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How many audio component customers are driven first and foremost by price? At what price point would you switch from a dealer that had provided you with good service, helpful advice, and perhaps even friendship to purchase a component on the web or from another dealer?Personally, I'd gladly pay up to a net (of shipping and any other cost diiferentials) 20% premium to a dealer that had always provided me with good service when I walked in the door or called, and who I knew would back my purchase up solidly if any problems developed. Much more than 20% and we'd also have a visit about price, although it might not be a deal breaker.
Not that I have an excess of funds but I do believe the factors besides price have a definate value. At what price point would you switch from a dealer that had provided you with good service, helpful advice, and perhaps even friendship to purchase a component on the web or from another dealer?
Follow Ups:
For real audio service I'd pay more than Web prices. Though I've done both, I'm finding that I prefer the dealer experience if the gap isn't too great and I can basically afford the dealer's prices.If the dealers are incompetent, snotty, or simply won't deal where it's possible and appropriate, then I'll give the business to a reputable Web outfit.
I don't expect the dealer to give it away. Frankly, nobody does who's trying to stay in business, so you aren't necessarily stealing food from the mouths of their children anyway. But I think they deserve something for their time and trouble and willingness to stand behind the products they sell (at least to get you manufacturer service if needed). I also think it's wise of us to support good dealers, because their showrooms can be significantly helpful in making audio choices (vs. buying a car). And I like to tell a merchant with my dollars that I appreciate him/her; it's good feedback. It's also nice to support an alternative to the awful big box commodity stores, for esthetic/community reasons every bit as much for real service and choice in the audio hobby.
Having said that, I have no sympathy for the snotty or incompetent dealers, of which there seem to be enough to keep this kind of thread going forever....
I thought about posting the following as a new thread, but since it's my first posting and because it references a particular dealer I decided not to do that. I don't want people thinking that I'm trying to do the promotional thing here. Click on the link below and scroll to the last item, which they titled "An Epicurean's Views." I don't think I can improve on it, so I decided to link to it.http://www.ultrafi.com/Mailbag/feedback_mail.htm
Lookee here, the local ARC dealer tried to screw me into buying ARC tubes for a small fortune by insisting I had bought the wrong tubes for my power amp from a well known tube supplier on the net when I asked that the amp be checked. They were wrong on the tubes, charged me an hour for service and when I complained asked that I go back to the store clear across town for a refund of the service fee.Needles to say, I never went back to the store for the refund since my time is precious to me and I have vowed never to go back there in the future. So this notion that a customer should be loyal to the dealer is so much hogwash. Even established and well-respected dealers play games with customers for short term advantage.
I used to buy cameras from the NYC guys who advertise lowest prices in every magazine. After several dumb getting-screwed experiences, I now always buy from one reputable firm that charges somewhat more than the bottom prices but who ALWAYS delivers, as promised, with no dicking around, no hidden crap, and who always stands behind those purchases. Ya just gotta know that kind of service costs that dealer quite a bit and that profits are slim.Now audio: high-end dealers make pitifully little money in their business--compared to what they could make selling used cars or shoes. (New shoes, that is.) (And I have no affiliation with any dealer.) When high-end customers get TOO demanding, they just can't do what we ask and stay in business. Granted, there are bad apples in the business, just as in any other business. But they soon get drummed out.
Sometimes it just kills me to read what we sometimes expect of the good business people, though. Whenever I've taken home a piece to audition, that means that shop owner is giving me his own piece of gear, for which he probably paid thousands, to take home to use for a short time. So now I don't buy it. In fact, if I'm statistically typical, I probably beg off on any purchase for the time being. So he/she's now spent several hours working with me, lent me a piece of equipment purchased on a business loan that's getting more and more used (and hence worth less)and ending up with no money from me for all of that. Even if I later buy a new DAC from him for $5K, he's still only making a net profit of something under $1K for a significant investment of his own capital and his own time and shop space. I'm just glad some of the good ones can stay around as long as they do to nourish my obsession.
But if I demo something from a dealer, and I buy it, I buy it from him.Period.
That being said, there's a lot of stuff I just 'buy and try' sight unheard. If you watch agon carefully you can get very good deals. Hell, I bought a new in a sealed box pair of Harbeth 30's once.
