Klipsch Makes Major Distribution Changes

[luchenbach]

It is funny to listen to the dealers talk about the unfair advantages of internet sales. When large stores like the Good Guys and Circuit City came into the market, they crushed all of the 'Mom and Pop' stores. Same thing with Home Depot, WalMart, Gart, and all of the other large stores that are selling their wares at reduced prices. The smaller stores claim that if they were to sell at that slim of a profit margin then they would go out of business. Well, it worked for the big chains. If the Ma and Pa stores sold their stuff at the bargain prices, maybe they would have been as popular as the chains, and they would now be big enough to compete. Let competition sort out the marketplace. If all of the equipment suppliers just let the free market work, and not interfere with distribution, then the B&M's would change their models to compete with the internet. Maybe the stores like Good Guys would change from the fancy showrooms and slick sales people to more of a warehouse environment like Sam's Club or Costco. You would go in, pick up your boxes of RF-7's and go purchase them for $1500, and if you didn't like them, you could bring them back. Why have the Costco's been so successful, because they provide value. Good products at great prices.

By squashing internet sales, you are taking yourself out of the fastest growing market in history. Look at the companies that are embracing internet sales, and see how well they are doing. The biggest glaring example of this is to simply look at the Klipsch forum under subwoofers. There is much more discussion of SVS subwoofers than klipsch's own line. You would think that it was a forum for SVS. These subwoofers are only available from the net, and nobody can audition them with the competition before purchasing them, yet they are immensely popular. When is the last time that you saw an ad for SVS in a home theater magazine? I never have, yet when I looked at subwoofers, it made it to my short list, along with the Velodyne HGS-18 and the Earthquake Supernova. None of these products have dealers within 100 miles of me.

It is all about value. Americans want the best products at the best prices. The current B&M's can provide the good products, but the price issue will hurt them unless they change to meet the consumers changing expectations. How many people are choosing to compare products at home or at work rather than have to visit a half dozen different stores with sales men that have an agenda to sell you as much product as possible in a short amount of time. There is no way to compare all of the different subs in one room, yet by spending an hour searching the internet I can find unbiased reviews from major magazines, and thousands of postings on forums such as this to find the best product. Internet sales are getting bigger and bigger every year, and as the younger generations become the target audience, do you think they will feel embraced by the manufacturers that are preventing them from getting the most value for their dollar? Do the OEM's really think that it is a good idea to segregate themselves from such a huge market?

I personally have purchased my new receiver from a B&M, because I knew the risk of purchasing off of the internet, and chose the safe route instead. If I purchased from the internet, then I could have purchased the next higher model in the line for the same cost, but due to the complexity of the product, I was conservative.

On my subwoofer purchase, I did the opposite. I knew that I could save $750 by an internet sale, and if I had any problems I could purchase a replacement driver or amp for much less than $750. I am now thinking of buying more products from that vendor because I am so happy.

Embrace technology and the advantages that it brings. If you live in the sales model of 1950, you will be trampled by those that are living in 2003.

Thanks for letting me get this off of my chest.

G-

[tony61]

A wise old man once told me, as his multi-million dollar corp. was going into bankruptcy due to a situation very much like this one, "I should have danced with the one what brung me 'cause at the end of the party she's the one who takes me home".

[luchenbach]

Remember, for a while, Mr. Ford also thought that the Model T was the perfect car, and they didn't ever need to make another model. In the roaring 20's other companies started making flashy new models in many different colors. When asked about this, Ford replied, "The customer can get any color he wants, as long as it is black". His lack of following the rapidly changing times almost caused the fall of the corporation. When the sales got too low to be viable, he shut the assembly line down in order to re-tool for a new, more flashy model. He was forced to change to keep up with the rapidly changing new consumer. If he didn't, the Ford Motor Corporation would not exist today.

For the first time in decades, the market place is changing rapidly and so are consumers expectations.

