’s what I tell people. Simple, straighforward, no BS. Their decision as to how they want to spend their time with that info is their own. That said, I've walked into a store with that intention and walked out with new gear -- "best value" is fluid. No apologies.
As someone who's been around hi-end retail sales for a good portion of my life, and who knows exactly what it takes to build very good to WORLD CLASS AUDIO/VIDEO SYSTEMS and environments, I can easily say that the way "Rogocop" has conducted his buying desissions has landed him AN INFERIOR AUDIO/VISUAL EXPERIENCE!!!!...as it does 99.999+ percent of the internet buying public! I don't care if someone reads every article and review ever printed, and takes every audio salesmans advice and "sucks his brain" for knowledge! It still won't help you end up with a quality experience!... NEVER HAS, NEVER WILL! How can I say that, you may ask? Even without knowing what he ended up with, who he delt with, and what he paid for his gear? ...SIMPLE!!!!... because, HE'S MISSING OUT HAVING SOMEONE WHO KNOWS WHAT HE'S DOING (LIKELY LIGHT YEARS BEYOND WHAT THE AUDIO NEWBIE CAN DO ON HIS OWN) PUT THE SYSTEM TOGETHER FOR HIM!!!
One of the major things I've learned from selling audio gear to people over the years is that YOU CANNOT REPLACE EXTENSIVE TIED AND TRUE KNOWLEDGE, EXPERIENCE, SKILL, DEDICATION, DESIRE, AND SERVICE!!! Yes, indeed buying things over the net takes the "people" out of sales! The end result is that any potential "team effort" goes away!
I've personally assembled over 1000 systems in my 20 years around this business. And I know without a shadow of a doubt, that the buying public is not getting what they think they are bargaining for!!
So, I ask you everyone here..."do you think it's a better deal by saving money shopping for gear on line?" "Is Rogocop getting a better deal by saving a bunch of money with on-line purchases?" If you ask me, I don't think so. Infact, I'm EXTREMELY CONFIDENT that, iF I was a retail salesman that Rogocop had purchased the same equipment from, and he paid me more than double what full retail price was, and he let me install the entire system, design the system out, place the gear, and basically make it all come together for him(with compromises even), that he would end up with EASILY 200% BETTER RESULTS AND EXPERIENCE!!...giving him a better quality of life experience day in and day out with his gear!!! ..In escense, a quality of life improvment far beyond what he could get "without the relationship"!!!!
So, for me, since service is where it's at, I wouldn't sweat the "net" any if I did retail!!! Because people REALLY AREN'T GETTING BETTER VALUE BECAUSE THERE'S MORE MONEY IN THE POCKET INNITIALLY! Infact, if these buyers, like "Rogocop" ever catch wind of what's the potential of an AV system to be had in a room, I think he might end up respending all over again!!!..and again...and again, if he wants a world class AV system some day, and insists on doing it the way he's chosen. My two cents....
If only it *were* two cents, foreverhifi2000... (or should we call you foreverhifi$200,000 ? ;^)
Well, a lot of similar themes spiced with a few dissonant contrarians. I thank you for all of them.

Without trying to defend myself to foreverhifi2000, let me say this about that.

The system I am ending up with is essentially the system spec'd. out by the retailers with a few major improvements. Because I have money in my pocket, and not in the retailers, from my web buys, I was able to to run my B&W Nautilus 801s (that I bought for $8k instead of $11)with a Mac 602 and the B&W center with a Mac 352 (mono) and my 4 surrounds with 2 Mac 352s instead of the MC206 which they spec'd. I was able to buy a Marantz VP 12S2 for $9k instead of the $13k I was quoted. The theater, acoustics and some equipment selections are being designed by Dennis Erskine of Design Cinema Privee. His skill and knowledge leaves anyone I talked to in a store in the dust. He's not Carl the installer who graduated from Bubba's Window Tinting and Car Stereo Shop to HT installs.

So, I'm not buying that I missed something in this experience or that as a penny pinching, short sighted newbie I failed to see the forest through the trees. I think I've maxxed out my dollar value pretty well. Without these savings I would not have been able to afford people like Dennis or the Mac 602 and and it's little cousin 352s.

Personally, I'm not a haggler for every nickel kind of guy. Sure I could have told these guys that I wasn't going to pay full retail, but I was already in the hole because of where the negotiations were starting from (MSRP). They'd would have made me feel like I was taking bread out of their kids' mouths for a few % discount, when with very little haggling, Audiogon sellers are selling at or near retailer's costs. I guess they saw a sucker coming through the door.

Someone asked if people know my margins... My answer - The ones who do their homework do. I respect them for it. And, in my market place I kill my competition because I give more value for the dollar than they do. Open up the Atlanta Journal Constitution Real Estate section on any Sunday and see my add "Dare to Compare at Carlyle Square". So honestly, I walk the talk.

This has been a blast! Thanks for the input.