Substantial Dealer Margins

[Dave_]

Pete Shields:

Joelsim

Have you got any links to the Arcam dealers, as I'm thinking of upgrading!

thanks

if your after arcam dealers try sevenoaks s&v or lintone audio or failing that arcams find dealer page

oh,sorry for hijacking

 

[JoelSim]

Pete Shields:

Joelsim

Have you got any links to the Arcam dealers, as I'm thinking of upgrading!

thanks

I haven't I'm afraid.

 

[TheHomeCinemaCentre]

Service costs money. The less service you want the less you will generally pay.

Not all dealers get the same deal hence why John Lewis have some great deals and other outlets will not/can not match them.

End of line products can be heavily suported by the manufacturers in an effort to clear stock and key outlets are often offered superb deals to take on a lot of stock to clear. Richer sounds is a classic example of an outlet that can buy lots of stock and offer the deal to a lot of people.

 

[matthewpiano]

I agree Home Cinema Centre, although I must point out that I've never had anything but first class service from Richer Sounds in Preston.

 

[Anonymous]

I can say that televisions have surprisingly low margins. Sometimes none at all. (In canada at least), money is made on the extras, but even then it's not much. As for hifi, the huge markup exists because no dealer on earth would carry low-markup hifi. Why? Because in most areas, if you're a dealer and buy XYZ pre-amplifier and place it on display for a year. You may only sell 3 units that whole year. Profits need to justify floor space, if a dealer could make more money selling crisps and orangina in that spot they'd do that.

It's all about the value of a square foot, and hifi gear moves very, very slowly. Because of this it needs large markup to justify it's presence in the shop. Manufacturers jealously enforce these markups because if not for them their dealers would drop the line. Without the dealers hifi is dead. Expensive, limited run hardware needs a dedicated knowledgeable dealer with a lot of patience. I can tell you that mid and hi-end audio takes a lot of time to sell, to small number of customers. Then you've got fairly high failure rates (the higher end, the worse this gets) and the service to deal with. I won't say what brand. But a VERY well known and well-liked (on this forum) high-end brand sent us a component the other day, crapped out within hours of plugin. Just today we got our replacement and it's defective out of the box. It's part and parcel of being limited-run esoteric kit. For any seller to put up with the backend headaches, let alone the display and demonstration headaches there simply needs to be high profit.

That said (atleast with me) one purchases a very high degree of customer service and expertise with that large markup.

phew that was a long one

 

[batonwielder]

raypalmer: That said (atleast with me) one purchases a very high degree of customer service and expertise with that large markup.

Exactly. So why should we pay for poor customer service and lack of expertise?ÿÿ(applies only to my experience with certain dealers, of course)

 

[Anonymous]

Oh I'm totally on board with you there mate. When I read about your experience with the dealer who slagged off one brand for another that he carries. Unbelievable. I never slag anything, EVEN Bose!!! I really have to bite my tongue sometimes...

The other day we spent three hours setting up a customer's new tt, no charge.

I've run across lots of dealers who charge by the hourly for anything beyond selling the gear. Disgusting.

 

[Anonymous]

"I can say that televisions have surprisingly low margins."

Like most things in life this is entirely subjective. When I bought my Sony KDL 46X2000 LCD TV a couple of years ago it was £1.400 cheaper from a small scale specialised TV dealership in Glasgow with a 5 year warranty, than it was from a major Supermarket's on-line store, with a 5 year warranty. I was able to view it in store side by side with other TV's and pick it up from their warehouse that day. Both suppliers were obviously making a profit. and I doubt that the on-line store was making a lower profit margin. It was not an end of line product and it seemed to me that despite the superior purchasing power of the on-line supermarket they were clearly happy to make a far bigger dent in the savings I had worked hard to accumulate. Surely staffing costs, leases, rents, etc will vary from dealer to dealer, as will the profit margin they are prepared to accept, as is illustrated in these circumstances by an on-line store charging more than a shop based dealership.

Obviously such deals will vary from time to time and between shops. I have also had experience of a local specialised dealer refusing to negotiate on price at all despite the fact that he was charging £650 for a product that was available locally from a major home cinema chain dealership for £500. I wanted to support the specialised dealer but not at any cost, from the outward signs of wealth it seemed that he already was wealthier than me (house, car, etc although they might have been on credit) without me adding to it.

In general, I can understand consumers trying to obtain the cheapest deal possible, particularly if their income is limited, but on the other side of the coin I would hate to see specialsed dealerships that charge reasonable mark ups go out of business.

P.S. In relation to the other Sony LCD TV threads, this Sony TV is still working well, although I would concede there is some sligfht motion smearing with fast moving scenes. I have not experienced any of the other problems described with the newer large screen Sony LCD TVs.

 

[drummerman]

TheHomeCinemaCentre:
Service costs money. The less service you want the less you will generally pay.

Why? Does the sales assistant cost more than the despatcher/packer at the mail order company? Both are there for 9 hours, both have a job to do. Can you honestly say a listening room costs that much more to maintain? Often they are also used as display areas/stock rooms (I know). Sorry, I totally disagree. Service is part of being a retailer, whether that is over the internet or in shop premises. I'd expect exactly the same service/back-up.

Not all dealers get the same deal hence why John Lewis have some great deals and other outlets will not/can not match them.

I think you'll often find that price is not always linked to size of the retailer, I'm sure we've all experienced that. I found curry's rather expensive when it comes to TV's for example, more so than the small specialist which offered the said Pioneer Kuro for much less than them or many other online e-retailers. That was then (3 or so days ago), the same set is now available for £200 less elsewhere with the same warranty. That is how feeble and quick-lived the AV sector is and that was also the reason I did'nt want to pay the asking price. They (dealers) have to convince us that new is best, that we need the latest, naturally. My aim is to get the best at the lowest price without detriment to service which, quite frankly, I don't want to pay a premium for.

End of line products can be heavily suported by the manufacturers in an effort to clear stock and key outlets are often offered superb deals to take on a lot of stock to clear. Richer sounds is a classic example of an outlet that can buy lots of stock and offer the deal to a lot of people.

Yep and they still manage to offer decent service, well at least they did recently when I tried some of their products.

 

[drummerman]

I am all for supporting small dealers, especially if they are local. I do the same with grocery shopping but even there it does'nt cost me any more, probably the opposite in some cases. It's the personal touch and when something does go wrong, its easier to sort out but that's not necesseraly due to better service, rather geographic location.

So to go back to my inital posing, the said Kuro set, sold at the dealers for £2350 is now available elsewhere for £2170 or so incl. 5 year warranty. I'm pretty sure the dealer will again soon slash the price (as he has done recently). I offered him £2.2 for an easy, instant sale. No delivery or anything else and even now I would do the same even if the same set is available for £100 less somewhere else. Any more and I would reconsider my offer and adjust it accordingly. So, I am willing to pay a small premium for the physicality/location of the dealership ie. he is relatively close to where I live but thats a big difference to paying to much for service which should be taken for granted in any case.

Incidentally, I just found out they bought a batch of Panasonic TH46PZ85's which they sell for £999 incl. 5yr warranty (tempting). So even this relatively small dealership chain (4 small outlets) makes use of what I can only assume are distributor/manufacturers specials. Would I pay £999? No, probably £900 or some accessories with it!