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So do I, and it's so obviously unethical you'd think everyone would agree.

You would think so.

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Also, people do this to me too, asking for detailed advice to treat their room, when all along they plan to DIY or buy from one of the companies that sell cheap knock-offs of my products.

The only justification for this behavior is short-sighted egocentric selfishness.

Once the dealers and experts are gone, they will be stuck with only the online sellers. No demos, no expert advice, no assistance if things go wrong, etc.

Even Alex doesn't want this world - no more free ride at the expense of others.

Hi, Jim!

A small clarification: my catchphrase is,

You can use things and love people, or, use people and love things--it's your choice.

I am not going to continue to engage Alex O. in dialog on this topic; the "irreconcilable differences" are clear enough to all.

I do want to make one observation, though, about manufacturers who start out with a dealer base and then also go direct. Unless you handle it with great finesse (and the only nominee for that is Magneplanar's loss-leader entry level speaker with dealer trade-up guarantees) it is usually the beginning of the end. Manufacturers who know the score and who aren't seduced by the quick buck will turn the inquiry over to their nearest dealer, even if that is a dealer 500 miles away and it ends up as a mailorder sale anyway.

There are far too many equipment lines chasing too few dealers; the dealers who are still around have the clout to insist that manufacturers and importers be Caesar's wife.

I was just reflecting this AM that the entire state of Rhode Island, which includes Providence, Newport, and Watch Hill, can't support even ONE brick and mortar high-end dealer. And that I think is the wave of the future. People in the industry can either wake up and smell the napalm, or keep singing "Yesterday;" that was the message of my AWSI in the August issue--(their) culture eats (our) strategy for lunch.

JM

I buy based on reviews, personal experience and price. I have yet to meet a dealer whose personality I can stomach for more than a few minutes.

I think that explains quite a bit of the issue.

It's one of those things. At the end of the third marriage, it's long past the time for the guy to engage in a large bit of introspective psychological work..and finally understand that he himself is the walking/talking 'issue', not the simply the three wives from previous relationships.

The logic gets lost in the self created and maintained emotional morass. I see some of that here.

When clarity comes (if it ever does) for you, Alex, it will take the form of being quite a bit more friendly toward the long suffering dealers.

And yes, they are long suffering. No doubt. Among them, you will find the great guys and the a-holes. And, like anyone with a bit of commercial self interest for the purposes of survival in a volatile marketplace, you will find the good ones are capable of sniffing out the guys like you and rightfully avoiding them like the plague. It's only common sense.

In a market where personal audition is key, then brick and mortar stores are essential.

The internet may bring variety, but for something like audio where personal audition is essential; then it becomes, by it's very nature, a 'top 40' box store-when it comes to sales success. Yes, it kinda cuts both ways, but when it comes to absolutes and hard numbers, that's how it finalizes at the finishing line.

In the three companies I've been involved in, we fully support the brick and mortar stores. EVEN IF..our product is essentially a internet product. And it has cost us, yes, but we support dealers. Period.

I remember, Alex, you giving me a hard time on a common sense commercial point in another thread and there was just no way you were 'getting it' no matter how I phrased or explained it. Oh yes, it was on the 'not clear warranty policy', Which I explained was a benefit to the customer, not a detriment due to the way WE handle it, and you gave me severe grief over it. It was as if you decided in you head that every one was out to fuck you, and they all possessed the morals and ethics of scum. The reverse was and is true.

That, for a person with basic reasoning skills, raises and rings all sorts of alarm bells. It says that Alex has a blind spot that he's not willing to address. I see that very blind spot raising it's head again, here in this thread.

To seemingly be a bit more fair, I'd say that you are not alone in this issue with regards to the recognition of it's existence. Many folks who don't understand the complexities of this issue are out there.

I am (or anyone I've ever met) also not immune to such behaviour. We all have our blind spots. The trick is if one has the psychological balls and will to ferret those issues out of ourselves and fix them......or not. Kinda tricky to feel something by it's absence, but hey, there it is. The mind is an odd beast.

But to also be fair to any potential possibility of solving the issue itself, it does tend to revolve around not really thinking things through fully..and being a bit too small and closed minded when it comes to the larger scope of the situation. It is essentially a scope of view and personal psychology issue. This is 'information' related, and also can be seen in scientific issues, etc. Psychology.

Psychology and logic do indicate that the first answer found is generally NOT the last or final answer. Even when answers are there and they fit the 'comfort mode' of the human being who is 'in situ' as it where..history shows that 99% of those answers are wrong. Ie..think again.

The greatest gift a human being can bestow themselves is the ability to learn. So few attempt it. And no, it ain't all that easy. Otherwise we'd be in quite a bit better shape right now. The short answer is that true learning is both physiologically and psychologically painful - most people avoid it like the plague.

John,

Sorry to mispeak on your behalf, but I guess my nearly 61 years is catching up with...oh, Ya, ME! (I had to look down at my name tag...again.! lol

We still luckily have some great audio dealers here in Atlanta. One of my favorites is Audio Alternative in Lilburn. A great audio/video retailer (Rega Dealer) who also has a great selelction of vintage gear for sale and always great advise. I only wish he was not the Hour + ride away (from me, but that is my problem), but always well worth the trip.
http://www.yeswehaveawebsite.com/

I think it as hard to be a manufacturer today as it is a retailer. I am not sure there are many who can survive being just a mail order house, other than including software (CDs and LPs) these days. It does seem that more are at least trying that route.

We really on this topic again? Here is an example of shopping around - I walk into Home Depot, look at the cost of the hammer, and then I drive to Lowe's, look at the cost of the hammer, apply some simple math skills, and then purchase from either Home Depot or Lowe's. I've not used/wasted anyone's time but my own.

Or, to use Alex's supermarket analogy, I walk into Kroger's, search out the tomatoes, check the price, and if I think the price is high, I then leave, drive to Wal-Mart, check their price, then decide where to buy. I've only used/wasted my time.

