Question: How to purchase?

[Elliot G.]

I am doing some marketing research. Would you prefer to buy high end products at significant discounted prices direct from the manufacturer with little or no service except warranty or buy them from a dealer which would mean being able to possibly audition and have delivery and installation services.

Direct would mean shipped directly to your home ( freight charges probably added) sales tax might not be applicable as well. You would need to accept , unpack, and set up and install yourself unless you were willing to pay for such services from the manufacturer.

versus the current system and higher pricing

Any comments?
Thanks

 

[puroagave]

I've purchased both ways. at this point in my hobby life I don't need/want the hand holding and can take the 'risk' for lack of synergy if there's a miss match with the rest of the system. The direct model works for me, I've found many dealers that already do it.

 

[Bruce B]

I'd much rather pay the extra $$ for service... especially if i needed help down the road. Even that is not guaranteed any more. Dealers are cutting costs left and right. Especially if something is complicated to set up, like controls on speakers and computer audio, a dealer is indespensible.

 

[edorr]

I am doing some marketing research. Would you prefer to buy high end products at significant discounted prices direct from the manufacturer with little or no service except warranty or buy them from a dealer which would mean being able to possibly audition and have delivery and installation services.

Direct would mean shipped directly to your home ( freight charges probably added) sales tax might not be applicable as well. You would need to accept , unpack, and set up and install yourself unless you were willing to pay for such services from the manufacturer.

versus the current system and higher pricing

Any comments?
Thanks

Hands down buy direct. Most direct only sellers will give audition, 30 day return as well anyway, allowing for in house audition

What I don't like is those trying to have it both ways - if a manufacturer sells direct and through dealers (e.g. PS audio), this tells me they are pocketing the dealer margin themselves, with nothing to show for in terms of service. In this case, I would always buy from a dealer (come to think of it, I did buy my Oppo direct though). However, if there are no dealers, this tells me I am getting more value per $, because the middle man has been cut out (e.g. Empirical Audio).

 

[dallasjustice]

Dealers are necessary. Form a good relationship with a quality dealer. It will eventually pay off.

Bad things happen to everyone in this hobby. You will want an advocate working on your behalf when the bad stuff happens. Medium to large dealers DO have buying power with manufacturers and distributors. Whenever their customers have problems with gear, they stand a much better chance of getting the situation resolved favorably on their customer's behalf. On more than once occasion Scotty Warren, my local dealer, has refunded money back to me because of defective gear or gear that wasn't delivered in the promised time frame. This stuff doesn't happen often, but it happens.

Michael.

 

[rockitman]

It depends on the product. Cables, amps, pre's, dac's, ect don't require much service, imo. Speakers, especially larger ones are a different matter, especially when warranty requires dealer setup.

 

[puroagave]

Hands down buy direct. Most direct only sellers will give audition, 30 day return as well anyway, allowing for in house audition

What I don't like is those trying to have it both ways - if a manufacturer sells direct and through dealers (e.g. PS audio), this tells me they are pocketing the dealer margin themselves, with nothing to show for in terms of service. In this case, I would always buy from a dealer (come to think of it, I did buy my Oppo direct though). However, if there are no dealers, this tells me I am getting more value per $, because the middle man has been cut out (e.g. Empirical Audio).

are you sure? I can almost guaranty you they're not making 40 points on the sale. they're taking a lot less and so what they don't stock it (drop shipped directly from the mfr), show it or spend a lot of time with the consumer...you don't even need a retail storefront. selling over the phone out of your house is the new model.

 

[thedudeabides]

Best option if possible and applicable to specific piece at hand. Buy "dealer demo" with full warranty and relevant dealer services.

Save money while getting the warranty / dealer services.

GG

 

[Elliot G.]

It depends on the product. Cables, amps, pre's, dac's, ect don't require much service, imo. Speakers, especially larger ones are a different matter, especially when warranty requires dealer setup.

