Raven Posted November 14, 2001 Share Posted November 14, 2001 quote: Originally posted by Ray Garrison: Everytime I see posts talking about the "high margins" that dealers make, I wonder if the poster has ever worked at a management level in retail. Taking forresthump's comment that "...They can give you a 25% discount & still have a 50% markup over their cost from manufacturer ..." that would mean that if a dealer's selling a pair of speakers for $1,000 list, then their cost is $500. ('cause if they discount it 25%, or $250, then they're selling it for $750, a $250 profit on the $500 item, or 50% markup.) Is making $500 on the sale of a $1,000 set of speakers unreasonable? Let's see... if I have those speakers in inventory for 6 months prior to sale (not at all unusual for a fairly expensive pair of speakers at a dealer who carries a large and varied line), and I'm paying 12% in interest to finance the cost of inventory (not unusual for a small business that is typically using unsecured credit - the bank's not gonna take La Scala's as colateral for a loan ), I've got $60 in interest charges. That leaves $440. If I pay $15 / ft on my lease (which is really, really cheap around here), and I have small store, say 4,000 sq ft, I'm paying $5,000 per month in rent. Add in electric, heat, telephone, other monthly bits, I'm probably up around $6,000 / month. I have a technician, who I probably pay something in the area of $45K if he's any good (again, this is cheap around here.) With benefits, that's another $4,500 per month. I have to pay myself a salary, let's be conservative, I want to make enough to live fairly well but not get rich on this... say $80K (which is less than I'd make doing just about anything else.) That's another $6,700 per month. So far, we're generating $17,000 / month in costs. I have salemen, who probably get a small base plus a commission on each sale. If their base is, oh, $24,000 and I have two of them, that's another $4,800 month fully loaded, more or less. Now I'm up to about $23,000 per month. If my salesmen made NO commission, I'd have to sell 52 pairs of those $1,000 per month just to break even, and we haven't talked about the cost of maintaining a repair facility, inventorying spare parts, test equipment, interior furnishings, advertising and a gazillion other things. If the salesmen make a small commission, say 10%, my profit per speaker drops to $340, and I have to sell 68 pair per month to break even. Why did I bother with this? It just bothers me when a retailer is critized for charging a reasonable markup to cover the cost of providing the service he's offering. Does that mean that everyone should pay that price? No, I don't mean to imply that there's some moral imperative to shop at the dealer... I bought my DVD player over the Web, 'cause I didn't need the services a dealer would offer me when I bought it. But if you DO appreciate the opportunity to listen to speakers before you buy them, to take home and try out an amp before you commit to purchasing it, to returning a pair of speaker cables and trying something else if the one's you got don't work too well in your system, then for goodness sake don't ***** about the price the dealer has to charge in order to keep his doors open. Ray Great post! I have nothing but respect for retail audio shops.. well, maybe not TheWiz and the other chains that hire minimum wage sales people who don't know anything. I had a friend who also owned an electronics shop in Ohio. He tried to compete with online for a while and soon found out that you have to charge apppropriately for your retail business. For the knowledge, support and convienience you provide to your customers. He ended up selling at retail and his business was thriving because he DID supply the added customer support that you don't get online. That being said, I don't fault the online people for selling cheaply. They have less overhead. If you're a buyer, you have to make the choice. Buy from a local retailer, pay a bit more BUT have the support and service or buy online at deep discounts and hope for the best. It's up to you. ------------------ Bob Lindabury SPEAKERS Fronts: Cornwalls (2) Center: KLF-C7 (1) Rears: RS-3's (2) Sub: AudioSource SW-15 Rear Center: Umm...any suggestions? AMP: Sony STR-DB1070 6.1 MISC: Hafler DH-200 Amp;Yamaha C-50 Pre-Amp; Nakamichi 482 Cassette Deck; Technics SL-1410MK2 Turntable; Sony DVP-S360 DVD Quote Link to comment Share on other sites More sharing options...
lovedrummin Posted November 14, 2001 Share Posted November 14, 2001 About a month ago I purchased Reference RB5 II, RC3 II, RS3 II & Synergy KSW12 From a local authorized dealer(an hour drive away) which I found on the Klipsch dealer locater section. They carried Synergy but not Reference, but could order them. I had done my on-line homework and had the list prices jotted down. The manager went to "see what he could work up" and knew I was ready to order if I could get a deal I was looking for. He came back with a price that was about 10% off list price. He saw my other figures on my paper & asked what they were. I told him they were from an internet dealer (I also included the shipping & handling with the figures). He went to see what he could do which probably included going on-line to check out my figures. In any event he came back and said he could match the internet prices without the S&H. I said we have a deal & about 10 days later I was a happy Klipsch owner. Also on the plus side with the local dealer _ I had ordered the RB5 in Cherry and they arrived in Black. The dealer let me take the Black ones home so I could enjoy the sound while waiting for the ones in Cherry. I also purchased a Denon AVR 3802 from the same place and they also matched the internet price on that. It was a very pleasurable experience dealing with this store - they called me to let me know the status of my order - I didn't have to keep bugging them. I will definitely be going back there for any future purchases. Sorry I got so long-winded. It's been a long journey getting the set-up I wanted. Couldn't be happier with the sound. Also this site has been most helpful.- LEW Quote Link to comment Share on other sites More sharing options...
