It’s the time of year for saving money!
In Part One of my report on the hurdles audio dealers face, we discussed the practice of a customer visiting the business of a high end audio dealer, demoing and evaluating a piece of equipment, and then buying it online, either new or used. We considered the ethics of such practices and how dealers might or should react if put in such a position.
In Part Two, we’ll continue our look into the challenges of what audio dealers face from their own perspective: manufacturer representation and dealer concentration.
In Part One, I used as an example a cordless hammer drill. That product was actually a DeWalt 20V Cordless hammer drill and was available from both Lowes and Home Depot. I have one of each no more than ten minutes from my home so actually seeing the drill up close and personal was fairly easy. In fact, there were multiple outlets here in town that sold the drill that I could have used had I chosen to do so. I still bought it online – why? Simple – cost. I saved a considerable amount by avoiding the retail markup of a commercial home center. The drill arrived in about four days, well within my need for its use.
In audio, consumers sometimes find they have abundant dealers and sometimes not many at all in the immediate vicinity. Of course, this could be because dealers just don’t exist in a particular area. It could also be because manufacturers have chosen to sign up anyone who may remotely be considered a seller in order to increase market penetration.
I once had interest in a particular amplifier. I had read a review that was overall quite positive; I had looked at the company’s web site and was intrigued by what I saw. One thing the web site omitted was in what cities dealers were located. That the web site omitted this information caused me some concern. Were dealers not listed because the manufacturer had high dealer turnover and it was easier not to; or was the manufacturer trying to be somehow mysterious and not list their authorized sales outlets? I called and was told there was no one in my area and they suggested a dealer in either Texas or California. “But I’m in North Carolina” I told the guy on the phone. “Sorry, we don’t have anyone there” was the reply. Well… Why not?
If the product has anything going for it at all then shouldn’t just ONE dealer in the entire Southeast be interested in it? If not, what does that say about the product? Does the lack of authorized dealers in a densely populated regional area speak in some way to the performance and quality of the product itself? I basically hung up the phone and completely forgot about the amp. I then as now question the manufacturer in both their marketing capabilities as well as the product’s performance. And that’s really unfortunate, because it might be a great amp. In my view, if you don’t care enough about your product to go out and try to sell it, then how interested should I really be in trying to buy it? Does the manufacturer seriously expect me to travel, what, a thousand miles one way, to say nothing of the three thousand mile trip to California, for a fifteen-minute demo on an amplifier? Then again, I’m a sales guy so what do I know?
On the opposite end of the spectrum is a huge proliferation of dealers in any one given area. This creates all sorts of problems for dealers but may actually wind up being a benefit for consumers.
I’ve talked to several dealers who elected not to represent a particular product line because there were too many other dealers with the same line in the area. They felt like too many dealers just muddied up the water and made making an adequate profit on the product line very difficult.
In those instances, however, where in a particular regional area there are multiple dealers, the possibility of better discounting to the consumer certainly exists. The more competition in a closer proximity of a product line the better pricing usually will be. Of course with some manufacturers it almost looks like they signed up every dealer they possibly could just so they could get the demo order – something that hardly enables continuing business but a practice that has and probably does happen.
Finding an authorized seller who has some measure of locality, is trustworthy, is competitive on price and who carries the product lines an end user wants is getting increasingly difficult. The dealers with whom I spoke all told me it was getting harder to find good lines and make a living. The perception is that the manufacturers give them all the demo equipment they want and need for free, and that they have huge sales volumes and monstrous profit margins. I’m assured that none of those conditions exist.
Many dealers started out working for one in their youth, or maybe they have been an audiophile for most of their life and decided to start their own business. They understand that just as in any business they will have to endure the vagaries of the buying public, work and scramble to make a living and support their family, and do so all in an effort to do what they love – be in the high-end audio business.