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That's a good question.... and PS Audio example

Posted by AbeCollins on June 22, 2017 at 07:27:13:
I'm seeing more audio manufacturers offer trade-in programs.

PS Audio started doing this a few years ago and I am now seeing more manufacturers with similar offers. I'm just speculating but I think this was one part of PS Audio's plan to clean up their dealer network and the rampant huge discounting that diminished the brand value and conflict among dealers. I also suspect that even after selling direct and giving the buyer a trade-in allowance, the manufacture maintains better margins vs. selling product through a dealer. In the case of PS Audio it looks like a hybrid direct-sales and dealer-sales model. The dealer can even participate in the trade-in program and take the buyer's old gear in trade. I think PS Audio ultimately compensates the dealer when the dealer sends them the trade.

But the trade-in allowance has to at least be somewhat attractive and part of that attraction is eliminating the hassle of selling the gear yourself online or taking a huge loss "giving away" your trade-in to the dealer. The dealer doesn't really want your old gear because the burden of selling it is with him so he offers you practically nothing on the trade-in.

PS Audio once had a "any working DAC" trade-in program that saved the buyer several hundred dollars. I didn't have a DAC that I was willing to give up so I bought a new off-brand tiny cheapie Chinese DAC off Amazon for $12.95 and used it as my "any working DAC" trade-in. PS Audio honored it but fine tuned their trade-in program within a week of receiving my trade. ;-) I don't recall exactly what they did but I believe they modified the terms by requiring the trade-in DAC to have a certain minimum "MSRP when new" value.

PS Audio also had some loyalty incentive based trade-in programs where they give a higher trade-in on PS Audio model DACs (vs other brands) in trade for their latest model. I took advantage of that a couple years ago as it was practically on par with selling my older DAC on the used market and I wanted the newer PS Audio model anyway. A win win.

I suspect the old equipment ends up with dealers that can afford to buy and quickly churn equipment, or maybe the manufacturer just compensates them to handle the hassle of selling off their trade-in inventory. Other manufacturers may offer refurb gear for sale directly. I'm sure there are any number of ways to structure such programs. There's a dealer in Broomfield CO (not far from PS Audio) that seems to have access to lots of used and refurb PS Audio gear.