Lets say expensive products that are not technically complicated to set up Like a speaker or a preamp

 

[asiufy]

Dealers are necessary. Form a good relationship with a quality dealer. It will eventually pay off.

Bad things happen to everyone in this hobby. You will want an advocate working on your behalf when the bad stuff happens. Medium to large dealers DO have buying power with manufacturers and distributors. Whenever their customers have problems with gear, they stand a much better chance of getting the situation resolved favorably on their customer's behalf. On more than once occasion Scotty Warren, my local dealer, has refunded money back to me because of defective gear or gear that wasn't delivered in the promised time frame. This stuff doesn't happen often, but it happens.

Michael.

+1!

This is not a hobby that you buy once and forget it. You want a dealer to guide you on your "path", and avoid the side stepping that usually occurs when the "upgradeitis" comes.

I personally don't trust manufacturers that opt to sell direct AND still have dealers. It's an unnecessary loss of focus, and only explained by the dealer margin that they get to pocket. I think Transparent's model is sound, where they sell online the cheap stuff, and reference a dealer for the more expensive items.



alexandre

 

[rockitman]

Lets say expensive products that are not technically complicated to set up Like a speaker or a preamp

If I had a local dealer I might feel a bit different. NYC is 2.5 hrs away and quite frankly I haven't met a dealer down there I really care to do business with.(I have not spoken with all of the dealers, however) If the manufacturer stands by their product in terms of customer service/warranty, I have no issue going direct. My speakers being large needed dealer support to get them setup. If Wilson provided that same service, I would be pleased doing business direct with them.

 

[edorr]

are you sure? I can almost guaranty you they're not making 40 points on the sale. they're taking a lot less and so what they don't stock it (drop shipped directly from the mfr), show it or spend a lot of time with the consumer...you don't even need a retail storefront. selling over the phone out of your house is the new model.

Of course they do. If the dealer margin is say 40% and the manufacturer margin is 20%, the manufacturer pockets 60% on a direct sale. What the dealer does is compete with the manufacturer direct on price, so they give you 20%, or half his margin, to steer business his way. The manufacturer cannot match this discount on a manufacturer direct sale, because his dealers would ditch the brand. Either way you have huge channel conflict.

 

[Elliot G.]

Of course they do. If the dealer margin is say 40% and the manufacturer margin is 20%, the manufacturer pockets 60% on a direct sale. What the dealer does is compete with the manufacturer direct on price, so they give you 20%, or half his margin, to steer business his way. The manufacturer cannot match this discount on a manufacturer direct sale, because his dealers would ditch the brand. Either way you have huge channel conflict.

Edorr you are missing my point I guess I didnt make myself clear
Product A speaker- price list at dealer 50000.00
Product A - no dealers price direct 30,000.00
warranty the same
understand what warranty means however
delivery and install extra

This is the model I am mean

 

[edorr]

Edorr you are missing my point I guess I didnt make myself clear
Product A speaker- price list at dealer 50000.00
Product A - no dealers price direct 30,000.00
warranty the same
understand what warranty means however
delivery and install extra

This is the model I am mean

I understood. I'll take the factory direct speaker for $30K any day of the week. Just trying to explain the distinction between a clean factory direct and a hybrid channel model. There is an additional consideration. The public recognizes the difference in value as well - the speaker sold through dealer for $50K is worth $30K used within 6 months. The $30K speaker factory direct speaker depreciates much slower, because it is much more speaker for the money.

 

[AMP]

I personally don't trust manufacturers that opt to sell direct AND still have dealers. It's an unnecessary loss of focus, and only explained by the dealer margin that they get to pocket. I think Transparent's model is sound, where they sell online the cheap stuff, and reference a dealer for the more expensive items.

Transparent's program is very, very good for all parties involved. Customers get the convenience of online ordering and direct (free) shipping. Dealers eligible to participate in the program get credit for the sale (either via geography or the customer specifying the dealer's name). Should the customer have a problem or need further assistance the dealer and Transparent are there as a team, ready and willing to help.

