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In general how much of a discount should i expect on a amp used as a demo at a shop?

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Posted on March 16, 2017 at 13:40:54
V01
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Location: North East
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say they claim around 6 months use...

 

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Depends, posted on March 16, 2017 at 13:52:28
Awe-d-o-file
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on the brand a few other things. Some brands cost dealers as low as 40 cents on the dollar and some as high as 65-70. Time in the store could only change how willing the dealer is to sell which may be affected if he bought it outright or its floor planned.

So what is it?


ET

"If at first you don't succeed, keep on sucking till you do suck seed" - Curly Howard 1936

 

Brand new a discount of 15% is typical. So I would ask 25% off retail, posted on March 16, 2017 at 14:03:55
3+4=5
Audiophile

Posts: 642
Location: Midwest
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Some dealers think MSRP is THE price to sell at.
Those dealers may think 10% is plenty to offer as a discount for a floor demo.
A lot depends on current model? discontinued? slow seller? store no longer carrying the brand?
It may be the dealer just sells off demo equipment as many manufactures have a warranty rule of from the time the store GETS the item, not when they sell it. Particularly for demo stuff. So stores well the demo at six months.. etc.

If it is a discontinued model, the price is almost like used. And for an example, a Bryston 4B=SSTē now is worth maybe at best 50% of new at this point.
No dealer wants to sell it at that price. But for the buyer.. that is all it is worth.

 

RE: Depends, posted on March 16, 2017 at 14:19:29
V01
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Location: North East
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Primaluna Prologue Premium. I was offered about 15% off for a demo that they say was used about 6 months. Doesnt seem like that great of a deal to me.

 

You're in the drivers seat, posted on March 16, 2017 at 14:43:55
Don't let the dealer dictate value

It's USED, however you slice it. With CASH in hand, offer 60-70% of full retail.
I have a different PL, I like it, but come time to sell it, I will come to terms I ain't gettin'
80% of my investment back.

If dealers balks, check the online sites , there's a PL somewhere with seller needing
the cash. They seem to go quick, so be prepared to act fast.

 

RE: You're in the drivers seat, posted on March 16, 2017 at 17:22:01
raya
Industry Professional

Posts: 414
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Agreed. Used is used. Some demo units stay on all day......some very little. However, it is still used.

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 17, 2017 at 07:53:41
airtime
Audiophile

Posts: 8726
Location: Arizona
Joined: February 4, 2003
Search and see how much it goes for used. That's about what it's worth.

Do know this before buying a demo. A lot of demos are refurbs, factory seconds or returned units. There may be a longer history to it than even the sales person knows about.

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 18, 2017 at 01:26:53
gordguide
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Posts: 123
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Demo merchandise comes with a full manufacturer's warranty, so they are not the equivalent of a premium used example. I would expect discounts of 10 to 30% from MSRP and since the warranty is part of the transaction, even the lower discount, on certain products, could be a good deal.

The dealer knows what his markup needs to be in order to keep the lights on and the rent paid. He will be willing to make little to no money on a demo unit, so it will sell for less than a typical retail sale. But it's still a retail sale; it's not going to go out the door for free.

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 18, 2017 at 01:53:08
gordguide
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I have never heard of a dealer selling demo gear that is actually refurbs. Refurbs come into the store at a huge discount already; the retail price on a refurb is often less than dealer cost on a new unit from inventory.

Refurbs also come with a different warranty and often different packaging than factory fresh units. So it's not difficult to tell if what you are buying is new or refurb.

Let's not forget the dealer pays for shipping for most gear; he will have lines he moves regularly that he orders in sufficient quantity to get free shipping, maybe he's a Marantz dealer, for example, and will make relatively large orders from them, but that won't apply to most items he carries, and certainly won't apply to anything catering to audio specialty buyers. Nobody is buying Audio Research gear by the truckload.

He has a line of credit at the bank that he uses to pay for inventory, and that has an interest rate that also adds to the book value dealer cost. With his fast-moving line ... let's say it's Marantz again ... he pays in interest to a certain extent what he saves with a shipping allowance by buying in quantity.

All in all, if he has a boutique item with a 33% margin, after he adds shipping and demand loan interest, his raw cost is going to be maybe as high as 25% from MSRP.

Some manufacturers will offer a discount on Dealer Cost based on inventory at hand on the day new models are introduced or announced; those will be reflected directly in the price (a practice that became necessary in the computer industry beginning in the mid-80's).

It is not universal, however; it usually only applies to product categories where technology means new models are introduced yearly or more often.

There is such a thing as a "Floor Plan" whereby the dealer essentially rents his inventory from the distributor, paying a fee per month based on inventory on hand, but that is an expensive way to operate and is usually only done by stores that sell more than just audio gear. It's an expensive way to manage inventory and they will be selling everything at MSRP or close to it. Most readers of this forum wouldn't even shop at such a store.

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 18, 2017 at 07:32:32
krankkall
Audiophile

Posts: 285
Location: New Mexico
Joined: April 5, 2014
My first decent piece of stereo gear was a demo, back in the early 70s.
I got a demo Sherwood S-8900A for about 33% of new back then.

