Best internet prices?

[Anonymous]

Except that it's not just your two cents Professor.

I do not value the service of auditioning at 20% of the RRP. And in all honesty, a good dealer provides more than just an auditioning service.

I think there is too much margin in Hi-Fi at RRP and I think the dealer takes more than he or she deserves. They don't manufacture anything.

I pay What Hi-Fi to audition to a great extent. I haven't heard my Dali Phantom in-wall speakers, yet I've bought a set on the back of the performance of my own Dali Ikon 6 5.1s. No one had them to audition anyway. No one ever does with in-walls. Onkyo's 905 I didn't bother auditioning because quite honestly, at £800, what would be the point? I'm confident it's superior to my Denon AVC A10SE and What Hi-Fi's 5* is enough for me. Besides, with in walls, and a custom install, I'm not going to learn a huge amount in an audition.

That's my two pence worth. Yours, like many advocates of the traditional retailer, costs a heck of a lot more than two pence. I'm not a fan.

 

[professorhat]

Fair enough - if you're happy to buy blind that's your prerogative. Knowing a small shop owner though and the horrendous challenges they go through just to stay afloat each month (especially in this economic climate) I think most people who like to audition kit would agree with me.

 

[Anonymous]

I think both of you have a point.

There are plenty of box movers out there and if you're buying a TV or a DVD recorder or budget kit then you can use the trade press including WHF to help giude you choices using their excellent reviews. Then use the web and the phone to get the best possible deals. I too am a big fan of Richer Sound in this regard.

When it comes to Hi Fi it's a bit different. Once you are committing more that the cost of a TV you probably have a serious desire to listen to music as opposed to be able to play music at home. It's here where the specialist dealer comes into his or her own and where you need to be able to sit down and audition kit IMHO.

Surely the original point was that it's then not fair to said dealer to use their auditioning facilities / skills and experience and then go off and buy on the web. Most dealers will give something off of RRP or throw the interconnects in for free or something. It's about having a relationship and being a loyal customer.

And yes there are also those snooty dealers who don't deserve to be in business but thankfully they are few and far between.

 

[Anonymous]

Just to give you a recent experience I had with a local retailer (Sevenoaks - Watford).

I had already decided what I was buying (Onkyo 905, B&W MT 30 and related cables RRP £2.8k), when I decided to give Sevenoaks a call. The person I spoke to was very friendly and said they would beat RRP when I asked what the 'best deal' they could offer.

When I arrived on Saturday there were 3 shop assistants (no customers) and one of them gave me demo (he was very nice and helpful). When it came to 'negotiating' a deal, another shop assistant took over. He was very obnoxious, rude and completely unhelpful. I would have gladely bought from them if it weren't for him. He tried selling me a £60 HDMI cable! Told me I didn't know what I was talking about when I said that a cheaper cable could do the same job, and finally he started slagging off Richer Sounds! When it became apparent that I wasn't going to buy, he just ignored me!! Didn't have the courtsey to say 'goodbye' on the way out!

Anyway, I went to Richer Sounds (very helpful) for the Onkyo and TCR for the B&W's and saved myself about £500. Make up your own mind save that kind of cash or go to a local (rude!) retailer!

 

[Anonymous]

You'd have bought from the helpful guy though I expect if he'd been allowed to negotiate with you. I know what I'd do if I was the manager of that branch!

 

[Anonymous]

It's too often the story. The days of bricks and mortar are not numbered, but the retail process is changing. Consumers are getting better informed and want to know what exactly it is that they're getting for their money. If that means dealers will have to start carrying less stock and offering a better value deal to their customers to stay in business, that is not a bad thing. Progress doesn't always mean that just because someone wants to be a hi-fi dealer or any shop at all for that matter, they have a god given right to be.

This industry is developing. Wherever there is arrogance (see all Sony proprietary inventions) free trade will hopefully win. Where there is greed, someone will harness technology and undercut the greedy. This is the web and sites allowing you to thoroughly research.

Even Richer Sounds lets you demo kit and they love it. I mean LOVE IT watching customers walk out with a huge smile on their faces and a veritable bargain under their arms. If they can do it . . . . . .

I'm not shedding a tear for RRP retailers. I don't think they deserve a 35-50% mark up. For goodness sake, they can be charging in mark up the entire cost of the product at trade. This is insane. They have made nothing, no R&D cost, no parts, labour, distribution, marketing. They're just the last piece in the chain. The poor manufacturer. They deserve a better deal. That's my view!