An example of not "shopping around" - I walk into a high end audio dealer, ask him to devote his time to my cause, let me play with his stuff, then, after I have used his time, tell him that unless he can offer the product for the price I want to pay, I am out the door. Here, the shopper is getting something for his time, an audition, but does not have the courtesy of letting the dealer in on the punchline, and does not give the dealer the choice whether the dealer wants to waste his own time by demonstrating a product for another dealer.

Only an idiot could not see the difference between these two sets of facts. Only a self-absorbed cretin could see the difference and care less about the distinction.

The solution, which Alex does not want to employ, likely for fear that the high end dealer would not voluntarily allow Alex to waste his time, would be to enter the store, ask the price, and then ask the dealer whether he could meet the "internet price." If no, then leave, having wasted only your own time. If yes, audition the equipment. The dealer at least has the choice of knowing the score.

That Alex chooses not to employ method two tells me all I wantr and need to know about Alex.

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The solution, which Alex does not want to employ, likely for fear that the high end dealer would not voluntarily allow Alex to waste his time, would be to enter the store, ask the price, and then ask the dealer whether he could meet the "internet price." If no, then leave, having wasted only your own time. If yes, audition the equipment. The dealer at least has the choice of knowing the score.

That really cuts to the heart of the matter, doesn't it.

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We really on this topic again? Here is an example of shopping around - I walk into Home Depot, look at the cost of the hammer, and then I drive to Lowe's, look at the cost of the hammer, apply some simple math skills, and then purchase from either Home Depot or Lowe's. I've not used/wasted anyone's time but my own.

Or, to use Alex's supermarket analogy, I walk into Kroger's, search out the tomatoes, check the price, and if I think the price is high, I then leave, drive to Wal-Mart, check their price, then decide where to buy. I've only used/wasted my time.

An example of not "shopping around" - I walk into a high end audio dealer, ask him to devote his time to my cause, let me play with his stuff, then, after I have used his time, tell him that unless he can offer the product for the price I want to pay, I am out the door. Here, the shopper is getting something for his time, an audition, but does not have the courtesy of letting the dealer in on the punchline, and does not give the dealer the choice whether the dealer wants to waste his own time by demonstrating a product for another dealer.

Only an idiot could not see the difference between these two sets of facts. Only a self-absorbed cretin could see the difference and care less about the distinction.

The solution, which Alex does not want to employ, likely for fear that the high end dealer would not voluntarily allow Alex to waste his time, would be to enter the store, ask the price, and then ask the dealer whether he could meet the "internet price." If no, then leave, having wasted only your own time. If yes, audition the equipment. The dealer at least has the choice of knowing the score.

That Alex chooses not to employ method two tells me all I wantr and need to know about Alex.

Well done.

AlexO, I think Mr. Garvin is spot on.

Tell the dealer upfront. End of dilemma.

Problem with that solution?

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He doesn't necessarily have to match it, but the difference has to be worth the savings in hassle.

This is not unreasonable. I usually buy from a local pro audio dealer. Even if he matches an online price I still have to pay tax, which is generally more than shipping. But I buy from him anyway because 1) I like the dealer personally, 2) he has a lot of stuff in stock, and 3) if I have a problem it's a short drive away and I know he'll give me a loaner if he has one. So a slightly higher price is worth the excellent service, fast turn-around, and reduced risk of bad service elsewhere.

--Ethan

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It can't be 30% more, but if it's within a few percentage points, that can save the hassle, then that works.

Then this might be a good time to explain how you view margins and why 50 points is unfair.

This is, by far, the most interesting thread in quite awhile. It hits right at the heart of the high end audio business. Since Alex O has lined up against just about everyone, concerning this controversy, I will respond to him first.

Alex's point concerns competition. I call it "price discovery," since I am and have been a trader in our wonderful free markets for more than 30 years. Alex's basic points are unassailable. Business is competition, and price discovery comes from an accumulation of competitive bids.

Alex's negative experiences with brick-and-mortar dealers do not match mine. His, apparently, have been negative, and mine have been positive. There are personality issues at work here, but now we get into an endless labyrinth of innuendo and implicit agendas. I do not want to go there, because that would be a waste of time.

John Marks' essays about the issue are abstract, and a waste of time. They deal with hypotheticals. Our free markets do not trade hypotheticals. That is my perspective.

John Atkins, as usual, makes excellent points about stealing time and facilities under deceptive cover. This is a fine point, but a human one, and deserves consideration if you consider yourself to be human. One's "intentions" when one walks into a dealership are ambiguous at best. As a former salesman, I can tell you my job was to control the customer's intentions, because, often, the customer is the last one to know what he really wants. The salesman's job is to clarify that ambiguity and turn it into a sale. There are good customers and bad customers, and good salesmen and bad salesmen, but it is the salesman's job to make the sale. Period. As a point of reference, let me tell you that Ethan Winer is a lousy salesman. I suspect he is a wonderful person, but a lousy salesman. He argues too much. If you win an argument with a customer, you lose the sale. Losing the argument doesn't guarantee a sale, but it at least gives you a chance. Ethan, you need training. Just my opinion, as a former salesman.

The fact is, most high end establishments are cluttered with lousy salesmen. Alex is right about this. As a salesman, your job is to identify what the customer wants and help him make a decision. If the rest of our economy were beset by as lousy a group of salesmen as high end audio, we would be in the middle of the second Great Depression -- or an endless continuation of the First.

This is meant as a summary, not a critique. I think Alex's (implied and overt) points about business naivete, in the high end audio niche, are valid. Apparently, Alex never met a good salesman. I blame the salesmen, not Alex. If a salesman cannot get around price issues, he is a lousy salesman.

