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In Reply to: RE: HELP - Wendell, Josh, whomever!! posted by timm on June 19, 2017 at 11:54:13
One of the reasons that the Magnepans are such a huge bargain is that Magnepan a) maintains a tiny marketing budget, and b) doesn't provide dealers with costly concessions or inventory.
That being said, I think an argument could be made for having a Magnepan showroom in several major cities spread across the country where the entire Magnepan lineup is properly displayed and set up in a properly constructed room. You would need demonstration personnel, but you could otherwise carry no inventory, just direct purchases shipped from Magnepan, but showing that the purchase resulted from an audition at that showroom. Given how many companies are now trying "pop-up" stores to test ideas like this, I wonder what it would cost for Magnepan to try this kind of a pop-up for 90 days (particularly if you accompanied it with a marketing campaign that got the word out to potential customers in that region). Given the right location you could get a sound quality far better than is possible at the trade shows and probably better than you get at most dealers.
SD
Follow Ups:
Where there are no dealers they can try to get a user demo program with a referral fee high enough to make it interesting. But for the most part it would have to be small part time dealers, as the market is too diffuse and online sales from out of area lower the sales per sq ft and relative to demo inventory to be able to support that many full size dealers. One per metro except for the megalopolis like LA or NYC.
I think the issue is money. I was talking to Wendell about this this morning.
The whole high end industry is suffering because of the shrunken dealer network -- there used to be dealers in every town. And we all know that Maggies sell themselves when people hear them -- it's pretty much the only way to sell them, to give people a chance to listen. So how to give people an opportunity to listen with a limited budget?
AR used to hold live vs. canned demos, and had that booth in Grand Central Terminal -- but the cost of doing something like that is astronomical and AR's were mass market products rather than high end ones.
It's a real quandary.
location location location
That's the key.
Do you want lookie-lou foot traffic or serious buyers?
It would probably cost 500,000$ or more to run such a test. Lease a space for the required time. It has to be Enough time for people to hear and react. Nothing worse than to hear about the Magnepan Company Store only to find out they came and went.
You'll need trained help. Somebody from the Factory to oversee the installation and selection of gear. Training the new staff would be important, too.
A print run of paperwork from order forms to FullColor brochures and simple business cards.
Would it be fair to run such a test campaign for LESS than a year?
While you might be able to make a case for some Magnepan Dealers not doing well by the product, I'm not certain the 'company store' is the solution.
Too much is never enough
Yes, all good points. My guess it could be done for much less than $500k.
For example, I live in the San francisco Bay area (which should be a great market for Magnepan). Currently, there is not a single dealer in the entire SF, Oakland or San Jose area that you can walk into and just listen to Magnepans of your choice. Although rents are prohibitive finding a shorter-term rent on a warehouse-like space is certainly doable. The one remaining dealer is quite good (it is where I bought mine) but they now only offer pre-scheduled visits and the sound quality of the showroom isn't great and is too small to really get the best out of the biggest panels.
SD
Yes, Agreed on the first point. SF would be a terrific place for a real dealer or a factory store experiment.
However, and I urge you to verify this, I'll bet you can't get 2000 sq/ft for less than 10k a month.
5$ per foot per month is not that much these days. MIght easily be DOUBLE or more.
Help will be Professional and Knowledable. Not even good HighSchool kids, except if you have a warehouse to move stuff around in, and than depending on how much you sell.
You'll need GEAR in addition to the speakers. 2 or 3 amps across product / price lines to start and integrated as well as the big boys.
You'll need to divide the space into 2 or 3 or perhaps more sound rooms which are well insulated and properly designed. You can't just frame up walls and use sheetrock and paint it. Cheesy.
Don't forget the goal is to sell speakers and DEMO them in good conditions. My house would be an awful place given the size / shape of my listening area.
Add another 10,000 to 20,000$ for carpet / decor / lighting / business office+
So now, you've got 2000 sqft. 10k a month for 6 months
Walls to be built. 3 to 5 man carpenter team for a couple days followed by Electricians and than PAINTERS. painters? Yep. Gotta LOOK good. Call it 20 days of construction at 2000$ per day minimum. That's 40 Large.
You'll need on On-Site guy from Magnepan. A Site supervisor. And don't forget the plans and search FOR the correct location.
Call it 5 grand a month for 2 months. One of search, one of construction. Might be less.
Gear for the store and training are next. More time spent NOT SELLING where you do setups and tests and arranging and putting in sound treatments. Man, that sounds GOOD. Burn Rate of another couple grand per week.
Are sales Consultants on Salary ($$$ in bay area) commission, which eats into Maggie profits unless store sells for MORE than retail? I don't see THAT as a choice.
The longer you stay open, the lower your cost per day of all the above is, so that should be taken into account, too.
Is 6 months long enough? Is a YEAR long enough or TOO long? What if it takes off? Can you get a lease extension or will you be held up for higher rent or MOVE OUT?
As kind of an Aside, look at the APPLE model. Go to an Apple store and COUNT up what is on display than do the math.
Look at the side-racks with software, goodies cables, adapters, and whatever.
Nope, while I'm no expert at this, I wouldn't at all be surprised if my estimate were LOW not high.
And I'm certain that I may have omitted something. Maybe even something COSTLY. Building permits? Business License? Flea Collars for everybody?
Too much is never enough
How about I demo them in my house and am allowed to become a dealer with obvious low overhead? :) I have a 17x30 room.We call it the FOM - friends of magnepan network?
Magnepan expands their network. The product gets demo'd in a great environment. Customer gets a good price. And the friend makes a couple of bucks for doing nothing other than doing a demo with a crazed audiophile - just like they are.
Edits: 06/21/17
Neat idea. Maggie would have to judge each setup and make some compensation arrangements, but otherwise?
Not a bad business plan. I've come up with lots Worse, myself!
This one might work?
Too much is never enough
I have sold a fair number of them that way because people who come by for a visit can't help but ask about the system and then they want to hear it and then they want some...of course, few are ready to go with the full tri-center plus 7.1 combination. ;-))
SD
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