 

[professorhat]

Will Harris:I'm not shedding a tear for RRP retailers. I don't think they deserve a 35-50% mark up. For goodness sake, they can be charging in mark up the entire cost of the product at trade. This is insane. They have made nothing, no R&D cost, no parts, labour, distribution, marketing. They're just the last piece in the chain. The poor manufacturer. They deserve a better deal. That's my view!
Well, if you could see my friend who is potentially going to lose his shop now because of the number of customers who spend time (sometimes hours) in his shop getting advice, then tell him they can get it a few quid cheaper online and walk out, you would disagree. He loves his business (not hi-fi incidentally) with a passion and he does everything he can to meet people on price, but he literally can't compete with online shops for the obvious reasons. I'll bet the many who have used his time this way will regret it when he disappears and they can no longer sample for free before they buy and I can see why retailers get angry with people who seem to expect to get all this service that online retailers can't give them for free.
You talk about greedy retailers, I think it's the consumers who are the ones being greedy wanting something for nothing.

 

[Anonymous]

Will Harris:don't think they deserve a 35-50% mark up. For

Hi Will,

I'm curious, what mark up do you think should they have? that's 35%-50% mark up not profit but mark up. You've got your shop rent to pay, the electricity to pay, rates and taxes to pay, staff to pay, in fact you've got so much to pay before you've made 1% profit.

You have to try to buy stock, hold stock, have stock that won't sell, time wasters, tyre kickers,of course a bad dealer is a bad dealer, and I've never heard of anyone charging over RRP, that's most bizarre. It's true we all love a bargain, but if it comes to the end of the month and the dealer needs to pay the bills and won't discount someone I see no problem in this and it doesn't make someone a bad dealer just the he can keep his doors oprn for another month.

 

[Anonymous]

I think that's a fair point.

Here's my answer.

I don't think in an open and free economy that anyone or any business has the right to exist. In their current form, hi-fi retailers overheads are too high, they occupy too much space that clearly is not turning over enough product with consumers now looking on-line as well.

Aside from those that abuse the hi-fi retailer by taking their time up with demos and then buy online, the average consumer is making a clear vote with their feet that they do not value the "service" a hi-fi retailer can provide. That's why so many are buying online or from the value retailers like Richer Sounds.

This means hi-fi retailers have to "up" their game (not necessarily their prices) to survive. They need to re-invent themselves. Perhaps high street locations are not the most suitable for a hi-fi retailer. Maybe they should move to medium sized units on bulky goods parks where the rent is an awful lot cheaper. I should know, I work in commercial property.

If hi-fi retailers got together (think CEDIA) and ran a co-operative system they could store stock regionally and only have display stock in store. You could run a delivery to store service with a half day turnaround and a next day deliver to home service. This would mean no-one carries expensive stock, other than on display and demo. I think you could cut inventory by 80% this way.

They're going to have to evolve. This means re-thinking the business model and re-inventing the industry. The internet isn't going to go away. You can either spend time commiserating with your friend about his slowly shrinking business or you can take him down the pub with a pad and pen and get started transforming his business plan. He may be the vanguard, and you may help him survive and prosper.

I'm sure your guy is a good guy and I wish him the best, I just don't think anyone, not the high street, not my own industry, have a right to survive. We're changing right now, the hi-fi retailers may need to change too.

 

[Anonymous]

Thanks will, I agree entirely on your point about location, where I live shops are closing all the time due to high over heads, competition for the internet, and big shopping centers that are just the big franchise stores.

I agree hifi shops don't need to be on the high street, I think the future will be out of town and/or from home, that's the easy bit, the hard bit is the evolving you mention, the future is the internet no doubt about that too, for example where I live a big place opened, they sold all the big names, B&W, they had the Nautilus on demo, Classe, Sonus Fabers, they had acoustically treated home cinema rooms, they had the lot, and yet, just 2 years on after opening, bang, closed down, even a lot of money and impressive showrooms can't buy you success.

So yeah, it needs to evolve, but how? how do you keep everyone happy? The customer, the manufacture, and the dealer? answers on a postcard please.