When I walk into an audio store, I want to be sold. I want a salesman to give me positive reasons to buy. If he doesn't, I am gone. Period. Now, personally, I would rather buy from a dealer. But I have had great success online AND with dealers. Great salesmen give you opportunities to negotiate. Personally, if I were selling audio gear at a dealer, I would be the best damned salesman in the house. I would sell the gear I love, and I would negotiate with the customer concerning the intangible benefits of dealing with me, as opposed to the problems concerning distance and impersonality associated with online purchases.

Last of all, anyone who would fight over 20 bucks or so on a $150 purchase deserves the ninth circle of audio hell.

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Our free markets do not trade hypotheticals.

Isn't this what we call the futures market?

Thought-provoking post, Clifton.

One point however, Alex has made clear his intention when entering the store of an audio dealer: he will audition products he is interested in while fully intending to go online to buy what he has learned that he likes through the audition.

It is this scienter that irks the majority.

I left out the primary premise, regarding my response to the gist of the entire thread -- the letter to Stereophile that created the controversy.

If Mr. Craggs is trying to make a living selling $160 headphones, he has no vision. If I own this store, this sort of gear comprises loss leaders. I'll take a $20 loss, apiece, on a hundred headphones. I'll lose the gambit and take the King. I'll lose the battle, on this trivia, and win the war. I'll run a damned promo, selling all these things at $20 under cost, just to fill the store. My own opinion, as a salesman and businessman, is that this is one of those phony letters that has nothing to do with reality.

I'll hold a sales meeting and authorize my salesmen to give away subscriptions to Stereophile, free CD's and SACD's, and headphones at cost. Look, I want a prospective client list of music lovers who are dissatisfied with their current home systems. Hell, why else are they out listening?? I'll sit at the front window and watch 'em drive up in their $30,000-$80,000 SUV's. And I'll figure out a polite way to remind 'em that, if they think $20,000 is too much for sound they want to stay home to listen to, then why in hell are they into the man 50 large for a fucking bucket of bolts that won't outperform a Vespa on a crowded street? If they drive up in a dented '86 Honda, I'll congratulate 'em on their sensible approach to money management. And THEN I'll find out if they are music lovers.

I'll spend $10,000 a year on symphony tickets, and, after qualifying the prospective customer, I'll give 'em away, on the condition that the guy come back tomorrow and hear the best I have. Or free dinner at a jazz club. Or live music of ANY sort.

If I own Blue Oasis, I'm not tryin' to crack a nut sellin' headphones and cryogenic AC plugs. I'm sellin' systems! I want these folks back in my store after their failed affairs with online gimcrackery. I don't want their damned $150. I want their $30,000. And, if I treat 'em right and make 'em feel right at home, I just might get it often enough to make a nice living, doing what I love and making other music lovers happy.

When somebody walks into your store, he or she is your honored guest, and the possibilities are endless. The only qualification is, "Do you love music"? If so, you are welcome, any time. If you want to buy a $150 set of cans online for $90, you can use MY computer. "And, by the way, I have a great sounding set of new speakers coming in next Wednesday...may I call you when they get set up?"

The principles expounded on over the course of this thread are valid. The original premise, that cracking your nut on $20 margins, is pure hokum.

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Alex's basic points are unassailable.

Eh, ... not so much!

Alex has continually stated his opinion that buying at anything more than internet prices when dealing with a brick and mortar shop is the equivalent of "subsidizing" the dealer. Does anyone else feel they are giving the dealer a "subsidy" when we pay for the dealer's services, physical establishment or knowledge/experience?

In this Country we subsidize grain and corn to keep prices low while allowing the farmer a living wage. We subsidize the oil industry and provide public land for their use in the hope of keeping prices low and supply high. We subsidize various types of energy discovery, production and distribution to the whole world along with its delivery and use for the benefit of both supplier and consumer - society as a whole. We are sending fuel to a country with one of the largest oil supplies in the world in an attempt to subsidize their way of life. We subsidize mortages and student loans in hopes of a rising tide lifting all boats. We subsidize housing, eating, getting sick and sometimes we subsidize getting well through the same ethical reasoning. We subsidize the medical and pharmaceutical industries in the hopes they will keep more of us alive than not. We subsidize living and we subsidize death. And we subsidize the transportation, automobile and highways industries that carry us along our path between birth and burial. We do this because we all gain from working together to add benefit to society as a whole.

As an individual we do not assign our specific monies to a subsidy and our money is provided even if we do not directly benefit from the use of the product or service being subsidized. As individuals we enter into a social contract which allows subsidies for the general benefit of society and often with the hopes of keeping prices low while adding benefits to both the supplier and the consumer.

This not what is taking place when Alex uses a dealer's facilities and monetary investment in order to determine what he should buy for a cheap price somewhere else. What Alex engages in in that instance is the free market without subsidies. There isn't a dealer out there who doesn't understand there are no subsidies for free loaders who abuse the basic contract between dealer and client, supplier and consumer. Every dealer realizes they are not automatically entitled to a sale, but every sale they loose to a dealer who doesn't have to asume the same burden of stock or services as a brick and mortar dealer is a loss that minimizes their ability to provide their stock and services to another client. Because customers such as Alex have chipped away at the structure of the free market to their own singular advantage, the dealer must sell to the next client and the next and the next at slightly higher prices in order to cover basic expenses. In the end, you and I subsidize Alex's purchases from an internet dealer by paying those higher prices at the brick and mortar dealership where Alex stole services. Alex has broken the contract of both the free market and subsidies since you and I get no additional value and prices are not lowered to us because of Alex's actions.

If Alex sees "subsidizing" a dealer so the dealer can then expand their goods and services to everyone, that would be one way to look at the transaction. That would be philanthropic and actually serve everyone who uses the dealer's establishment to broaden the scope of the dealer's reach into society in general - expanding the high end industry into a broader section of the community. Instead Alex wants the dealer to provide even more services so that he can take advantage of them without the additonal income provided by the free market contract. Obviously Alex is only intersted in a social contract that benefits one person - Alex. As such the other clients of the dealer are subsidizing Alex's system by keeping prices low and services high for his use.

