Negotiating Price with Dealers?

[sktn77a]

Margins are approx:

30% manufacturer
40% distributor
30% dealer

Dealer's don't have as much to play with as many people think.

Dealer margins have been 30% to 50% for the last 50 years. That may have changed some with the disruption of the economy due to covid, but I expect it'll return to normal eventually. What has changed is everyone advertising and demanding MSRP - gone are the days of advertised mail order and internet discount prices - businesses have got smart and dislike trying to undercut each other.

 

[wow&flutter]

Back in the mid to late 70’s I remember a dealer I used would offer 10% discount if paying cash or cheque. If you were paying by any of the four credit cards you paid full price. Their margin was typically 30% at that point. Those were the days when the dealers were charged from 3% up to 12% fees on each transaction (I think he said Access and Diners were the lowest and highest fees at that time).

I had a chat with the dealer about this very subject back then when they had a new and a used version of the same amp, they were happy to run through their margins and the associated fees they were paying. Pretty sure there was a change in VAT rate around then as well. (Just checked 8% to 15% in 1979 gulp!!).

I think the Law changed back and forth over the following years where fees could / couldn’t be added on transactions paid with credit cards. I certainly remember that being implemented on fuel around 1980 when I had my first car.

As for making offers, I did it a few times on used kit but unless it was ex demo I paid the going rate. This was long before the web of course which became a game changer.

 

[Darren L]

Recent experience in the past few years starting with the most recent, cartridge 20% discount, speakers approx 15% discount, tonearm 20% discount, cartridge 15% discount, TT 20% discount, all items brand new bought from a variety of established legit dealers.

 

[Midlandaudiox]

anyway how much do you all EARN?

 

[paulbysea]

The customer-dealer relationship can be symbiotic and work to the benefit of both if you both take a long-term view and this has been the case for me. Whilst I like a discount I am more concerned about getting good service which includes installation and aftercare if needed. I get this from my dealer and I also get offered a fair discount due to my loyalty to the dealer. Sure I would like a bigger discount, but against that, I want my dealer to be profitable so I can continue to get the good service I have had for many years. As a long-time customer, if I mention I am interested in a product that is on dem, I have been offered first refusal on an ex-dem product when it has come up for stock rotation which means I get a bargain and it is fully run in when it arrives, one of the many benefits of building a long term relationship with your dealer.

 

[hifinutt]

The customer-dealer relationship can be symbiotic and work to the benefit of both if you both take a long-term view and this has been the case for me. Whilst I like a discount I am more concerned about getting good service which includes installation and aftercare if needed. I get this from my dealer and I also get offered a fair discount due to my loyalty to the dealer. Sure I would like a bigger discount, but against that, I want my dealer to be profitable so I can continue to get the good service I have had for many years. As a long-time customer, if I mention I am interested in a product that is on dem, I have been offered first refusal on an ex-dem product when it has come up for stock rotation which means I get a bargain and it is fully run in when it arrives, one of the many benefits of building a long term relationship with your dealer.

brilliant . totally agree . there are so many advantages to having a good dealer , especially when you need support . recently had an issue with some kit . emailed the founder and owner in USA on a sat night , he replied within 5 mins and worked with the dealer to sort things out over a few weeks . .they have huge costs in marketing , IT support , energy costs have risen , everything has risen so one needs to cut a bit of slack really

 

[Mick P]

Dealers have three major problems.

1. Anyone can buy a good quality used item for a fraction of the new price. This is especially true in Speakers. So where is the motivation to buy new. I have a pair of mint Shahinian Arcs that retail new at £6,495.00. I paid £1200.00 for mine and would probably get the same back today. How can a dealer compete with that.

2. The fact that stuff can be demoed without any obligation to buy. Can you imagine car dealers allowing you to use a brand new car for a few weeks in the knowledge you could return it and do the same with another dealer afterwards.

3. I also often wonder how many makers will quietly sell to a private individual who pays up on the spot in exchange for a discount.

 

[Tony L]

FWIW I’ve always felt it was out of order to ask for a discount on stuff after spending time in a dem room and plain rude if one is expecting an installation. I’ll only ever haggle on sealed boxes.

These days the only audio stuff I buy new are cartridges or electronic components (resistors, capacitors etc), so I just shop around for the best online price. With cartridges often end up importing direct from Japan or wherever to save a few quid.