If you don't like it, you sell it, loose maybe a hundred or two hundred bucks. Big deal. I just bought new power amp to 'try it at home'. And none of this, 'have it back in the morning' nonsense, I can keep it until I decide to try something else.
-M
I have never had a problem paying good $ for service and committment, so I don't want you to take the following as a put-down of any kind. It's not. Frankly, I REALLY agree with you. For me, th REAL problem is: That any one single dealer is unlikely to carry all (or, really, even more than a couple) of the items that I want. Like many people, I SEARCH, SEARCH, SEARCH and FINALLY decide on one piece of gear. What are the chances that my local dealer happens to carry that particular line in a VERY crowded audio market? the real answer: Poor. COULD I be happy by buying gear just from that one place? A big ...maybe. But this hobby, particularly in the internet age, lends itself to HOURS of web surfing and discussion....and we ALL KNOW the feeling when we "run across" the one item that just looks and sounds like "exactly" what we have been searching for. THAT'S IT! THAT'S THE ONE!!! your heart starts beating faster etc, you start calculating how you can justify the price, conspire with the UPS driver to deliver at a time when the significant other won't be there etc. (Until the next bout of "upgrade-itis" of course!!What the dealer has to compete with is that the internet has made it VERY easy for me to inform myself about SOOOOO many brands and choices. If the dealer happened to carry that brand then I would have no trouble buying from them for a no hassle transaction. Now I want to say that I consider this a major "give", because I am internet savvy and could EASILY source most items significantly cheaper elsewhere, but I am willing to KNOWINGLY overpay for an item to both maintain the relationship and know that service is just a phone call away.
I sympathize with the dealers. It would be great to have a WAREHOUSE size store where you could REALLY shop a few hundred brands of higher end components. Imagine Best Buy or Fry's but dedicated to mid-HIGH fi. I would travel a great distance WITH MONEY READY TO SPEND in order to try, try, try and then buy good gear. If that "superstore" was able to offer great service (by mail of course) with knowledgable people etc., then I think that more than a few of us would be beating a path to their door.
Just some thoughts.
HowdyI agree with you: I'm willing to pay about a 20% premium and based on seeing experiences of others I think I'm doing well with that. But the local dealer with my favorite lines is out of commission and my system is mature enough that I'm unlikely to spend a significant amount for a while. Still dealers treat me well when they see me coming :)
-Ted
I think 20% is about right. I mostly buy used/demo stuff and I've bought from a dealer who charges significantly more than I'd pay for the same thing from a classified add. Sometimes 30-40% higher than it would go for on Agon. I haggle a little bit in this situation to get them down to about 20% but no further. Being able to demo stuff at home and decide what I like is worth a lot. I'd be happy to pay a reasonable fee for these demos. 2% of the retail price or something. That way I wouldn't feel bad about trying several things out. Or, if I want to try out a bunch of different speakers, I get the first demo free and after that it's $100 per demo. If I buy within the next 6 months then the demo charge is deducted from the price. That way I won't just be jerking the dealer around when I demo a bunch of speakers and decide I don't want to buy any of them.I don't know what the ideal compromise is but I can certainly understand why dealers are bothered by the fact that people demo their equipment and then buy it online for less. I can also understand why high-end customers want to demo as much as they can before dropping thousands of dollars on a component that is only slightly better than many components that are a fraction of the price.
Let me be perfectly clear. It doesn't matter how much a dealer works to show a product,convince a product,and sale him or herself. If the customer can buy it on the web or from someone else for as little as 1% or 2% difference then they're gone. There is no such thing as loyality these days. The bottom dollar rules and that's all there is to it! The internet saw to that mostly and it's a good thing in most ways. It just changes the way we do business from now on. Remember going to a tv dealer (most of the time at his home)and buying a tv. Then the dealer would come deliver and install the antenna. If you had a picture get bad then he would come out check out the tv and replace the tube. This was accepted and customers were grateful and didn't mind spending there money for that service. That all changed when the transistor was born. Next thing you know tvs are sold at the dime store for 2/3 what the old dealer was selling them for. My dad told me years ago this about business " if your selling water in the desert and all of a sudden it starts to rain you better figure out where to buy umbrellas to sale"! It's nobodies fault, it's just the way it is.