I for one am not interested in subsidizing Alex's system. I will gladly pay for the services and knowledge I can find at a good dealer just as I will ultimately subsidize the electricity/housing/healthcare provided to disadvantaged families in need of assistance. But I have a problem paying for something someone else (Alex) used and simply did not pay for. That is the same as paying for the shoplifter's actions and we know how we all pay for what has been pilferred through higher prices passed on to those who respect the social contracts of the free market. Both situations of shoplifting, one goods/materials and the other services/experience, are immoral acts which pass an unnecessary burden onto the honest clientelle. Both are the actions of a thief.

We are at a point in our economy where the stress of providing for all the "me's" out in the world has placed an undue burden on almost everyone who plays by the rules. What Alex is proposing as "fair" for himself is not that far from the unscrupulous broker who lets the rules be bent just so he can get his commission no matter what happens to the client or society as a whole. It's all theft on a certain level and we all end up subsidizing their actions. The problem here results when there are no Federal bailouts for the high end audio industry. The larger implications of such actions are when there are no longer Federal bailouts for anyone. For too long have we been subsidizing the corrupt actions of those who only think of themself and we are now seeing the results of those poor investments.

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Personally, if I were selling audio gear at a dealer, I would be the best damned salesman in the house. I would sell the gear I love ...

Then you probably wouldn't be a very successful salesperson in a high end audio shop. That type of selling is not about getting the client to buy what you like but rather it's about allowing them to find what they love.

Okay. So I get why so many people are pissed off at AlexO. He's trying to quantify everything, like dealers are nothing more than "overhead tax," the amount that one pays the dealer, "subsidy." I think that's because at the core, AlexO's trying to impose a more contemporary market model (*cough* Walmart *cough* ) on an industry which isn't based on mass production and/or mass consumption.

To be fair, though, when I got to know more about the audio industry, too, it was bewildering & overwhelming to me, especially the kind of etiquette required to audition gear, and from whom to purchase. Boundaries seem very murky at times. I think this thread automatically assumes that the way the audio industry runs is very intuitively graspable to newcomers: it's not. In a way, what AlexO says will make more sense to a lot of people, about comparing prices, the ultimate buyer's choice, because that's really how it is in our completely Costco-ified world. But I think one of the things that helped me grasp why it runs the way it does is that I worked as a buyer for an independent bookstore for a couple of years. As many people know, in the era of Amazon-Costco-Barnes & Noble, every year is a financial peril for indie bookstores. If we were to survive, we couldn't give steep discounts on bestsellers. But we offered expertise (have you tried asking a bookseller at B&N about any book-related matter? : "Umm.. so how do you spell Hemingway again?") and specialized books which couldn't be bought at chain stores. Why did some people keep buying at our store? Out of loyalty, and out of love for books. I wouldn't ever say those customers ever "subsidized" us, nor would they. Sure, they were patrons of a kind, but they did it because they also wanted to purchase their books from where they knew the books weren't considered as margins to be cleared, but as literature.

This isn't a grandiose statement. It's really a fact. At each chain store, publishers pay a premium to control the most visible shelves. It's about statistics, as it invariably is when it comes to making money. What happens? You get dilution of quality. You can walk into any chain bookstore & find 30 different versions of the Da Vinci Code, but how many of them will stock novels by Thomas Bernhard? Not too many, aside from NYC, where there will be a scattered few who enjoy his books.

I don't think that indie bookstore model is too far from the audio industry. If we really did adhere to AlexO's model, I wonder what kind of gear we would see year in, year out. There would eventually be a massive stream-lining of products, which is inevitable, given the necessity of the bottom-line.

As for dealers, I've had good luck for the most part. I've had one really horrible experience. But recently, I went to an audio dealer with an intent to purchase my TT, went in for an audition. The salesperson was nice enough, but an esteemed reviewer of an audio journal walked in, and all the salespeople flocked to him, mine included. Sure I listened to a bit more music, and I prefer listening alone anyway. But he came back & it was clear that he didn't really want to spend time with me when this reviewer was outside. So I told him I was done, and I walked out.

Not every experience is like this, far from it. I still think of my first visit to a hi-fi audition, which was with Mike Nadler at Sound By Singer. He was so awesome. He let me listen, literally, for hours... so there are all kinds. I think vilifying a whole class of people based on few experiences is too reductive.

AlexO, your reasoning does make sense in a way - the competitive model, margins, etc. - but to me, it's like trying to apply the rules of baseball to cricket or something. It's a different game, mate.

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I view margins like this ...

Actually, I meant the part where you looked in the dealer's price book when he left the room. The part where you consider marking up a MSRP to 50 points as doubling the price of the item to you. That was a kicker in the last thread we did on how you abuse the system.

Eh, yourself. This is not about subsidies. It is about symbiosis. The salesman and the customer are joined at the hip. One's interest serves the other. The only difference, is that the customer can walk, while the salesman can't.

The quote you ripped out of context, about "the gear I love," ignores the general noun. I love all gear that is well made, reliable, and true to the source. "True to the source" limns out a HUGE arena, as has been argued about ad nauseam within the context of merely a thousand different threads on this forum.

The customer is always right. Unless he tells you he doesn't know what he wants. Then, you give him the benefit of your expertise and invite him to test it. There are many different ways of sending this message. The point of my screed about bad salesmanship running rampant in the world of high end audio is that MOST salesmen don't want to take the trouble of knowing the customer. If that didn't come through in your reading of my post, this ought to make it clear.

Actually, I was a damned good salesman. I earned a lot of repeat business. That is always the test. I learned how to listen.