Steve

 

RE: You're in the drivers seat, posted on March 18, 2017 at 08:44:13
AbeCollins
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"Some demo units stay on all day......some very little."

And some get loaned out for audition into who knows how many homes. Many demo pieces are early serial number units, some loaned out to reviewers, some back from trade shows, etc. Technically these are used but given the snake oil nature of this hobby I tend to not trust 'demo' units. I actually prefer buying lightly used 1-owner gear.



 

RE: Depends, posted on March 18, 2017 at 08:51:36
AbeCollins
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I can get 20% off on just about anything brand new from one of my dealers w/o even asking. It's a given that he takes off 20%.

15% off on a used piece of gear is a joke and an insult IMHO. I get 15% off MSRP postcard coupons in the mail all the time from another local dealer. This is on brand new gear.

I've also negotiated 40% off new MSRP on certain brands in years past but I think those brands 'cleaned up their act' with their dealer network. While excellent products, those brands never held their value because everyone knew they were worth maybe 40% off MSRP to begin with.


 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 18, 2017 at 12:32:31
Diogenes
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What about at an audio show?

 

What about at an audio show? good question.., posted on March 18, 2017 at 12:57:46
3+4=5
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I do not know, but it is a good question worth a separate topic.

 

Agreed, posted on March 18, 2017 at 13:30:15
airtime
Audiophile

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A dealer does have to pay to keep the lights on and pay for the amp as well.

I didn't mean any slander buying a demo. Like you did say - getting the warranty is part of what you are paying for. And usually it's a higher ended product you're looking at. Not a NAD C316BEE for a few hundred dollars.

Obviously you sound like you're in the biz or know a lot about it. I'm only drawing on my experiences with those I "knew YEARS ago". They sold those classic 70s receivers locally. They usually had factory refurbs. Today with a Pass Labs or Prima Luna - you're better off sending a dealer a new fully functional amp.

 

RE: Depends, posted on March 19, 2017 at 03:20:13
fantja
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Abe-

whom is your dealer/retailer?

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on March 19, 2017 at 04:01:33
RGA
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IME most dealers give 10-20% off of MSRP on brand new sealed boxed items. So a used demo product where, as others have said, have had numerous people fiddling with it in store or in their homes shuould be at LEAST another 10-20% off on top.

I bought my Cambridge Audio CD 6 back in 1996 as a demo. It had the top removed and a glass panel put on it so people could see the inside - it was quite the overbuilt machine at the time and at the price. I got around 35% off list and I got well reviewed Tara Labs cables thrown in. The thing was basically on everyday for a year.

It's 2017 and that thing and the remote works perfectly. The Pink Triangle engineer created this for Cambridge Audio and it's been a rock.

I digress.

The PL is fairly popular right now which probably props up resale value because they have good marketing. But it's made in China and doesn't exactly use exotic parts.

The fact is there are a LOT of companies out there now making good tube amp makers making similarly priced Push Pull and SET amplifiers: Line Magnetic, ASL, Melody Audio, Audio Note, Cary, Dennis Had Inspire amps, Rogue Audio, Raven, Manley Labs, and probably 2 dozen others.

If I were you I would do the research and where possible the listening - pick THREE you can live with and then be a cat and patiently zero in on one for the price you are after and then pounce.

And who knows maybe you wait - find something you like better for less money.

 

Check your email, posted on March 19, 2017 at 07:21:21
AbeCollins
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.

 

RE: Depends, posted on March 20, 2017 at 09:30:04
bare
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"Primaluna Prologue Premium. I was offered about 15% off for a demo that they say was used about 6 months. Doesnt seem like that great of a deal to me ".
Nor to me either.
Audio dealers are a disapearing species.. For Reason.
Shop elsewhere or wait for the going out of business 'sale'

 

+1, posted on March 20, 2017 at 11:50:02
AbeCollins
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I'm all for supporting a local authorized dealer but bending over and grabbing my ankles, no.



 

RE: +1, posted on March 21, 2017 at 02:53:40
fantja
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Thanks! for sharing- Abe.

 

RE: In general how much of a discount should i expect on a amp used as a demo at a shop?, posted on May 16, 2017 at 02:38:00
gordguide
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Posts: 123
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" ... IME most dealers give 10-20% off of MSRP on brand new sealed boxed items. So a used demo product where, as others have said, have had numerous people fiddling with it in store or in their homes shuould be at LEAST another 10-20% off on top. ..."

Purchasing anything ... from watches to new cars (factory incentives come off the dealer cost, so go by the "regular" negotiated prices if you want to learn the margins) to mattresses to children's toys to audio ... is pretty easy to figure out, because when the product goes on sale, they sell for a bit above dealer cost, or at dealer cost. So if you read the ads over 12 months, you can always figure out what the store is paying for the product. Easy peasy.

There is an exception with regard to "loss leaders" which are sold below dealer cost, in the hope you will buy other things that make up an overall profitable sale. But these are easy to identify as they are the featured items in a sales flyer and will carry disclaimers such as "quantity is limited".