 

[MVV]

New I tend to pay full price although I haven't bought new for years. Sometimes I may do some of the gentle stuff above like, asking if they have an ex dem item or similar. Used, I always negotiate and often have done quite well. So I got an Audio Note pre-power with phono for a grand. It's all context, this was in a market town, tele/hoover shop who often had bits of SH hi-fi. Almost no customers would even know what it was, he probably paid the widow £500, old fashioned shop so no on-line profile. Owner above retirement age, probably did a bit of a google. He had it at 2K which was a good price anyhow. I offered £1500 which was refused. 6 weeks later I took a grand in and offered a grand cash, no receipt. He took it and amusingly trousered it making sure his colleagues didn't see him.
(I kept my side of the bargain as a channel went out a month later, took it to his repair shop and paid £150 for the fix no problem. Did me a good job too getting the correct bits from AN)

 

[Darren L]

Recent experience in the past few years starting with the most recent, cartridge 20% discount, speakers approx 15% discount, tonearm 20% discount, cartridge 15% discount, TT 20% discount, all items brand new bought from a variety of established legit dealers.

I should add that these were all remote purchases made over the phone or email, no demonstration or installation, just a matter of the dealer doing a little paperwork and organising delivery.
I'd actually need to make a trip to another country to get a demo.

 

[PhilCTTE]

I sometimes ask about price matching. For Ex demo and used equipment I normally put in an offer without taking the pee.
I do think its a bit of a tricky dilemma when price matching a local high street retailer with a retailer who is only on-line with no overheads. If we are not careful there wont be any hifi shops left .. oh wait?
A lot of trading now is second hand online via forums as we all know. I have picked up some great bargains over the years. I have been lucky with my purchases in regards them being reliable and not breaking down. So we have to consider that perhaps its worth buying from trade for ex demo, used where you get extra guarantees. So we must expect to pay a premium here where you hope for that extra support from a retailer. Pointing out the obvious I know.

My habits over the past 10 years I'd say have drastically changed when buying kit. I have only demoed speakers prior to buying them and all from dealers. Where as some of the electronics are not even available for demo purposes. I mean if you spend all afternoon at a hifi dealer demoing kit and then ask for a heavy discount , its a bit p* take dont you think ?.

I was interested to read this from a dealer on AVF....

Please note that all demonstrations at our showrooms will be limited to a maximum of 1 hour initially.

All initial site visits will be chargeable at £250 inc VAT. This charge will be refunded should we carry out any works or supply any equipment.

Please feel free to enquire about product pricing and we will look after you, however, we will not engage in undercutting competitors to make a sale as it is not good for anyone.

 

[foxwelljsly]

One sure way to kill retail is to request discounts. It's a really naff thing to do, so don't.

The last time I bought something from a hi fi shop was Walrus Systems around 2006. I didn't ask for a discount and they still went out of business.

I see no problem with making an offer if you think it's worth less than they're asking, but would feel uncomfortable about doing so if the retailer had been very accommodating in terms of demoing different gear to facilitate your choice.

 

[Columbo]

Useful insights, thanks.

I'm in a phase of trying lots of gear because why not, meaning I'm re-selling a lot (and buying blind most the time) - trying not to throw money down the drain in the process. Some of the smaller brands take a huge hit on the used market - those pretty little Trenner & Friedel Suns in the PFM classifieds for starters, saw some Audiovector Arrete R1 go for £2.5k, which is mental etc. I guess I'll stick to buying seconds for now rather than annoying all you dealers out there, though the ex-demo route could be a nice win-win option I'll pursue.

Seeing those mark-up splits I wonder why more manufacturers don't go direct to consumer? Buchardt spring to mind. I guess a load of hassle getting marketing/awareness, logistics etc.

 

[Brown Bottle]

I asked for a discount on my speakers and the dealer threw in good quality stands as an alternative, which suited me.

I’ve accepted cables instead of discount in the past. One dealer gave me discount on a CD player without asking as I’d bought something at full price a few months before.

I run my own business and will give discounts if I can, a lot of the time I give my best price straight away to secure the work and tell people that if they ask. I have no problem with people asking.

Cheers BB

 

[glenda]

The last time I bought something from a hi fi shop was Walrus Systems around 2006. I didn't ask for a discount and they still went out of business.