"50-points" is dealer-speak for 100% mark up or margin. Yeah, it doesn't make sense, but that's how they talk about it. Both are "correct", but only use the former when talking to dealers and sales people.

Dave

Eh! right back at you. It is about "subsidies" when Alex makes it about such. That is Alex's point, not mine. Here is how Alex puts it;

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Once you scrape all the moralistic and self-righteous bullshit, you realize that the crux of the issue is whether or not we are willing to subsidize the dealers and whether the value the dealers provide is worth the extra 30-50% we pay in equipment purchases.

Some of you are quite willing to subsidize the dealers with your money. I am not. Hiding behind the holier than thou attitude in order to subsidize dealers with MY money, doesn't cut mustard with me.

He would prefer to turn the entire concept on its ear in both a business sense and a moral viewpoint to satsify his desire for a better system at the expense of the dealer and all of the dealer's clients and employees and their families plus the services they would provide to the economy with more money in their pocket. In the previous thread on dealer abuse he stated he feels he "deserves" a better system because the manufacturers and the dealers are in collusion to keep prices on the better components he wishes to own artifically high and out of his reach. He is not satisfied with what he can afford and so he shoplifts what he wants.

Clifton, you may have been a decent salesperson but your business plan doesn't read as if you ever owned and operated a business that started from stratch and ran on a shoestring. Go present your plan to give away thousands of dollars worth of product and freebies to any small high end dealership and then wait for the laughter to die. Go ask how many above-$150-headphones they sell in a month and how many they believe they would sell if the dropped the price $20 and took a loss doing so. Your apporach depends on virtually unlimited funds being available to a dealership. This just isn't how most shops operate.

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Clifton, you may have been a decent salesperson but your business plan doesn't read as if you ever owned and operated a business that started from stratch and ran on a shoestring. Go present your plan to give away thousands of dollars worth of product and freebies to any small high end dealership and then wait for the laughter to die. Go ask how many above-$150-headphones they sell in a month and how many they believe they would sell if the dropped the price $20 and took a loss doing so. Your apporach depends on virtually unlimited funds being available to a dealership. This just isn't how most shops operate.

You try to discredit Clifton's by saying it won't work on a shoestring. Well, hell yes it won't work on a shoestring, that's why you raise a bunch of capital before you start. Most small businesses fail because they fail to raise enough capital to compete.

Promotions and loss-leaders are part of retailing. If you don't have them in the budget, then you're probably up Sh*t Creek without a paddle. Clifton's approach is to make a big splash so that he'll be noticed right away and capitalize on that notice. Does he have a chance of failing? Sure, any plan can fail.

OTOH, a guy can eek his way into the business by carrying just a few good items, preferably in on consignment or with liberal terms, hiring no staff and doing it all himself, at least in the beginning. With luck, that can work. Selling out of the house keeps overhead low. There's at least an handful of people doing that in the Denver area and one or two seems successful.

Dave

Yeah, a Hi Fi network of home based dealers could be a cool thing.

They'd only need to stock one of each line and could "just in time" delivery set up with the manufacturer.

They could focus on one or two lines of each product type, and could market as a group for consumer awareness of that style of set up.

I think it's groovy, and I bet it's been tried.

I've tried looking for gear in Las Vegas and it seemed there may be an embryonic hint of this going on, but the local "dealers" never replied to emails or calls - I bet the logisitcs would be tough.

Even at that level, I bet they start undercapitalized.

Cool idea, though!

Yes Budha, it's actually happening to various degrees. These guys tend to carry either very esoteric stuff or relatively new stuff, not widely distributed. One guy, up in the mountains near here, must have a million dollars worth of stuff. Based on his house size and location, I'd say he doesn't need his audiophile money, but he's converted his hobby to a business, so he can deduct many costs and gets to try all kinds of exotic stuff, go to shows as a business expense and meet all kinds of people from all sides of this business. Of course, when he sells a $100,000 speaker system or a $20,000 CDP, then pay day is handsome. He keeps a national presence and might actually do pretty well.

Another guy has less than 10% of the "stuff" but tries to offer "value" components.

It's a tough way to make the mortgage payments, but it works really well at defraying the cost of getting very deep into a "hobby."

Dave

I think this topic has been beaten to death in other threads, but...

"How about this scenario, instead of bitching and moaning about the Internet, they can take a piece of the action by offering to install ANY product purchased ANYWHERE."

That's a good point, and I think if you want to charge more it does have to be an obvious reason for the consumer. But to me, a good demo (and I mean more than "here's the room dude, let me know what you think") will sell itself in value. Some items can be more expensive and loyalty will keep the customer, but you can't be too off the mark or it's just not worth it.

Let's put it this way- the shop gives you a half hour "demo" of merely pointing out the product and letting you play a few tracks. That's not really a good demo and not worth a whole lot of loyalty.

A good demo will educate you on the product, how it fits in with other items and help you make a truly informed decision. Basic installation will go a long way towards helping the customer feel he has someone on his side with his (likely) large purchase. Maybe this wouldn't apply to headphone, heheh. But still, the price probably shouldn't be more than 1-5% off from anywhere else regardless of what it is.

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You try to discredit Clifton's by saying it won't work on a shoestring. Well, hell yes it won't work on a shoestring, that's why you raise a bunch of capital before you start. Most small businesses fail because they fail to raise enough capital to compete.

Well, yes, that is the answer to the problem, isn't it? Have lots of ready cash. Why didn't I see it?! The idea of having $15k in inventory tied up in one model of expensive headphones that you will sell at a loss - Brilliant! Making a big splash by advertising in every media outlet to draw in the prospective buyer of one model of expensive headphones - Shear Geeeeeenius! Getting high end manufacturers to give you gear on consigment when you don't even have a shop or any staff - well, honestly, I just don't have words to describe that idea. Yep! No doubt about it, all you need is backers who will loan you a million bucks and you're on your way.