Those who buy from dealers or local stockists due to good advice , return policies , home auditions, friendship , enduring relationships would most likely not bypass the dealer unless pricing was radically different eleswhere , and if it generally was so , the dealer would be at fault for raising margins to unnaceptable levels.
Those that abuse dealers facilities and bypass em , would most likely always do so at any price difference.
Rodney Gold
Some things are not fungible. Trying to price in the benefits of relationship-building as a % premium misses the point.
... from wherever for the level of service I recieve from a good local dealer ('good' as I define it). No premium for just a product in a box; price drives that purchase. But the 'premium' over the lowest source I'm willing to pay is limited (but somewhat generous, from what I can see). I see others feel the same way, as noted, and I was curious as to how much they valued that premium at.
I think what people are trying to tell you is that they don't know. Is there a point at which the premium would become too much? Of course there is, but it's difficult to make a numerical estimate. Here's a different way to look at. Once the whole thing becomes a commodity then a dealer of ANY kind is going to become vulnerable to intensifying price competition. Anyone who's been to business school would recognize Michael Porter's analytical framework, and I think it applies here:- Barriers to entry
- Competitive rivalry in the industry
- Ease of substitution
- Bargaining power of customers
- Bargaining power of suppliersIn the customer-dealer high-end audio relationship, I'd say "ease of substition" is the most important factor. The minute a dealer just sells "stuff," it's the beginning of the end, because Best Buy is always going to kick his ass up one side of the block and down the other.
Fortunately for deakers, the intracacies of high-end audio are such that they can keep substition at bay. For every customer who comes in for an audition and then runs to the Internet to buy what he heard, there are five who come in looking for a solution to a problem.
Those people know they're going to pay for the solution; to satisfy them with respect to price, you don't have "meet any competitor's price" but instead you have to be sure that you don't do too much negotiating with ANYONE. To me, what might separate me from my dealer would be the idea that if I had just been a harder-nosed S.O.B. with him I might have paid $10,000 less.
Along the same lines, a good retailer of any kind has to avoid relentless upselling. I think of Bloomingdale's department store. When I lived in Boston I bought all kinds of stuff from them, and one thing I really liked was how a sales person would NEVER upsell me. Someone must have trained these people to convey the impression that if Bloomingdale's carries it, then it's worth buying no matter what it costs.
I wonder if some dealers might worry too much about the Internet and about price competition. I'm thinking of how the squeaky wheel gets the grease. It has to irritate the living hell out of a dealer to spend time with someone only to have them go shave 25% of the price by going to the Internet. But I really think that this sort of customer is a fairly small minority, at least if the dealer is well run.
Think of a high-end audio dealer in the same terms that you consider an interior decorator. If home design is really, really important to you, eventually you'll wind up using a decorator. And make no mistake, you'll pay for the privilege. Does this mean that decorators are out of business? Nope, not at all. But what it does mean is that the decorators who ARE in business tend to be pretty good at what they do, because the bad ones are being silently whacked by Ikea week in and week out.
I need to add something. When I wrote that there was a 5:1 ratio of solution seekers to box buyers, I was speculating. I hope there is, but maybe I'm wrong. Same for looky-loos being a small minority. I was writing what I hope to be true, not what I know to be true.
How many purchasers choose their source for a purchase first and foremost by price?
Well , its the duty of every consumer to minimise price all being equal. What you are really asking is who would be prepared to shaft a dealer or who would be prepared to buy untried.
I cant see how one can quantify the value of a dealers added services. If an untried component is not good , the value of a dealers input would be the differnce tween selling price and what the consumer realizes on disposal.
Rodney Gold
... various audio buyers attach to their purchases. I attach and willingly pay a relationship premium to the purchase of audio, automobiles, insurance, etc even though I can always source them cheaper.I know the relationship premium for some is zero. I'm curious as to what extent (majority? minority?) of the general mid to higher-end audio purchasing group that is the case. Just sort of wondering how this market functions and how it has changed.
Rodney gets quickly to the point. The original question is an invitation to a discussion that common sense can quickly obviate.
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