I would love to get three pairs of RB75's for my HT, and I have never even heard them. I trust that they will be good due to my longstanding ownership and auditioning of Klipsch products. I received an ad from the Good Guys! that had a pair of these speakers advertised for $1199. There is no way that I'm spending $3600 on this set. Judging their markup, based on clearances of current products and the grey market, I am guessing that if the new models hit the grey market, they will be priced around $800, which is $2400 for the three pairs. I will pay that in a heartbeat.

[tony61]

I'm not saying that products and manufacturing designs and techniques shouldn't change, quite the contrary.

It's just that a very important thing to remember is that to meet the demand that will be put on production something has to change. Unfortunately I fear that the sacrifice will be in the area of quality and dealer loyalty.

The dealer network in place now has brought Klipsch with them on a tremendous and turbulent journey and I feel that there are certain tools which are being taken away from those dealers. The loss of these will cause alot of them to drop the line.

When a large retailer like Bestbuy sees an opportunity to make profits grow they sieze it, and rightfully so. My concern is which manufacturer will offer the opportunity three years from now, after a number of dealers have decided to part ways with Klipsch.

Do you think Bestbuy will consider the economics as they pertain to Klipsch when another manufacturer offers a perceived better deal? I think not.

Careful the bridges that you burn, as you may have to cross them again, quickly in retreat

[RB5M]

yet by spending an hour searching the internet I can find unbiased reviews from major magazines, and thousands of postings on forums such as this to find the best product.

,,,,,,,,,,,,,end of quote............

I think that the "new buying model" has also produced a "new advertising model" which has been dubbed "e-marketing"...if you think that what you read from "posters" is all non-biased and un-compensated then you must also know that all 18 year old cheerleaders that people talk to in chat rooms are really girls ,18, pretty, and cheerleaders!

I also know how much "unbiased" reviews I can get from the mags that get tens of thousands of dollars in advertising from those very same companies....

Forum sites are SET-UP TO INTICE E-MARKETING AND ON-LINE ONLY SALES COMPANIES AND MANUFACTURING.....

Does this mean I think that they don't have a place in the market?..NO, just that THIS IS AUDIO and as such it is a very personal choice that one makes and AUDITIONING, PROPER A/B COMPARISONS, and A GOOD DEMO FROM A TRAINED ,EXPERIANCED INDIVIDUAL are essential to a proper choice...

As for Big Box retailers, "bring 'em on", I have no problem competing with anyone who offfers at least the possibility of an audition for those who feel that LISTENING to equipment is important...as for those who don't , you will be the TARGET of the internets BIGGEST INDUSTRY ...ADVERTISING!

[REFSELLER]

I think that there are good "on-line only companies" and bad "on-line only" companies, I just can't imagine buying audio without extensive ,comparative listening......

[Bruinsrme]

Luch,

Now you are talking. The perceived market value of a product is ones opinion how much the consumer will be willing to pay.

The consumer view MSRP as the inflated market price that the retailer charges based on the supplies opinion.

Let's look at walmart where I can buy a can of spaghetti O's with meatballs for $1.07 regular (.96 on sale), or I can go sto stop n shop (nickname shop and rob) and pay $1.37.

Where do you think I buy, Walmart.

Many people say they would never buy a speaker on line with out hearing it. Then those are normally the same people that say t hat speakers will sound different in you house than the store. So I go to the store and listen to say Cambridge sound Newton series and they sound freaking good inthe store. When I get them home I discover they sound like crap in my house. So What is the difference if I buy a speaker that I never hear or I buy a speaker that sounds good in a completely different room?

So to me the argument of auditioning speakers is a crock because the chances of them sounding the same in my house are nill.

scott

[REFSELLER]

I would say that this could also be said of differant rooms in one's house or even differant placement within the SAME room....I would say ,though, that it is the comparison between several speakers in the same environment with the same source GEAR and demo MATERIAL that is INVALUABLE.....Now, if one has the means, time ,assistance, money, and knowledge of proper set-up that would be neccesary to accomplish this kind of blind a/b/c comparison in one's own home then , without a doubt, this would be the ideal and I have done this very often in my own home .......