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Promotions and loss-leaders are part of retailing. If you don't have them in the budget, then you're probably up Sh*t Creek without a paddle. Clifton's approach is to make a big splash so that he'll be noticed right away and capitalize on that notice. Does he have a chance of failing? Sure, any plan can fail.

Look, I'm not discrediting anyone. But $150 headphones don't fly out the door even if you are selling them at a loss. Having that much money tied up in a product that will likely be discontinued before you run through your stock is not a good business plan for the average dealer. Needing to get yourself noticed by way of advertising you are selling expensive headphones is not in the business plan of most high end dealers. You are right about any plan's success, they could all fail. But why give your failure a kick start?

Most high end dealers are doing their job because they love the equipment, the music and the clientelle. Most high end dealers are not expecting to get rich and they don't start rich. Most start with an inheritance or a severance package. Boo-ray! for the guy with $1m in stock who doesn't need the job and gets to play at running a business. Unfortunately, he is not the average high end dealer. Most dealers I have known have entered the business because they wanted to be their own boss and they didn't want investors telling them how to run their business. The industry is littered with dealers and companies that ran into a dishonest investor and one person ended up with the burden of their dishonesty. Read the story of Dayton-Wright if you want a good example, http://www.dayton-wright.com/index.shtml. Too many dealers are not great business people because they are doing this for the enjoyment of the business rather than for the success of the cash flow. Mediocre business people and investors seldom see eye to eye. And then there are the issues of life. How many great business plans didn't count on having to buy toilet paper and light bulbs? How many great plans got waylaid by situations out of the control of the business owner?

Yes, there are all sorts of ways to do this business. Clifton's plan could work well, or not. It's a hypothetical now isn't it? And whether Clifton can turn a $15k inventory in a slow moving loss leader into a successful business plan will never be tested. That's why I suggested Clifton present his ideas to his favorite brick and mortar dealer for discussion. I'm certain most dealers would appreciate the business advice.

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Muahahahhahaha Now I'm a shoplifter?? I'm waiting in great anticipation for a time when you will give me the full credit I deserve and label me an axe murderer.

Im not in the job of making predictions, Alex. But dismissing any moral obligation to do the right thing because you feel the person you are stealing from is greedy and deserves what they get is the rationalisation of a shoplifter. Uh-huh! Yeah, it is!

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If I have to talk sales/dealer speak, I'm reducing my acceptable margins to 3%!

The problem here, Alex, is that viewpoint will turn the audio world into a 'top 40' world. Brittany Spears and 50 Cent audio equipment for everybody!

Is that what you want? Cuz the lack of foresight and understanding on your part is >exactly< where you would be heading us - if the world of audio was in your hands.

Think it through. Grow some depth (on this subject) to that brain of yours.

As they say, 'a little bit of knowledge is dangerous', and when it comes to the world of audio and how it works, that is right about where you sit right now.

However, in the 'big smoke', like NY, where you is...in the big cities, the audio business tend to be a bit, er, of a PITA. I don't like them either, to tell you the truth, but then again, the stores have put up with so many 'price shoppers', it's hard to tell the assholes from the real people any more. They are getting very tired and weary.

The shops in the smaller cities (2-300k population or less) are quite a bit more personable. In any business the owner's behaviours tend to be reflected in the staff, so make of that what you will.

Edit: After reading the 3 pages after my first post, I gotta say Alex, your moral compass is in need of repair. Not really a big thing here, but it is indicative of a deeper problem. Ie 'it's just business'. That line really gets me going. It's the kind of line that mercenaries use, fer crissakes.

I've seen 'business men' screw people out of their entire life savings using that line, in the end - as an excuse. Which, in the end, means that their moral compass is severely fucked. A very American line, and very, very NY. The rest of the world is learning it well, sadly. Oh well.

In the end.. if you do not tell the audio sales folks, up front, that you have every intention of price shopping, and will take the lowest price as your only point of interest..and proceed to waste their time auditioning, then yes, you are a thief of their resources and are..at that point..of low character. You are committing an outright act of purposeful fraud. Please don't do such things to yourself.

Although, on your side, you are in NY and did not start that whole audio and business saga that exists there, with respects to 'how it is done'..but you are reacting to it with your behaviour.

As stated, you'd be surprised in the smaller cities. The good audio shops can be downright fun.

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Let's be clear here, I do not enter into contract to buy when I enter the store. The store, the audition, the coffee and donuts are all designed to entice me into entering a contract. It's an invitation. Just like perusing a store. Given that most hifi shops have hardly any people there at any given point, you're bound to be assailed by a sales guy who wants to engage you in a conversation, so he can peg your financial stature and then try to steer you to whatever stuff he wants to move. That's the game he plays. I understand that and I accept it. I would much rather he didn't talk to me. I would much rather be able to walk in, turn on whatever I want to hear, and only interact with the sales person when I am ready to talk about price and buying. Alas, I have to contend with the sales pitch and so I do.

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Auditioning is part of the shopping process. You seem to be unable to differentiate between shopping and buying. One has to shop before one buys. You shop for products and then you shop for price. That's the best explanation I can give you. You try to saddle the shopping process with some sort of a moral baggage and it's just not there inherently.

I don't know why we have these conversations with someone so set in their ways that even when confronted with opposing logic in every reply to their "It's your fault and not mine" posts that one singular person who has no moral compass will never change their attitude. It's obvious you are unable to see beyond your nose to open yourself to the world others encounter on a daily basis.

"The store, the audition, the coffee and donuts are all designed to entice me into entering a contract." The "store" is designed to entice you into entering a contract?! You are kidding, right? If there were no store, you wouldn't even think about buying anything?

Alex, you have so distorted the entire process of commerce that you only see others as capable of misbehavior. Once again that is nothing more than the projection of the "afflicted" to rationalize their bad behavior. Theft is OK because they deserve what they get.