I see no problem with making an offer if you think it's worth less than they're asking, but would feel uncomfortable about doing so if the retailer had been very accommodating in terms of demoing different gear to facilitate your choice.

Fair point but their niche business was located just off Park Lane I recall so the overheads/rent would have been astronomical. Discounting would have only hastened their demise, although they did good ex demo deals.
I am still regretting not having bought that Platine Verdier off them, back in the day

 

[Colin L]

A good dealer will usually give a decent discount on new items. No harm in asking.
I got a very acceptable price-break on my dCS gear and he made reasonable (not great) offers on trade-ins which I ended up selling elsewhere.

Sadly the UK hifi market is a bit of a rip-off especially for non-UK gear. Living in Asia you could routinely buy at 50% to 60% of the UK price. A friend in HK bought Wilson Alexia V's at 60% of the UK price (about 80k).

 

[gez]

The customer-dealer relationship can be symbiotic and work to the benefit of both if you both take a long-term view and this has been the case for me. Whilst I like a discount I am more concerned about getting good service which includes installation and aftercare if needed. I get this from my dealer and I also get offered a fair discount due to my loyalty to the dealer. Sure I would like a bigger discount, but against that, I want my dealer to be profitable so I can continue to get the good service I have had for many years. As a long-time customer, if I mention I am interested in a product that is on dem, I have been offered first refusal on an ex-dem product when it has come up for stock rotation which means I get a bargain and it is fully run in when it arrives, one of the many benefits of building a long term relationship with your dealer.

Rare these days, the vast majority of busnesses don't believe in loyalty these days. They're certainly not prepared to acknowledge customer loyalty at least (though obviously they have an expectation that customers do remain loyal). They may have people who's job it is to try and keep customers loyal but it's only ever on a high level strategy point of view. Gone are the days where walking in to your local butcher that you may have used exclusively for 5 years or more will get you any benefit for your loyalty. Businesses are under too much bottom line pressure just to survive (or making so much profit they just don't care about customers on an individual basis).

Specialist* audiophile dealers are in an ever increasinly vanishing group of businesses that even understand the concept of individual customer loyalty.

*By which I am excluding all the major "hifi" retailers, such as RS etc.

 

[James]

2. The fact that stuff can be demoed without any obligation to buy. Can you imagine car dealers allowing you to use a brand new car for a few weeks in the knowledge you could return it and do the same with another dealer afterwards.

I cannot imagine any car dealer letting you use a brand new car for more than a few hours, let alone weeks, for the purposes of a demo. Even with stock that is set aside for demos, the most that can be expected is an overnight demo, so you can check out how good the lighting is.

Hifi dealers might be more accommodating when it comes to home-dems, usually allowing up to a week of trial use. But you are right, there is no obligation to buy, so it is up to the dealer to judge your intent, and perhaps your character, before letting you take their kit home.

 

[Darren]

I sometimes ask about price matching. For Ex demo and used equipment I normally put in an offer without taking the pee.
I do think its a bit of a tricky dilemma when price matching a local high street retailer with a retailer who is only on-line with no overheads. If we are not careful there wont be any hifi shops left .. oh wait?
A lot of trading now is second hand online via forums as we all know. I have picked up some great bargains over the years. I have been lucky with my purchases in regards them being reliable and not breaking down. So we have to consider that perhaps its worth buying from trade for ex demo, used where you get extra guarantees.

I was interested to read this from a dealer on AVF....

Please note that all demonstrations at our showrooms will be limited to a maximum of 1 hour initially.

All initial site visits will be chargeable at £250 inc VAT. This charge will be refunded should we carry out any works or supply any equipment.

Please feel free to enquire about product pricing and we will look after you, however, we will not engage in undercutting competitors to make a sale as it is not good for anyone.

Which translates to :
" we are trying to make a living, don't take the piss"
Customers were always trying to get me to go to their homes, until I started to charge for it. Then, remarkably, it was no longer so important.

 

[allthingsanalog]

Which translates to :
" we are trying to make a living, don't take the piss"
Customers were always trying to get me to go to their homes, until I started to charge for it. Then, remarkably, it was no longer so important.

The worst thing for me was after 2 hours in the demo room and endless kit swaps then they pulled out their phone and mentioned the online price. From what I was told after I left, the internet boom at the time spelled pretty much the end for the store.