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Negotiating Price with Dealers?


It’s fair to say that I do “thankfully” have a number of loyal customers
I most certainly do acknowledge this in various ways
For instance I do let them take expensive items to try without paying for them and also for prolonged periods so they can evaluate them fairly and without pressure
Also I take staged payments “credit” over months not weeks on larger amounts so to ease the enormity of outlay
I also give favourable part exchange and make the process more elegant for loyal customers
These are things I’ve adapted over the 40 plus years in the industry
Yes we are a dying breed and becoming a rarity in this small hobby of “audiophillia”
But my children aren’t going to carry on my business when I retire
And like many other specialist we will all inevitably disappear
So use us while you still can

gez said:
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 whose 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.
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If you know exactly which product you want to purchase, there is nothing wrong in asking two or three dealers what their very best price
could be. I used this approach a few years ago and saved around 20% off the full retail price of several components bought together.
If you simply don’t ask, then you don’t get..
 
Midlandaudiox said:
Yes we are a dying breed and becoming a rarity in this small hobby of “audiophillia”
But my children aren’t going to carry on my business when I retire
And like many other specialist we will all inevitably disappear
So use us while you still can
Click to expand...
Thats dark pessimism no end.
Lighten up, look forward find new methods or close down.
Butchers or Shoemakers in a mood could cry the same decades ago.
 
colasblue said:
If you don't ask then you don't get!

Some dealers will also happily let you know they have ex-dem units coming up at various future points but different dealers have different policies.

The mark up on Hi fi is pretty big (100% at least) so it's there to be taken off
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100% after rent, rates, utilities, taxes?
 
pfbaat said:
Thats dark pessimism no end.
Lighten up, look forward find new methods or close down.
Butchers or Shoemakers in a mood could cry the same decades ago.
Click to expand...
Not at all it’s a fact the high street is pretty much dead along with a number of specialised outlets mainly due to Online retail
New methods aren’t really the reason I got into the industry can’t see the point of becoming a place that is a box shifter
My butcher is still in business along with my shoemaker but they are still maintaining their high standards of quality rather than cheap crap sold by many
Close down ? Eventually yes but not for the moment
 
linnfomaniac83 said:
100% after rent, rates, utilities, taxes?
Click to expand...

No I was thinking gross markup.

I'm not impressed by the dealers on here insulting our intelligence by saying they only make 30% though. I don't see how they could possibly exist on that sort of margin unless they are selling at least 2-3 grands worth of stuff every day.

The

30% manufacturer
40% distributor
30% dealer

structure suggested above may have worked for imported budget equipment in the 1980's when dealers were shifting a lot of boxes (certainly far more than now) but it could never work well in the current market.

You'll be perfectly well aware that the manufacturer markup operated by your favourite firm is a lot higher than 30% and some players are probably worse. The fact that Rontoolsie could buy a high quality artisanally made Chinese copy of a top valve amp for 10% of it's RRP (still 7K though) says it all at those price points.

In the world of luxury and designer goods 1000% markups are not uncommon. You really are paying for the name.

The ChiFi maestros have cracked the whole retail markup issue by selling primarily on the internet only and unfortunately they will be the nemesis of the traditional dealer system. I reckon they still make a pretty decent markup relative to component and manufacturing costs.

The deal Steffan is currently offering on his runout Hypex OEM modules makes you query the retail price of the "DIY" Nillai option.
 
colasblue said:
No I was thinking gross markup.

I'm not impressed by the dealers on here insulting our intelligence by saying they only make 30% though. I don't see how they could possibly exist on that sort of margin unless they are selling at least 2-3 grands worth of stuff every day.

The

30% manufacturer
40% distributor
30% dealer

structure suggested above may have worked for imported budget equipment in the 1980's when dealers were shifting a lot of boxes (certainly far more than now) but it could never work well in the current market.

You'll be perfectly well aware that the manufacturer markup operated by your favourite firm is a lot higher than 30% and some players are probably worse. The fact that Rontoolsie could buy a high quality artisanally made Chinese copy of a top valve amp for 10% of it's RRP (still 7K though) says it all at those price points.

In the world of luxury and designer goods 1000% markups are not uncommon. You really are paying for the name.

The ChiFi maestros have cracked the whole retail markup issue by selling primarily on the internet only and unfortunately they will be the nemesis of the traditional dealer system. I reckon they still make a pretty decent markup relative to component and manufacturing costs.

The deal Steffan is currently offering on his runout Hypex OEM modules makes you query the retail price of the "DIY" Nillai option.
Click to expand...
My “favourite” firm is the one I’ve kept coming back to, along with my other favourite from Salisbury… it has worked out better for me so far than anything else (I’ve tried a lot of stuff).

There is other stuff I’d love… such as an EAR valve amp and BIG Tannoys, that’s a combo I’ve heard and absolutely love, but I can’t physically accommodate it so the Linn gets to stay a little longer… I do agree though, the retail price of their current stuff is off the scale, I will never be able to justify that.

Past few days I’ve been lounging in the living room and haven’t been into my listening room, and I’ve been listening to a Naim/Arcam/Wiim/Linn system that cost me about £1600 all in… hard to argue with it as a value proposition because it sounds excellent and looks the part too… and I can fix it when it breaks.
 
Actually repairability has become an increasingly important point and a good reason why I still have Olive kit. I can fix that if it breaks. I also have a through hole Lingo which I've kept for similar reasons (though it's connected to an elite Rock rather than an LP12 these days).

I'm 100% confident I'd have no chance of fixing my topping D90SE if it ever broke, but at it's price point it's almost disposable and will be obsolete in five years anyway.