Point to be made; it's still theft. Even if the dealer is no better a person than you, it is still theft. Stealing from a thief is still stealing and anyone who doesn't understand why a thief should not be rewarded for their activities is on a long slide into the abyss.

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Given that most hifi shops have hardly any people there at any given point, you're bound to be assailed by a sales guy who wants to engage you in a conversation, so he can peg your financial stature and then try to steer you to whatever stuff he wants to move. That's the game he plays.

Then tell the sapesperson that up front. Don't play games when you are not willing to play by the rules. No salesperon wants to deal with an ass. They'll leave you alone, I promise. And don't tell me they won't. They will once you've made it clear what type of shopper you are.

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I would much rather he didn't talk to me. I would much rather be able to walk in, turn on whatever I want to hear, and only interact with the sales person when I am ready to talk about price and buying. Alas, I have to contend with the sales pitch and so I do.

Yes, I'm sure you would perfer no one observe your theft, you would like the entire game to be played by your rules of engagement. But, if you don't want the staff to talk to you, to look at you or to assist you in any way, then don't expect them to allow you to start playing with their stuff just because you want to use their facilties free of charge. You do not get to turn knobs and play with gear that doesn't belong to you. No car dealer would just leave the keys in the cars on the lot and expect you to test drive their vehicles without supervision. No retailer of any kind would simply open their doors and allow anyone and everyone to use and take what they desired hoping only that all people would operate on the honor system.

Let's say during the course of your unsupervised audition one of the components stopped working. Who's to blame? More importantly, who's going to cover the expense of the problem created while you were the only one in the room? The dealer? Because his system was set up in a manner expressly designed to "entice" you to damage it? It's very simple here, Alex, if the dealer doesn't know you have the ability to operate his components, he won't let you play with them without supervision. He can only establish that you have that experience by talking to you. I've allowed plenty of clients to sit and listen with the only prerequisite that I be the one to operate the equipment beyond simple changes. I did that becasue I had faith in the clients. If you don't want to get to the point where the dealer has that faith in you, then don't expect the game to go your way and your way only. You're in their establishment and rifling through the cabinets to find something to eat is poor manners and gets you ever closer to theft.

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I would much rather he didn't talk to me. I would much rather be able to walk in, turn on whatever I want to hear, and only interact with the sales person when I am ready to talk about price and buying. Alas, I have to contend with the sales pitch and so I do.

You are harping on this audition process as if that were all there is to the issue. The point is you are entitled to shop without obligation to buy. No one disputes that and that is the reason for the audition process. What you just aren't getting your head around is that idea that after you have used the facilities of the dealer, the one who has the equipment you wish to purchase has a right to your business. And that right is more than just meeting the price - within a few percentage points - of some on line dealer who has no investment in you, in the community or the product you are buying. By dealing fairly with a local dealer you are supporting everyone in your community. YadaYadaYada - to go on with this is foolish. You don't get the point and never will because you don't want to. You are a shoplifter and you wish to remain a shoplifter because you are committing an act for which there is no legal prosecution. That you dimiss the morals of the act from any larger consequences is your way of ignoring what you are doing and placing the blame on others. Whatever else you are in your life, Alex, in this regard you are scum. You've been told so repeatedly and you ignore the fact with the same ferocity dup employs in his posts.

What you are doing is morally objectionable even if you cannot be prosecuted in a legal manner. You refuse to see it because it benefits you and only you. To deny it further after all the comments to the contrary is evidence of deeper problems. You've been told that on a number of ocassions. Yes, you might be an axe murder. Though those crimes are typically not so thoroughly planned out and justified in advance.

You are a poor example of a member of your community as far as I'm concerned and after all the posts you and I have had on this matter and all the posts informing you of just how poorly you conduct yourself, there's nothing more to say to someone who is so totally in this only for themself.

AlexO, I still love ya, ya useless piece of audio detritis.

I think this is maybe the only issue you and I disagree on, so i will stop with...

Cheers, man.

Actually, since your name is Alex...

How about a scarlet letter...

That way, Hi Fi shop staff can identify you right away.

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Jan,

Ok, so now we all agree. I'm a thief, a shoplifter, an axe murder, scum, a morally deprived malaise and just a general piece of dried up stinky pooh. Ok, I got it. I understand, and I wear these labels with pride like a red badge of courage.

That's unfortunate. This myth that criminals have pride in their work is just that - a myth. Even in Bizarro World, a crook is still a crook and it was the shortsighted vision of the planet Krypton's elders that doomed it to destruction. The answer for you is to have Kal-El fly you to a spot just South of the Fortress of Solitude where you can consider your past actions.

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I'll add "crook" to my nomenclature and I shall join a monastery to ponder my past, present and future sins.

Just be sure that when you go to tour the monastaries, you let them know you'll be comparing their offer to interent monastary prices and will choose the lowest priced option.

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I think this horse is only sleeping or pretending to be dead.

Give it a few more whacks.

I was thinking at this point that AlexO and I were just goofing off.

No actual content was intended in those posts. Mostly joking with AlexO about the disposition of the thread.

Jan, that's out of line. There is a HUGE area between "shoplifter" and "careful shopper." HUGE. Ordinarily, I would assume you are joking, but having seen your spleen, lately, I just don't know. There are no verbal markers that suggest you are joking.

As for your point about carrying $15,000 worth of headphone inventory, I can only say this -- what a dumb way to run a (supposedly) high-end audio shop.

Implicit behind Alex O's objections (and mine) are the imperious assumptions of the typical high-end dealer. "I am an expert." "I know what great sound is, and you don't." "You can't listen in my store unless you listen to my lectures about why my gear is better than everybody else's." And I could go on.