 

[edorr]

Transparent's program is very, very good for all parties involved. Customers get the convenience of online ordering and direct (free) shipping. Dealers eligible to participate in the program get credit for the sale (either via geography or the customer specifying the dealer's name). Should the customer have a problem or need further assistance the dealer and Transparent are there as a team, ready and willing to help.

If the dealer takes a cut, this would not be a factory direct model. The problems start if the manufacturer has a clear incentive to bypass the dealer to capture the whole margin, yet at the same time wants to hold on to its dealer network. Ironically, I bought a Transparent cable through Elliot (who is a Transparent dealer) that turned out to be defective and the issue was resolved flawlessly and very quickly with his help. At the same time, if Transparent decided to do away with their dealers and sell direct only for 50% of what they charge for their cables now, I would prefer that. This is of course not a reflection on his excellent service, but I don't see much value in an intermediary for audio cables.

The most insane cable distribution channel is MIT. They sell direct at full price, have brick and mortar dealers that sell at full price (probably giving you 20%-30% dealer discount), and then they sell the exact same cable through online only dealer for 50% less. Crazy.

 

[asiufy]

I understood. I'll take the factory direct speaker for $30K any day of the week. Just trying to explain the distinction between a clean factory direct and a hybrid channel model. There is an additional consideration. The public recognizes the difference in value as well - the speaker sold through dealer for $50K is worth $30K used within 6 months. The $30K speaker factory direct speaker depreciates much slower, because it is much more speaker for the money.

Don't think I agree with this.
Do you really think an Internet-direct speaker, like this $7k one:

http://www.stereophile.com/content/jtr-makes-its-mark

will really hold their price better than, say, a Wilson or a Magico?


alexandre

 

[edorr]

Don't think I agree with this.
Do you really think an Internet-direct speaker, like this $7k one:

http://www.stereophile.com/content/jtr-makes-its-mark

will really hold their price better than, say, a Wilson or a Magico?


alexandre

Most serious factory direct products (e.g. Emprical Audio Offramp, Odyssey Stratus, Trinnov) hold their value far better than products sold with dealer markup - there will always be exceptions. To be fair, depreciating 20% on a factory direct product in year one for which you paid full list price is about equivalent to buying a product through dealer with 20% discount (which is roughly the norm for most products) and selling for 60% of MSRP after a year. However, products sold through dealer with tightly controlled dealer prices (i.e. no discount available) and taking a 40% hit in year 1 are the worse economics. I personally have never bought new from a dealer at full retail for this reason. I draw the line at 20% depreciation exposure, which mean buying factory direct, or from a dealer with 20% off.

 

[asiufy]

Most serious factory direct products (e.g. Emprical Audio Offramp, Odyssey Stratus, Trinnov) hold their value far better than products sold with dealer markup - there will always be exceptions. To be fair, depreciating 20% on a factory direct product in year one for which you paid full list price is about equivalent to buying a product through dealer with 20% discount (which is roughly the norm for most products) and selling for 60% of MSRP after a year. However, products sold through dealer with tightly controlled dealer prices (i.e. no discount available) and taking a 40% hit in year 1 are the worse economics. I personally have never bought new from a dealer at full retail for this reason. I draw the line at 20% depreciation exposure, which mean buying factory direct, or from a dealer with 20% off.

edorr,

You're only using yourself as an example, but there are many different scenarios.
Some people might just prefer to walk into a dealer, hand him their old stuff, and walk away with new stuff, discount or not. I know I do
Of course, doing what you do has benefits, but there ARE benefits into the dealer model as well, in peace of mind, risk, and overall ease of transaction.


alexandre

 

[thedudeabides]

will really hold their price better than, say, a Wilson or a Magico?

alexandre

I've seen many relatively new Wilson and Magico speakers going for 50 cents on the dollar or less on Audiogon.

I think very few brands are exempt from this phenomena assuming someone wants to hold a "fire sale".

GG