[Bruinsrme]

Word of mouth is the most powerful advertising there is. Look at SVS and Rockets awesome price point and few returns delivered to your door. Many many satisified customers.

Klipsch my 7.1 klipsch setup msrp is $4700 plus tax

Rocket 7.1 less than 2800 delivered

If it wasn't for the fact Tweeter was dumping their stock I never would have made such a purchase. If I knew about Rockets I would have seriously considered them.

What gets me is we spend all this money on cars with a test drive of how long.

How many times ahve you bought a pair of shoes with a 5 minute one shoe test.

Ever buy a pair of hockey skates. You surely cant base the purchase on comfort and they run up to $500 a pair

The B&M arguement will become less and less significant in such purchases in the future. I am not saying on-line purchases are for everyone or everything but if i was a salesperson working in the mainstream stores such as Tweeter I would be worried.

Scott

[REFSELLER]

Actually, I work for a somewhat similar B&M and buisness is growing. As the equipment becomes for difficult to understand, more installation is neccesary, more prone to break,etc., we have been doing so much more because of the service we provide......Some people will build their own deck, I have built a few, but I'm at a point in my life when I am willing to pay the experts who are better equiped to do some of the more difficult "special" parts of the installation....

However, I am fearfull for the higher-end hobbyists/enthusiasts/audiophiles, because as this industry (home A/V) is starting to explode the hobbyist keeps running to the "deals" and may not think he needs the services of the high-end shop, the shop then focuses more to the mid-fi customer who needs and can be charged for the services, as well as the super rich who just throw money at their desires .The shop starts to carry more protected lines and the stuff that's available cheap on-line gets harder and harder to hear and the problem starts to perpetuate itself as some of these companies focus on e-marketing and price point rather than comparative quality which no one is asking to have demoed for them anyway........

[Bruinsrme]

Ref,

It is obvious that you feel on line purchasing is fraught with peril. have you read the forums for rockets or SVS. Customer service and quality seem to be the priorities of both companies. Just because something is sitting on a cemet slab does not mean the supplying company is more focused than the e-commerce companies. It means they have a much wider distribution channel. Lets use Monster cable for an example; Wide distro network, better cables e-commerce. Monster sells more because of their FUD and displays in nearly every retail store. Better cables sells less than monster but focuses on quality and proce point to a limited audience. Which is bettermy opinion Better Cables. Better value Better Cables, more bang for the Buck Better cables who gets my money Better cables.

Now I havebeen in numerous Tweeters and another Klipsch store called Percys. both have nice equipment but neither have high end receivers/components hooked up to the Klipsch nor do they have a setup with biwire. Percy's has a more dedicated setup for the klipsch but the room is 10x10 with enough seating for 2 and a slaesman breathing on you neck. is that optimal? Hell no.

Tweeter has a number of receivers going through this massive ancient switch panel with mediocre speaker cable. How much is lost from the mid switch panels of the DVDs and receivers and EMI from all the power and other cables running on top of each other.? Not that optimal is it.

So once again from my view point the chances of speaker X sounding as good in my house compared to the showroom is questionable. this is why Cambridge sound and Tweeter alike have very liberal return policys. On that same note SVS and rockets also have a liberal return policy. The only risk is the monetary risk when purchasing the e-commerce way.

Most B&M hi end audio/video store suck in their customer service. There are a few good ones butin general their attitudes are if you are not going to spend big bucks screw you. I am sure other forum goers will agree.

Minnmale is a one of the exceptions. I purchased some cable from him. He is totally professional and very knowledgable about the products he carries.

I like e-commerce and push it on my customers as a convenience and savings. I have directed 7 people to make purchases of plasma displays, klipsch speakers, pioneer components all on line where they save a great deal of money. i have had 2 people question their purchases in the manner I should have purchased the next model up. All word of mouth. that is nearly $20,000 taken away from retailers.

Exclusive lines that control their distro channels will always need a B&M, but in todays connected world the convenience of point and click is becoming more and more popular.