belial Posted November 14, 2001 Share Posted November 14, 2001 Wow. I'm really surprised at the hostility expressed towards online retailers, especially from The Ears. First, I have to say, so WHAT if they are "glorified distributors?" As long as they actually ship me the product, in fine condition, at a decent price, I don't care what you call them. Are there sleazy online retailers out there? Boy, you bet there are. I'd even venture to say that there are more sleazy online retailers than there are sleazy brick and motar stores by far. But where I live, employees at the authorized Klipsch dealer LIED TO ME point blank about several things. Example: I had one guy tell me that the RB-5's only come in blond wood, which was of course what they had in the store. Quick trip online showed me that wasn't true. This is just ONE example, I have others, and have heard from others about this store's bad reputation. Now do I want to buy the blond RB-5s from them, for $800, or do I want to buy the BLACK RB-5s, the kind I wanted, online, for around $500? Which do you think I went with? (They were delivered promptly, in good condition, by the way.) There is a nice local audio dealer here--but he can't carry Klipsch, because the other guy has exclusive rights. I'm going to buy my new receiver from him, which he marked down around $60. I could get it for even cheaper online, but I would like to support this guy. Seb, who posts on here regularly, seems like a pretty decent brick and mortar guy too, and I'm sure there are many others.But that's not really the point. The ultimate point to me, as a consumer, is, where can I get the best deal for my money (without doing anything unethical, I might add.) Anyone who refuses to buy online out of some sort of principle, is simply misguided. Here is a link to user ratings of online vendor sites. It helps you know who to stay away from (I find the user comments especially helpful.) http://www.audiosurvey.com/cgi-local/mailorder.pl Good luck to those who buy online AND locally. This message has been edited by belial on 11-14-2001 at 01:36 PM Quote Link to comment Share on other sites More sharing options...
lovedrummin Posted November 14, 2001 Share Posted November 14, 2001 I didn't buy from a local dealer because of any dislike for on-line distributors and I might add that I've also checked out www.audiosurvey.com and found it to be a very good site. I wanted to buy from an authorized dealer fairly locally due to warranty. The store I purchased from also advised that if I have a problem with the products to just bring it in and they will send it for repair. In addition they advised that in the case of the receiver, they would let me have a loaner until mine was returned. Don't know what they would do about speakers - may be pressing my luck for a loaner there, but it was definitely a consideration in regards to the receiver. -- LEW Quote Link to comment Share on other sites More sharing options...
darrylp Posted November 14, 2001 Share Posted November 14, 2001 Why are you guys complaining. Here in Sydney Australia a pair of RF-7s sell for US$3000! Maybe one can get a 10% discount but I've certainly never been able to get service from a discounter here. Regards Darryl Quote Link to comment Share on other sites More sharing options...
TheEAR Posted November 18, 2001 Share Posted November 18, 2001 belial, You posted this... "Anyone who refuses to buy online out of some sort of principle, is simply misguided." Misguided,please let me cry. Know the facts before you call someone misguided.First of all "online relailers" read glorified distributors are just that distributors.They distribute the goods and dont have any real service,they will ship you a replacement within 30 days,as they HAVE(must) to replace a defective unit.Big deal. They will not ship you one after a year,they will NOT pass you any gear "when you wait for the repair to be completed".You cannot sell your gear thru them,unless they pay 1/10th the price you paid. These glorified distributors also destroy local audio shops.This in turn sends more on the "sidewalk" to look for jobs.They simply "dump in a legal way" the stock.They employ few peeps for the amount of stock they move and they can do this since they dont have any showroom,no real sales team,its a warehouse with a shipping dock.And a few "human answering machines" on the phone to take orders,probably one operator to take complaints and give RMA numbers(you can bet very busy). I will not support these who "dump" stock,even it its legal.Its unethical to me. TheEAR(s) Now theears Quote Link to comment Share on other sites More sharing options...