The big worry is the Naim NBL's. Got spare tweeters but any other failure and they're likely as not toast.
 
colasblue said:
Actually repairability has become an increasingly important point and a good reason why I still have Olive kit. I can fix that if it breaks. I also have a through hole Lingo which I've kept for similar reasons (though it's connected to an elite Rock rather than an LP12 these days).

I'm 100% confident I'd have no chance of fixing my topping D90SE if it ever broke, but at it's price point it's almost disposable and will be obsolete in five years anyway.

The big worry is the Naim NBL's. Got spare tweeters but any other failure and they're likely as not toast.
Click to expand...
On your last point, I have a spare set of crossovers if you ever need them. Apologies for the thread diversion!
 
colasblue said:
Actually repairability has become an increasingly important point and a good reason why I still have Olive kit. I can fix that if it breaks. I also have a through hole Lingo which I've kept for similar reasons (though it's connected to an elite Rock rather than an LP12 these days).

I'm 100% confident I'd have no chance of fixing my topping D90SE if it ever broke, but at it's price point it's almost disposable and will be obsolete in five years anyway.

The big worry is the Naim NBL's. Got spare tweeters but any other failure and they're likely as not toast.
Click to expand...
I was playing with an Elite Rock 2 the other day, interesting and decent sounding deck… only worry for me is keeping the damping fluid dust free. If I bought one I’d definitely buy a dust cover for it.
 
paulbysea said:
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.
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Agreed. Has worked very well for me, too. I love my dealer and they don't send me to VM when I ring them up. :p
 
colasblue said:
No I was thinking gross markup.

I'm not impressed by the dealers on here insulting our intelligence by saying they only make 30% though. I don't see how they could possibly exist on that sort of margin unless they are selling at least 2-3 grands worth of stuff every day.

The

30% manufacturer
40% distributor
30% dealer

structure suggested above may have worked for imported budget equipment in the 1980's when dealers were shifting a lot of boxes (certainly far more than now) but it could never work well in the current market.

You'll be perfectly well aware that the manufacturer markup operated by your favourite firm is a lot higher than 30% and some players are probably worse. The fact that Rontoolsie could buy a high quality artisanally made Chinese copy of a top valve amp for 10% of it's RRP (still 7K though) says it all at those price points.

In the world of luxury and designer goods 1000% markups are not uncommon. You really are paying for the name.

The ChiFi maestros have cracked the whole retail markup issue by selling primarily on the internet only and unfortunately they will be the nemesis of the traditional dealer system. I reckon they still make a pretty decent markup relative to component and manufacturing costs.

The deal Steffan is currently offering on his runout Hypex OEM modules makes you query the retail price of the "DIY" Nillai option.
Click to expand...
What an extraordinary post. Are you an industry insider? Or a retailer? Or are you just making it up?
 
No I'm just a retired University lecturer in business. Most of it works for reasons which aren't actually hard to understand.
 
linnfomaniac83 said:
I was playing with an Elite Rock 2 the other day, interesting and decent sounding deck… only worry for me is keeping the damping fluid dust free. If I bought one I’d definitely buy a dust cover for it.
Click to expand...

Oddly I've never worried. It just seems to absorb the dust with no impairment of performance. I suppose I could change the stuff every 20 years or so but I haven't done yet.

It's not my "best "TT
 
No I worked PT in a hi fi shop as as student. the 30/40/30 deal suggested was correct for imported budget (or budget +) kit in the 80's, but the BADA dealers wanted a lot more.

Consider that a supermarket has a 15% markup. Huge footfall, everybody in the country spends £50 a week at least. I spend over £100, well off family of four £400!

Bigger shop OK but how much footfall does a highstreet HiFi retailer get and how much do people spend.

Employing two blokes and renting one prime retail unit is costing you (net) at least £3k per week (even if they're pretty poorly paid) plus the cost of financing whatever dem kit you have! You have to add 20% VAT to that and charge it to your customer. Go figure!

I can see that a second user dealer in high end equipment with no retail presence can manage on 30% but a new equipment retailer supporting a shop, demo items in stock and staff would struggle.

When Keith (Purite) was here he openly admitted that he didn't actually own a lot of his dem stock and that can obviously reduce overheads significantly but he still has to run a shop.

Be under no illusions - I don't begrudge dealers a living - they're a valuable resource and if we don't buy any new kit they won't be there in the future. If you want the latest "state of the art" it's going to cost you.

The trouble is the last time I bought into that (in the Hi Fi world) I ended up with a Tag McLaren DVD32R and Chord DAC64 feeding a 72/Hi/250/SBL's which rapidly morphed into an 82/2xHi/135's/SBL's. Six grand up against the wall in less than two years. I was in industry earning pretty well in those days and some people drop a lot less on cars so not too upset really.

I was actually able to enjoy listening to CD's for the first time in my life which is good, but the equipment was rapidly obsoleted and (in the case of the DVD32R expensively) unreliable which is bad!

I now own better equipment which in real terms cost 10% of the price.

My subsequent purchases have been largely pro audio or internet (been through the series of Benchmark DAC's to the Topping) lower markups and better value - not much better longevity really but at the price not so bad.

If and when the NBL's die I strongly suspect I'm going with a Genelec active pro system. Nuff said.
 
Years ago, I got a look at a dealer-price list for the Naim stuff. The dealer had a 30% markup at full retail.

So even asking for a 10% discount erases 30% percent of what the dealer actually makes. A small disount to you, but a large one to him.

I never negotiated prices, I simply paid what they asked and even paid extra for the 4-hour round trip for any installation that they did.

But when I needed the services of a dealer, they in turn alway lived up to the obligation of fully supporting whatever I bought for an indefinite period of time, including some things that were way outside the normal services provided.

I mean, would you go to a fine dining restaurant and then haggle over the menu prices??
 
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