Scott

[REFSELLER]

Bruinsrme....

you are missing my point, I don't have a problem with on-line selling as a whole, in fact if I didn't get most of my equipment for free or at a GREATLY reduced cost from the mnfgr, I WOULD LIKELY DO SOME BUYING ON-LINE AND IF YOU KNOW WHAT YOUR DOING it can save you a lot of money...my lament is specifically because the trouble in my mind comes from the fact that what I need to know about equipment is hoW it sounds compared to brand X,Y, and Z.

Yes, the feature set is important, but I can read about that. But I NEED to hear the gear ,I want the Tweeter guy to take the Klipsch into A LESS CLUTTERED room with a good set of cables hooked DIRECTLY to an amp /rcvr of my choice, next to a similar pair of speakers or two ....

In the abscence of a WELL CONDUCTED COMPARATIVE demo people will gravitate to lower-priced equipment , AS PEOPLE SEEK LOWER PRICE POINTS mnfgrs (yes, even "hi-end" ones) will try to be less expensive to be more competitive.

Maybe mid & hi-end retailers only have @ 33% of their sales staff who are knowledgable enough (or willing enough ) to go the extra mile and set-up this kind of demo, but compare that to the bb's and cc's where they may have one mngr who is capable of such a demo , and the on-liners who can't do it at all.

If I bought speakers without hearing them against SEVERAL comporable models in a controled situation ,I would feel as if I was deluding myself or perhaps hearing what others TOLD me I'd hear.....you already have tons of people who say that you can't hear the differance between amps/rcvrs so they just buy on price/features/power.......

I have seen an ALARMING DECLINE IN BUILD QUALITY of this equipment over the PAST # OF YEARS.....Tell me you haven't noticed this as well....the quality of cabinets mnfgrd in mexico and china IS NOT CONSISTANTLY IMPRESSIVE.....

[Bruinsrme]

Ref,

its all about profits. Klipschs floorstanding are boxey and has a definitie 80's look. Look at rockets for instance, a much more attractive cabinet.

Quality, well MDF has taken over the world but Klipsch feels veneer is good enough for their product. Even the cherry speakers look like check formica slapped on a checap cabinet. The attention to setail of the manufacturing of my klipsch speakers is noticably poor. The speaker connector plates are not straight, attention to detail. When I first got them I was overwhelmed with the sound and didn't really look at the cosemetics. But looking at that now they look no different than the cheap quality speakers sold at best buy.

Lets look at best buy for a moment, many many people walk out of there with HTiB only sampling the speakers off the shelf. the Best buy near me has a 3% return rate on the HTiB across the board. 97% are happy enough with their purchase not to return it.

I would venture to say that the % of returns at stores like Tweeter do not exceed 15%, many happy with their purchase. Tweeter had a fantastic spread of speakers, viennas, mirage, and klipsch; a flavor for nearly all. They know that and one time visit purchase is their goal. All it takes is one in a small circle to start the ball rolling for brand recognition.

As more and more people discover the savings and the word of mouth internet speakers will sell faster than B&M are willing to admit. as this takes place traditional companies will seek to cut costs, quality, and investment. Quailty - less screws, cheaper binding posts/crossovers, less glue to hold the cabinet together, lower quailty vinyl veneer if possible, shorter warranties.

Within 3 years the B&M are going to feel the squeeze even more. Internet sales are going to soar from both e-commerce companies and grey market.....

scott

[Bitterhops]

Haven't checked the forum for quite a while, but when I saw the title of this the first thing that came to mind was "I hope they cut Magnolia out!" Yay!

Tried to buy Klipsch speakers in December of 2001 from one of their stores here in Oregon, and needless to say it was less than satisfying! I didn't think that Klipsch was being well-represented at all. I ended up buying from Good-Guys. There are no "indy" dealers that I could find in my area. Kind of sad to see the smaller places go away. Buying equipment now is more like buying a car. I hate salesmen that have to wear ties!

Now the Synergy series will be sold by Best Buy. Hey, at least those guys don't wear ties! Yeah, it will too bad not to be able to listen to both Synergy and Reference in the same room and compare. You have to go with the Ref even if it means you'll have to send your kids to public school next year!

