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In Reply to: In general how much of a discount should i expect on a amp used as a demo at a shop? posted by V01 on March 16, 2017 at 13:40:54:
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.
Edits: 03/18/17
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Follow Ups
- RE: In general how much of a discount should i expect on a amp used as a demo at a shop? - gordguide 01:53:08 03/18/17 (0)
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