belial Posted November 18, 2001 Share Posted November 18, 2001 I don't want this to turn into a personal dispute between you and me, Ears. If you don't wish to buy online, that is fine, that is your decision. How you can argue that it is "unethical" to buy online, however, just doesn't make sense to me. If you have someone who provides bad service online, and someone who provides bad service in person, is the person providing you the bad service in person somehow better than the person providing you bad service online? Because they pay rent, or hire employees? I really don't get it. Sure, if I have a problem with something I order online and have to send it back, that's a drag, shipping etc, but I am willing to deal with it for the money I save. How is that an "ethical" question? Same thing with getting a longer warranty. Okay, I pay less, I get less of a warranty, that is a choice I make. As far as driving brick and mortar stores out of business, some DESERVE to go out of business. I will NEVER buy Klipsch from the local dealer in my area, because he is TOTALLY sleazy. Why should I support him instead of an online dealer who has dealt with me fairly in the past? Where is the sense, ethically or otherwise, in that? On the other hand, there is an audio dealer here who seems like a very fair, knowledeable person, so I am buying my new receiver from him rather than saving a little extra cash by buying online. The point is, each choice makes sense, and each choice is a decision I am able to make. I simply don't understand the idea that it is always "wrong" to buy online, and always "right" to buy from a brick and mortar store, no matter what the circumstances. If you want to make your purchases like that, it's fine with me. But I will argue with you if you say it is somehow unethical for me to think and act differently. PS: Ears, I forgot to ask you: What do you mean by "dumping stock?" Do you mean selling items and then not supporting them? This message has been edited by belial on 11-18-2001 at 01:50 AM Quote Link to comment Share on other sites More sharing options...
dearlv Posted November 18, 2001 Share Posted November 18, 2001 I work at an AV dealer. It is midsized, and the salespeople are well trained. If you just want a price, go online. If you want advice, and want to demo, come see me. If you have done your research and know what you want, but want to buy locally at a discount, tell the salesperson UP FRONT. Salespeople /managers will be more willing to meet the price if it is a relatively easy sale. If the local can come close, fine. If they can't, leave. Anyone that goes to a dealer and takes up tons of time of commisioned salespeople and then turns around and buys online should be shot in the head. It is not right to stroke experts for free advice and expertise- for which we are paid for- and not give the business. Of course if salespeople are clueless or lie, they don't deserve anything. cheers KLF20 main KLFC7 center KLF20 rears Yamaha RXV1 45" analog Mitsu not bad for an apartment Quote Link to comment Share on other sites More sharing options...
jdm56 Posted November 18, 2001 Share Posted November 18, 2001 quote: Originally posted by dearlv: Anyone that goes to a dealer and takes up tons of time of commisioned salespeople and then turns around and buys online should be shot in the head. cheers KLF20 main KLFC7 center KLF20 rears Yamaha RXV1 45" analog Mitsu not bad for an apartment dearlv, Uh, don't you think that might be just a wee bit extreme? I say, to each his own. There are pros and cons for each. You pays your money, you takes your chances. If you educate yourself and know exactly what you want, why not support a reputable on-line merchant if they can save you substantial bucks? If you want or need in-store auditions or advice, by all means, seek out and support a good brick and mortar establishment. ------------------ JDMcCall Quote Link to comment Share on other sites More sharing options...
TheEAR Posted November 18, 2001 Share Posted November 18, 2001 "Anyone that goes to a dealer and takes up tons of time of commisioned salespeople and then turns around and buys online should be shot in the head." Well on this one I agree with James,you cannot kill someone just because they try to profit of you. I was once working in such an audio shop myself,and one customer pretended to want a complete system.I asked about his listening habits,the music prefered,the room...acoustics.Well after about FOUR LONG HOURS the sucker told me he could buy for a bit less online.And called us(me and the store)thieves! Let me tell you I showed this lowly slime the door,and when he walked in about a month later NOBODY WENT to serve him,and I asked him NOT TO YOUCH ANYTHING or else I was forced to call security.He would never get any advice again from me or this store. You can fool me one time,good luck on a second try. So to the rest I agree with Dearlv.Since I understand how one may feel after working FOR FREE to help a sucker who does not even deserve to be served. TheEAR(s) Now theears Quote Link to comment Share on other sites More sharing options...
decibel man Posted November 19, 2001 Share Posted November 19, 2001 All pretty good points. This brings us back to the age old question: what the hell is Klipch doing to improve it's representation in the marketplace? There are a whopping two dealers within a 60 mile radius of my house and both are pretty damn apathetic towards Klipsch. And it seems that the Paradigm staff has done a much better job of building relationships with these two local retailers. Hint, hint if your current representation sucks, find somebody new. There are plenty of other dealers in the area that would do a better job. I haven't even bothered going to try and hear the new RF-7's, because earlier this summer I asked a manager when they would be getting them in and he asked ME when would they becoming out as if he had heard nothing about them. I would have to assume he knew they were out, and he just pretended that Klipch hadn't informed him yet as to blame Klipsch for him not having a pair on display yet. Could have walked out with some Studio 100's though. In the words of the eternally great Droopy Dog "That makes me mad" JT This message has been edited by decibel man on 11-19-2001 at 12:24 AM Quote Link to comment Share on other sites More sharing options...
dearlv Posted November 19, 2001 Share Posted November 19, 2001 shooting someone in the head is a figure of speech! I suppose... My point is that if you don't intend to buy at a store it is just not right to take up hours of someone's time. If you want to buy online, that's fine, but YOU do your research. Don't make people work for free and screw them out of their time. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.