It will be interesting though to see how the Klipsch fare against the Sony, Yamaha, Warfedale and Boso speakers. Best Buy is probably the worst place to try and listen to speakers with the HT area louder than crap, people cranking the car systems, and others stress testing the boom boxes and bookshelf systems in the cavernous, big box building.

It will be a bold new market. I say good luck to Klipsch. Hopefully the BB shoppers will recognize the quality!

[avman]

please see 'pwk and his philosophy on quantity vs. quality of sales' thread, or tell me how to move it to this thread. thanks,

avman.

[Bruinsrme]

Avman

Quality vs Quantity

Old school make a quality product charge a decent price and have a customer for life.

New school profit first and foremeost

build an adequate product with mediocre material

make the cosmetics shiny and eye catching

move operations over seas

customer commits with down payment

mass produce

let the name drive the sale

Jack up MSRP so sale prices look more appealing to the customer

Sadly Klipsch is not the only company taking this route but is rather late getting to the game.

Unfortunately the Klipsch name may dilluted to the general public but will still be strong to the avid audiphile.

The move to BB will be inteesting for the company and consumer.

Just remember its all about the profit.

How can a company having a 76k employees making a profit of over 4 BILLION dollars over the last 5 quarter not afford to give there employees a raise.

All in the name of profit. then they ask us not to use the medical benefits because the costs have gone up. because ot all about the profit not about the product.

Just MHO

Scott

[harleyd]

Hey guy's... too much politics for me.... I like the RB-75's. They answer all the problems for me (for surrounds)......but where are the retailers now???? Who's gonna sell em for ya??? I've had a set of Khorns (best ever made, w/MacIntosh amp and pre amp),,,,now have the R-7's the whole line, and to be honest, I'm a little disapointed.....When do you guys get back to the roots, grab BK, Canton, and Infinity by the balls and put the name back where Paul wanted it. Go back to the roots....like Gordon Gow did for MacIntosh years ago.... now Mac had other problems.. who's names won't be mentioned here, but the Big G (Gordon) made it happen for the premire amp manufacturer in the world. Why can't the legacy of PK endure another generation and be the best the world has to offer.... I believe in the new business model of trying to bring the best to the masses..... but the R series has always been for the individual who can achieve the level of sucess that can afford him the level of quality that he desirves, and the R-series has the answer..... Make it happen....

[Griffinator]

I'm trying really hard not to be completely offended at all the slag directed at BB employees.

I'm not the only guy working for BB that knows his **** about audio. I don't know who your local BB managers are hiring, but obviously you're dealing with some of the dregs.

There are hundreds upon hundreds of us that communicate via the internal bulletin boards that are very much up on the latest trends as well as knowing the fundamentals. We all recognize the shortcomings of BB's audio lineup, and we all celebrate heartily when a fine company like Klipsch jumps on board with us.

Believe me. I'd love nothing better than to see Sony Audio go away for good. It won't, though. Sony's too hung up on making everything in your house say "Sony" - even if it is CRAP.

I'd love to see BB kick Bose to the curb where those snobby overinflated bastards belong, just like they kicked Vega to the curb last year. They won't, though - too much brand recognition. That's fine - I'll have all kinds of fun killing Bose systems with JBL, Klipsch, and Athena now instead of just JBL.

Meanwhile, you can rest assured that I will never tell a customer that the Synergy series is "just as good" as the Reference or Heritage stuff. I'll just tell them what I always tell them:

Home audio is the last market left where you get exactly what you pay for

[jzoz01]

I see where you're coming from griff, but unfortunately there really aren't enough people like you at best buy, nor will there ever be. Anytime i've been in there they seem more interested in selling people extended warrentys then a quality product. Just my $.02

[jzoz01]

Hey griff, got a question for you. Klipsch already has a 5 year warrenty on it's speakers, does best buy still try to sell a service plan on them? It seems like they are already covered for 5 years. I'm not planning on buying any, but just kinda wondering what their plan is, seeing as selling the service plans was always important there.