The best dealers I have shopped have been the least talkative, not the most. I expect to be qualified. I expect to be asked how much, approximately, I can afford to spend. But, as Alex noted a few posts ago, I ALSO expect to be left alone to listen for myself. The best dealers always seem to have a sense for this. They say, "okay, I'll leave you alone for awhile to listen -- let me know if you have any questions." Then they leave you alone. And you know you can ask questions, because they'll give you the short answer and leave you alone again.

I takes some start-up money to run such a shop. Granted. If you think you can go into debt with a pre-determined inventory, then TELL the customer what to buy, because you are the superior person in the room, then you have it backwards. A new shop needs time and traffic, and salespeople who know when to leave you alone. Apparently, this is not your experience.

The "shoplifting" label is a cheap shot. You ought to apologize to Alex, whether you agree with me or not.

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I was thinking at this point that AlexO and I were just goofing off.

And cleverly, too!

I particularly liked "internet monastery prices".

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As for your point about carrying $15,000 worth of headphone inventory, I can only say this -- what a dumb way to run a (supposedly) high-end audio shop.

Uh ... uh ... yeah, it is.

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I takes some start-up money to run such a shop. Granted. If you think you can go into debt with a pre-determined inventory, then TELL the customer what to buy, because you are the superior person in the room, then you have it backwards. A new shop needs time and traffic, and salespeople who know when to leave you alone. Apparently, this is not your experience.

Sorry, I don't get your point. You think I said what?

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Jan, that's out of line. There is a HUGE area between "shoplifter" and "careful shopper." HUGE. Ordinarily, I would assume you are joking, but having seen your spleen, lately, I just don't know. There are no verbal markers that suggest you are joking.

No, I'm not joking and Alex does not deserve an apology. I know what a "careful shopper" is and I know what a shoplifter is. Alex and I have been through all of this before. There's quite a bit that hasn't been covered in this thread that came out in our last go'round. Even if I had never set foot on the salesfloor, I would still find Alex's attitude towards dealers and business in general to be offensive. Alex's viewpoint on the value of a dealer is distorted by a lack of moral clarity and this is not unlike that of a shoplifter. That he feels the greedy dealer is getting what they deserve is pretty much how the shoplifter starts off whether its pilferring candy bars or something larger. The fact he cannot be prosecuted for his actions does not make them any more justifiable than the actions of a shoplifter.

If you feel he is right to take advantage of dealers simply because you've run into shops which have not treated you as you wished to be treated, then I suggest you also rethink how you go about business. Screwing someone because they were arrogant is justified how? I've been frustrated by numerous retailers and service providers and I just don't give them my money. That plan has worked for me. But then I don't go into a shop with a chip on my shoulder.

I would love to think all high end dealers are just terrific people who employ bright, enthusiastic sales staff who are trained to always treat the clientelle with respect. I know that's not the case, I've worked for my share of holes. And I know sometimes you hit a dealer on just the wrong day or even just the wrong hour. And sometimes they find you at just the wrong time. I also know we are all human and problems arise. This ain't no fairy tale. You can choose to live by Karmic justice and feel confident the bad guys will get what they deserve sooner or later. You can choose to take it out on your dog and your friends when you are treated with a lack of respect. What you cannot do is decide to make Karmic justice occur at your discretion and turn it to your financial advantage. That's still immoral. What you should not do is forget the salespeople also have a life and they deserve some respect also. That's just treating others the way you would like to be treated.

What Alex wants from all of this is a one sided contract where he wins everything and the dealer always looses as much as possible. I'm not the only one who has told him he has no morals and he finds that to be a badge of honor. MyGod man, I don't hang out with anyone who would think that is a compliment.

My statement stands. IMO Alex is the equivalent of a thief who cannot be prosecuted.

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Your Moral holiness, allow me to plead my case by stating that shoplifting is a crime. Since I cannot be prosecuted, I assume means that I haven't committed a crime. Hence, I'm not shoplifting.

That's the second time on this thread the idea has been floated that only those who face legal prosecution can be responsible for what amounts to criminal acitivity. How did we get to this point?

If my neighbor willingly allows his/her property to become so run down and dangerously in need of repair, so full of vermin and parasites that his property both threatens my own and lowers the value of my property, has he not taken money out of my pocket without my permission? What do you call someone who takes what is not theirs without the permission of the rightful owner? My neighbor cannot face legal prosecution for his inaction but from the perspective of my bank account he is just as much a thief as if he entered my home and took the money I must now use to protect myself from his critters and fire danger or the lost property value I am burdened with. Where's the crime? Still, he affects me just as much as someone who takes something not theirs affects the real owner.

I am hardly a libertarian who feels we should all be left to our own devices at all times. Nor am I someone who wants to see another group's values forced upon everyone without their consent. I am, however, someone who believes we all come into this society with an understood agreement to improve the life of everyone involved. If we do not wish to agree to that contract, we cannot willfully withdraw from the structure of the system without affecting those who remain. There are alternatives provided for those who do not wish to become active members of society and that small group of people should not be so self centered as to ignore those choices. That seems to me to be the point of "The Tragedy of The Commons". That Alex gnashed his teeth at the column tells me everything I need to know about Alex. As others have said, that Alex can so blithely dismiss and rationalize away any and all moral responsibility to anyone outside himself provides all the information I need about Alex.

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That's the second time on this thread the idea has been floated that only those who face legal prosecution can be responsible for what amounts to criminal acitivity. How did we get to this point?

By employing squishy terminology. A crime is, by definition, an act punishable by law; if there is no law prohibiting the activity it is not a crime.

The conversation would be much more clear if references to crime, analogies to crime and the like were no longer used.

Your point however is that you believe Alex's acts are morally reprehensible, even if not criminal; they violate a moral code, but not a criminal code.

I think of Alex's actions as breach of a social contract. We all know the agreement we voluntarily enter into when we use the services of a stocking dealer to audition equipment. Most of us abide by this social contract. Alex chooses not to.