If you did that, you would learn the obvious. I'll save you some time with a few examples:

Clothing and jewelry is usually about 200% markup ($10 jeans sell for $30; a $100 necklace sells for $300), appliances about 25% ($100 washer sells for $125). Most things are somewhere in between those margins except new cars and trucks (10~15%).

Clothing, by the way, has high margins because the store must carry a variety of sizes, some of which won't sell well, and the product is both seasonal and trendy, so the store has to be able to sell off inventory a couple of times a year at bargain prices.

Many product categories have margins that are beyond the known retailer's necessary margin, so that an artificial MSRP can be advertised while every single reseller sells for less (eg: beds and mattresses; cookware sets), but still makes the industry average profit. Consumer psychology is well understood, in other words.

In consumer electronics large resellers negotiate for special models with some obscure features that most consumers will not notice are removed to bring down the dealer cost. Thankfully it's not very common in audio, but you never know when it might arise, since it's a very competitive industry with bankruptcies and consolidation becoming common, so never say never.

But to use an example, since Panasonic is out of the TV business, the apparently identical model at Best Buy and Costco and Wall-Mart will all have some features removed (fewer HDMI ports, no anti-glare coating, etc) to allow a low sale price while still earning the identical profit margin. If they offer price matching, they will also carry a unique part # so that price matches can't be obtained, while the independent dealers selling Pana TVs would get the full featured models but would have to sell at a higher price, as the dealer cost would be higher.

In Audio, with a specific brand / model, do a search, find out what dealers are selling it for. If the margin is lower on that line than other competitive lines, you will see it in the prices offered, and the dealer will offer a lower discount on that particular unit. If the margins are in line with industry standards, you will see that as well, and if the line offers margins higher than the industry average ... well, do I have to say it?

The point being that every component * that goes out the door via an audio reseller sells for the exact same profit margin, regardless of the MSRP. The only variation is when an item is on closeout or sale price, where the margin is lower, because if you turn over the inventory faster, you can end up with the same net profit over a 30 day business period. Obviously that strategy only works if the retailer moves many more than normal copies that month.

The price is the price. Pay it, after doing your due diligence, or not. But it's a mistake to think that every item has the same markup in the store. Retail doesn't work that way, and audio retail in particular doesn't work that way. Be careful if you are buying more than one item, because the retailer will blend the markups ... an amp plus a nationally advertised cable might ad up to $xx, but you can be sure most of the discount came from the cable, which will have a huge markup in comparison to the amp. And so on.

With regard to demo units, first of all the failure rate is low. Of those that will fail, the well known failure rates of electronics components are thus: 90+% fail in the first 24 hours; the majority of the remaining 10% fail in the next 30 days. Less than 1% fail after 30 days. So, I would not shy away from demo units; it works, the staff have listened to it and know it is up to snuff, and it almost certainly will last for as long as you own it. That cannot be said for an untested out-of-the-box new unit.

Refurbs are somewhat different, but no less scary to me. In a production environment, every unit may be tested for basic functionality, but no more. Perhaps every 10th or every 100th unit will be pulled to check for production issues, and it will receive a full suite of tests by an individual technician.

It's the same with refurbs ... an individual will run the full suite of tests on it, change what has to be changed, and run those tests again. It almost certainly has had more scrutiny and has spent more time on the bench than any unit you buy new-in-box. The post-sale failure rate for refurbs is way lower than for new production.

Furthermore, the vast majority of refurbs were refurbished not because of a failure, but because they were customer returns and need new documentation, accessories, or packaging. So you get a fully tested unit that had nothing wrong with it in the first place.

* Components, like receivers and loudspeakers have one markup, and accessories have another; the accessories will cost 2x or more less, compared to components, at the same per-$1 retail price.

 

20%-50% Sometimes dealer's price them right, posted on May 16, 2017 at 12:12:22
jedrider
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It may be practically new or used a lot or returned by a customer because of some issue.

 

RE: 20%-50% Sometimes dealer's price them right, posted on May 20, 2017 at 18:43:38
gordguide
Audiophile

Posts: 123
Joined: January 20, 2002
The warranty period isn't that long, and the opportunity to return for nebulous reasons is much shorter. I don't think you would encounter much in the way of "used a lot" with a refurb.

On the other hand, all my current, perfectly working gear has been "used a lot". My power amp was a demo unit when I bought it a dozen years ago. New tubes, perfect cosmetics. everything as new in the box, but no warranty as Sonic Frontiers was well out of business by the time the store decided to remove the unit from active demo use. I had a guaranteed not DOA condition on the sale and that was it.

It might have been seven years on the shelf by the time I acquired it (circa 2005), but then again, at about 40% of MSRP, I wasn't complaining.

If the OP is looking at a unit he absolutely wants, he doesn't have much choice but to buy what he can get for what he can get it for. Me, I'm more flexible but I am familiar with a wide set of acceptable options, so I can be patient and seek out larger bargains.

If you really want to save money, that's the best option, but most people aren't exposed to much gear so the list of acceptable choices is more limited to them. You DO need to choose components you've actually auditioned; it's a must.

 

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