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Why is there no price competition in the hi-fi business?

serendipitydawg

Dag nabbit!
Google for a replacement stylus. Nothing exotic. Loads of offerings, some via eBay or Amazon. All the same bl**dy price!

Isn't "price fixing" illegal?
 
RRP has always been legal.

So why no ads for example saying £10 off RRP for Ortofon 2m Blue stylus ( a popular upgrade from the 2M Red cartridge). Do hi-fi dealers not wan't to compete or do the manufacturers stop them ?

A quote from our gracious host, from this thread
https://pinkfishmedia.net/forum/threads/cartridge-demonstration.233045/page-3#post-3790230

" Mark-up in the audiophile world is pretty substantial with with something one could even argue was close to ‘price fixing’ in many cases as it is considered to be a service industry rather than a simple closed-box sale "
 
So why no ads for example saying £10 off RRP for Ortofon 2m Blue stylus ( a popular upgrade from the 2M Red cartridge). Do hi-fi dealers not wan't to compete or do the manufacturers stop them ?

A quote from our gracious host, from this thread
https://pinkfishmedia.net/forum/threads/cartridge-demonstration.233045/page-3#post-3790230

" Mark-up in the audiophile world is pretty substantial with with something one could even argue was close to ‘price fixing’ in many cases as it is considered to be a service industry rather than a simple closed-box sale "
Same reason why Mars bars well at the same price in every newsagent.

Also, some discounters just might find they can't get supply. There's no one size fits all.
 
As I recall, back in the Sixties (and maybe even into the Seventies?) in the United States, it was forbidden for stereo dealers to discount individual products. I forget the name of the commerce law that made this so. Anyway, dealers could get around this by offering discounts on complete systems (e.g., receiver, speakers, turntable and phono cartridge). What enabled them to do this and still make a handsome profit was the massive markup on phono cartridges—dealers could offer a 20% discount on a complete system and still make lots of money because the inflated retail price of the cartridge made the full system price so bloated.

Long after those restrictions on discounting were lifted, the huge markup on phono cartridges remained.
 
Advertise it at rrp, a customer buys on line & pays the advertised price.
Or customer goes into the store, has a chat with the dealer & gets a bit of a discount. Customer is happy he’s got a bit of a discount, the dealers happy as hopefully he’s got a potential repeat customer.
All seems fair enough to me.
 
Many years ago I bought a turntable, amp and speakers from I think Sevenoaks and they gave me a system discount, but each component was invoiced at RRP. They said that was to keep the suppliers happy as discounting was frowned on by some manufacturers.
 
Many years ago I bought a turntable, amp and speakers from I think Sevenoaks and they gave me a system discount, but each component was invoiced at RRP. They said that was to keep the suppliers happy as discounting was frowned on by some manufacturers.
The other favourite in the 80s 90s was to sell at RRP and give you "free" cables, speaker stands, a record brush, etc.
 
The other favourite in the 80s 90s was to sell at RRP and give you "free" cables, speaker stands, a record brush, etc.
Again, can’t see anything wrong with that. Maybe I’m missing the point? (quite possible).
If, overall a customer gets a discount on the price of an item, or as a whole package, I don’t really think it matters if that discount is x% off a particular item, or if the discount comes from an item the dealer can “ throw in as a sweetener”.
Some things probably have a higher profit margin ( & therefore more for the dealer to play with) than other items, but however they cut it, a customer is walking away happy if he feels he’s got a good deal!
 
So why no ads for example saying £10 off RRP for Ortofon 2m Blue stylus ( a popular upgrade from the 2M Red cartridge). Do hi-fi dealers not wan't to compete or do the manufacturers stop them ?

A quote from our gracious host, from this thread
https://pinkfishmedia.net/forum/threads/cartridge-demonstration.233045/page-3#post-3790230

" Mark-up in the audiophile world is pretty substantial with with something one could even argue was close to ‘price fixing’ in many cases as it is considered to be a service industry rather than a simple closed-box sale "
Do they sell like shoes ? Or maybe like cars , Milk, bread . Limited market I would say stuff that does not fly off the shelf. Look how many hifi shops that have closed in the last 20 years. Though I'm sure if you order 1,000 a discount will be forthcoming.
 
Nothing wrong with that at all. It's only the same as a car dealer giving you mats, a free special polish, a servicing voucher, or whatever other option. House builders do the same. An ex colleague of mine has a wife who sells for one of the housebuilders. He says you can tell when they are doing less well because the freebies get more generous. This carpet that should be £2000 Sir, we are prepared to offer it today at £500. The luxury kitchen option, yes sir, normally £10,000, if you buy the appliances today we will fit it for free, so that's a saving of £X. Garden landscaping, fancy bathrooms, fitted wardrobes, curtains, blinds, lighting, whatever else.
 
Using the OP’s example of a replacement stylus or cartridge,
If the dealer is asked to install the cartridge, is it ok to offer :-
A.... charge full rrp for the cart but install it for free, or
B.... discount the cart by a bit but then charge a bit for fitting labour costs?
Yea, OK in a perfect world, get a whopping discount off the cart AND get the dealer to drive miles to install for free, but then we wonder why some dealers go out of business.
 
some dealer contracts have terms such as 'don't advertise under rrp' in them, its entirely legal to contract a minimum advertised price, just not an actual minimum sale price. Same with no online sales or you loose the brand.
 
Using the OP’s example of a replacement stylus or cartridge,
If the dealer is asked to install the cartridge, is it ok to offer :-
A.... charge full rrp for the cart but install it for free, or
B.... discount the cart by a bit but then charge a bit for fitting labour costs?
Yea, OK in a perfect world, get a whopping discount off the cart AND get the dealer to drive miles to install for free, but then we wonder why some dealers go out of business.

Speaking as a dealer, I would say that it makes no difference. A and B are the same thing. What you agree with the dealer is between you and the dealer, but remember that dealers compete on the level and quality of service they provide, as well as on price. If you value the service then you will be prepared to pay a bit extra for it.

To pick up on your example, there are a couple of other things to consider. I am sure that there are some dealers who do not offer fitting at all. Also, the level of fitting service is not the same across all dealers. When I fit your cartridge for you, that involves a laser level and an oscilloscope, amongst other tools. I am pretty sure that is not typical.
 
Firstly see James post above.

From my days in the trade the mark up was not that substantial, generally speaking on electronics. If you compare to other slow moving goods, furniture for example (admittedly much higher storage and showroom overheads), then quite measely.

If we offered a 10% discount it would hurt more than a 50% discount at the furniture store. Therefore, trying to offer an "impressive" discount was difficult.

There was, however, a huge mark up on accessories so giving these away free made good sense, cost the dealer less but gave a far more impressive perceived discount.

Whether that balance remains the same I have no knowledge.
 
If you discount you sell more, which requires increased resource so the profit margin drops more than the discount would suggest.

It’s a balance that’s difficult to strike especially today when dealers that employ skilled staff and have premises are trading against internet box shifters.
 


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