 

[professorhat]

I love your vision, Will, but I think you need to be a bit more realistic. Believe me, we've had loads of ideas on how to improve the business but the real fact is, they all cost money to implement. When your customers are using up your time then happily going off to the internet to buy the goods, business is down, turnover is down and profits can go from good to practially non-existant. Suppliers still have to be paid whether you sell the stock or not. It also doesn't help (a) it has been summer which is a slow time for retailers and (b) that many people are not spending as much money on these type of luxury goods with the credit crunch.
My friend has seen numerous business consultants to help transform the business, the bottom line is, no one can help unless there is some investment. Banks are cutting overdrafts at the moment, not increasing them because of the borrowing fiascos of many a few years back so where does the money come from? You have great vision, but unfortunately for most small businesses, what you propose just isn't feasible.
Of course he doesn't have a right to survive, but the fact is I believe people are destroying something they won't know they will miss until it's gone and by then it will be too late.
So it's far more likely these brick and mortar shops will just disappear I'm afraid - maybe something else will rise from the ashes, maybe not. I know you don't value the service you get from these shops, but many people, myself included do. So feel free not to shed a tear, I, and many like me, will.

 

[fatboyslimfast]

I'm with PH on this one. I decided to purchase some speakers recently, with a view on choosing either the MA BR2 or BR5. Had I not been able to listen, I probably would have just gone for the BR5 on the reviews.

However, I'm glad I did as I wasn't that impressed with either of the BR speakers (in context - over the speakers I already had), and then spent the best part of 2 hours with the dealer bringing in new pair after new pair until I finally settled on a pair of ex-dem RS6s as having "the sound" I wanted.

(Many thanks to Sevenoaks Bristol BTW).

Had I not had this facility, I would have bought the BR5s blind, and probably been less than satisfied with my purchase.

 

[Anonymous]

ProfessorHat you write so eloquently that I'm almost convinced. And if anything I'm a lot more sympathetic than I was.

So what can be done? I don't want to see someone out of business. Especially someone who loves the same things I love and perhaps I'm being a little selfish just wanting low prices.

So what is the solution. Well, like it or not, he's going to have to do something differently. This is regardless of what you, me or anyone else thinks. Simple reason why. This was a little rhyme told to me when I ran a restaurant (in a former life)

"If you always do what you always did, you'll always get what you always got".

Pretty simple. So he has to change.

Ok, number one is to make sales. So who is buying? (And who is not buying?) And I mean anywhere, not just from his shop. He needs to try to capture all those that are buying elsewhere and all those who should be buying but aren't. How can he do this?

1. A good way would be a week long home test and buy after.
2. Membership for good customers with automatic discounts after they've bought more than £1000 of product.
3. Tupperware Parties. Get everyone round to a friends house and demo home cinema kit. Host gets something free and a free install if people buy or more than 20 people come. Something like that.
4. Sevenoaks Hi-Fi did a brilliant thing about 20 years ago when they were ickle. They had a page in What Hi-Fi and did first hi-fi separates selections. Pick 1 CD player, 1 amp, 1 pair of speakers and they did a group buy price. It was pretty rudimentary but I bought my first hi-fi from them. (Wouldn't go near them now).
5. Move somewhere cheaper and market like hell. No-one in this economic climate wants to see a flashy, chrome, blinged-up retailer. People feel poor. The store should be rammed with gear and tiny. Think Richer Sounds. Run members only evenings and drinks events. Get enthusiasts together!
6. Look at every other industry and take the best bits and copy it. What is rubbish about hi-fi? Cables. Remotes. The fact you need a degree to watch a DVD. How about taking the pain out of hi-fi for women. (Don't jump down my throat girls, I know very few women who relish the prospect of figuring out how to hook up a stereo). So do it for them and run an advertising campaign in your window for really easy to use hi-fi. You could give everyone a universal remote and program it for them for free.

Come on, you guys make some suggestions. If you can get the volume of sales up you can cut your margins. This will make the shop more appealing. And you have to have a web presence. Offer something on-line that other people aren't. Sell one item a month at trade price. No profit at all. You'll have a store full of people and they'll buy everything else too.

If supermarkets can do loss leaders so can your friend.

I'm going to have some dinner. Come on. Don't be disheartened. Just turn your imagination on.

 

[professorhat]

Thanks, Will! Well, unfortunately he doesn't sell hi-fi - I was using him as an example of a small shop owner and the problems they face which aren't completely obvious to the consumer. The thing is, I think he can turn it around eventually with some new things coming in that are taking off, it really just comes down to whether the bank will give him the time to try or whether they just withdraw their support and game over.
Here's hoping...