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
Rogocop, your admission that you are new to this hobby, had I known, would have caused me to somewhat temper my criticism (and I never said the dealers were blameless in your case). But neither that fact nor your further attempts at excusing yourself fundamentally change anything though - I stand by what I said, but find your actions maybe a little more understandable as a neophyte. You did what you did, and my guess is you've learned from it already. You might not be back to the dealers regardless, which is fine, but if you do return someday to the one you said you liked, why not give him a fair shot at earning you patronage, instead of just using him and splitting? Just so you know, my own system has been assembled as a mix of new, demo, and used gear, roughly in equal proportions. I do not spend any time in dealers' shops unless I am there to buy something (in other words, as rarely as I can manage), and have never auditioned anything in a store that I later purchased used on the net or anywhere else. I have gone to audiophiles' homes to audition stuff they were selling that I didn't ultimately buy because I didn't prefer it, and will occasionally indulge in listening to something or other at a dealers' if I am in there to purchase something else anyway, but that's about it. If there ever comes a time where I have used a dealer's resources to aid in choosing a piece of gear that I might buy used, I would certainly give the dealer every opportunity to compete for my business, but I really plan on basically avoiding this conflict of interests to begin with. I'm not "out of touch" or an "MSRP salesman", whatever that means (did you skip over all my posts refering to price negotiation, something which is part and parcel of my job?), and neither do I see myself as some kind of saint, I simply have a strong aversion to wasting either a store's time (and being in sales undoubtedly has a lot to do with that fact), or as Twl says, my own.

One of the main advantages of Audiogon for me has been the ability to buy gear used, bring into my system for a long-term evaluation, and then sell it again at basically no loss if I don't want to keep it. This has many advantages when it comes to really getting to know about a piece of gear, but it's a hit-and-miss way to go about building a system, and is definitely not for everyone, especially newbies who desire to assemble everything at once. It's a process that can take years and be in effect ongoing, but is an activity which can be enjoyed in its own right for someone who just likes playing around with gear from time to time. On the other hand, if I had any interest in purchasing a complete HT system and installation, I think I'd just find a dealer I liked and let them handle everything, and I say that as someone who sold new HT systems back in its simpler days. (Oh, and BTW, I've never bought a new car period [total waste of money], and don't go 'test driving' at dealerships for fun or otherwise, though I've assisted others in the process.) 'Psychoanalyzing' a customer, be it you, me, or anyone, really isn't hard when you've dealt with thousands over the years - the same (few in number) basic motivations and behaviors apply universally, and are known to any competent salesperson, so neither my 'insights' nor your reactions are reason to be 'awed' (even sarcastically), and there's no need for either of us to take them personally (which I commend you for seeming not to have done). Anyway, you said you felt guilty right at the top, and have de facto bragged on how much you saved - it doesn't exactly take a rocket scientist to catch your drift in making this thread, and you know it too. It's not a crime, and you haven't done me wrong, you only (as you say) sought my perspective, and you got it. After you've been at this for a while, it just might become your perspective too. And welcome to the Audiogon forum!
Zaikesman, I like you better already. I like being in the kitchen and can generally stand the heat.

I'm not sure how you can know that avoiding the HT package store route is the way to go until you've done it one time and have learned about the gross disparities in pricing and seeming lack of value relative to markups. I've done it once and won't do it again. However, I must say that I'm far happier having learned this lesson without having it cost me $30k more than it needed to.

I think the normal purchasing pattern for most people still starts out at the retail store level and then, as interest and seriousness increase, advances for some to the internet. I don't think most people start out on the web and move to the stores. Maybe I'm wrong.

Anywho, thanks for getting back to me and I hope to get to know you better here on A'gon.
Peace pipe accepted. I generally try to be as much of a Dr. Jeckyl as I can around here, but can go into Mr. Hyde mode when it comes to poor sales practices, for self-evident reasons, so I guess I'm also likely to be set off if I think one of the few decent salesman in this hobby got stiffed. I probably shouldn't though - as I've stated on this forum before, rule #1 is The Customer Is Always Right, and rule #2 is If The Customer Is Wrong, See Rule Number One. It's ultimately the salesman's sole responsibility to reel in guys like you, no excuses.
Just to touch upon certain issues raised by Judith & others -- a bit late in the day (as usual). I'll give a small European perspective (basically Paris, & London, with some experience of Brussels & Athens).
Until recently, we had important price cross-country price differentials and "exclusive dealerships". Certain products were unattainable for many of us at the "local" prices; they could have been attainable at the going prices in another country... The local market was, in a way, protected by difficulties in cross-border trading, currencies, etc etc.

The EU changed that and the Internet simply accelerated the change. Prices are now mainly comparable, and the need to provide added value for price differentials is obvious...

**Buying used/cheaper; this is NOT the issue, we always had the opportunity to do that and we did that: newsletters, dealers, etc catered to that. The difference NOW is that the Internet not ONLY widens the buyers' choices but also makes them FAR REACHING -- going well beyond the geographical confines of local stores/national retail network. Once, we couldn't buy an 200watt XYZ used unless our local dealers had it; now we can, from wherever thru the Net... used OR new!

**Dealers: the Internet simply changes their role from convenience (geographical, familiarity or otherwise) to providers of a fuller service. The Net urges the need to to provide OBVIOUS, perceived, added-value for the price differential... if people are to pay for it. OTOH, many dealers are Internet savvy and use its facilities to reach more customers (a great way to sell your trade-in items, for example). So, it looks more like a solution than a problem; after all, getting & keeping a customer has always been a primary aspect of boutique retailing -- it's all the more so now!

**Manufacturers: good point. They needed a distribution network to provide direct contact with potential buyers & service for their products. It used to be said that manufacturers do NOT get the best deal because the cost of distributing (i.e. the importer/dealers network) required a mark-up of ~100% (=margin 50%), whereas the actual creator of the object got less per unit... I suspect, but do not actually know, that such was (is) the case -- at least for the smaller manufacturers. The direct manufacturing cost-to-retail price ratio used to be 1:7-12, not including the intagibles (r&d, designing, testing facilities, etc, etc). How much of that ended in the actual manufacturers' pockets I don't know -- not much per unit, I expect, if you deduct the cost of the sales network & add all the intagibles... so it was (is) a volume game with manufacturers. Hence certain manufacturers have turned to the Internet to do business...

Having said all this, I have bought most of my stuff through retailers probably because I got service, reasonable prices, equip loans, and help with payment. One exception: a pair a german active stats I once had cost $~16k where I was living & $~9k retail in Germany (Germany being ~500miles away). I drove to Germany & purchased them, with the benediction of the local dealer (who arranged to service them anyway)! So, of course, I purchased the new pre from that dealer, didn't I...
How cool is it to receive real time global perspectives!!!

The still untapped potential of the internet is one of the great possibilities of the 21st century.

Thanks Gregm for adding your two Euros to the conversation.