Restocking Fees, 30-Day Free Trials

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Another option for dealers is to specify one or two units that they use specifically for trials only. Charge a 10% fee if the guy does not buy a new unit. If the unit goes out on trial ten times in a year...he's just sold a new unit and he still has his trial unit. Even with a trial unit, he should be able to sell it for 50% off list after he's collected several trial fees off of the unit....and still make a profit.

The bottom line here is, buyers do want to hear the unit before they buy it. Sellers have to figure out a way to get the unit into the hands of serious buyers.

Right now there is a large contingent of audiophiles that wait a couple of years until the flagship drops to 60% or 70% off of the new asking price...if they like the unit, they keep it. If they don't like it they can easily put it back on the market with little or no loss.

There has to be a middle ground that's equitable where the buyer and seller are protected.

Paying $25k for a new amp to find out that it's not your cuppa tea scares the hell out of me.

Another option for dealers is to specify one or two units that they use specifically for trials only. Charge a 10% fee if the guy does not buy a new unit. If the unit goes out on trial ten times in a year...he's just sold a new unit and he still has his trial unit. Even with a trial unit, he should be able to sell it for 50% off list after he's collected several trial fees off of the unit....and still make a profit.

I'm not sure the math adds up. For a dealer to make a living he'd need to move a certain amount of product. So he would either need more than 1 or 2 demo units, or he would need a larger percentage of sales to be sight unseen.
And if a unit made 20 trips vis UPS or whatever carrier (10 there, 10 back), I suspect there's a good chance it will be pretty beat up.
But I do agree buyers will want to hear the unit first, no doubt.

Do you think there should be a cap on restocking fees? Say for up to $25k in equipment, the maximum restocking fee is $1,000? Or, say a flat %5 fee across the board with the buyer paying shipping both ways?

No! No! No!

It seems it would be more profitable just to send equipment out on a trial basis and hope it comes back.

No! High risk of damage, misused and possible hassle getting it back. You said it, HOPE!

Like they say, when you drive the car off the lot, it depreciates 20% to 30%. Too bad audio gear don't have an odometer.

Most companies on the WWW don't stock anything but just take your order and the component is drop ship from the manufacturer. This is the major reason they can sell at a discount with virtually ZERO overhead.

What do you think is a fair way or fair fee to let audiophiles try out internet purchases?

If used, find a local seller where you can demo before purchase. If new and plan to shop for best price on WWW, attend audio shows. I think one major reason with increasing # of audio shows is to compensate for loss of BM.

Depending on price of the component, some companies will deduct the cost of travel to their facility from the purchasing price for a demo.

"Restocking fee" done on a % of sales price does not make sense to me. It cost the same to re-stock a similar sized amp for example whether it costs $500 or $50000.

The reasonable approach is to have the customer cover the actual or reasonable cost of shipping and handling for an in home eval. Also with an agreement that equipment must be returned in condition clearly identified by the seller up front. That way, expenses incurred are absorbed fairly if all is done as it should be. It's not much different from returning an item to a store, except now there are specific shipping and handing charges that must be addressed.

03-05-13: Mapman
"Restocking fee" done on a % of sales price does not make sense to me. It cost the same to re-stock a similar sized amp for example whether it costs $500 or $50000.

You are missing the point. The online dealer may be calling the charge a restocking fee, but, if the guy is honest and doesn't try to resale the equipment as new, he is using the fee to offset the cost to resale the unit as used, open box, demo, or what ever the dealer wants to call it.

Would you pay $25K for an amp that somebody had in their home before you? Or would you demand a new unopened factory fresh sealed unit?

A little background on pricing. The cost a dealer pays most of the time to the manufacture/Distributor for a Hi-end piece of equipment is 60% of the manufactures retail set price.

So using your $25K priced Amp the dealer will pay, up front before delivery from the manufacture, $15K + shipping....

I can hear you now.... 40% PROFIT!

Well first are you going to pay the dealer $25K for the amp? Maybe things have been slow and the dealer discounts the amp to you 10% off.

30% profit WOW!

Well that might be if the dealer is running the business out of his basement of his home and has a full time job doing something else. Even then I would bet the guy has a line of credit with a bank and will borrow the money from the bank + interest to buy the amp.

But I doubt that is the case. Would you buy a $25K amp from a guy that operates out of his basement?

If the dealer has a store front he has overhead costs.
Rent.
Utilities.
Phone, Yellow page buisness ad.
Internet hookup.
Advertising costs.
Insurance costs.
Any employees? Costs, costs, costs...
Showroom inventory?
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Deduct overhead costs from the 30%