The Tragedy of the Commons Letters

The letter that triggered the column, from March 2002 (Vol.25 No.3):

Sensible shopping?

Editor: John Marks was so right, in "The Fifth Element" in January (pp.55-59), that there is a lot of unfair competition out there. As a small distributor of pro and home audio products in "little" Austria, I have more than once had to feel that kind of storm. I adhere to a philosophy of strict and absolute service to the customer: Never in eight years have I taken one schilling for any repair or service for products distributed by me; everybody is offered free listening in his own system (including me advising and offering any help necessary); and if there comes any incompatibility with newer products after the purchase, there I am to help, without any hesitations or costs for solving the problems.

And what is happening? Customers surfing the Web find distributors in bigger countries with prices that, at most, pay for postage and phone service—I am speaking of 10% gross margins here—and, without any home trial or any after-sales services, they buy. If that weren't enough, they also call me or my dealers to tell them how proud they are, after having taken all from me that is possible in system matching and trial—and even denoising their systems—to have been able to find "our" products cheaper out there. And guess what—years later, they are not even ashamed to ask me to take back the now-used products when they think they'd like to buy something new.

Oh God, sometimes I doubt that a big proportion of our so-very-esteemed customers really deserve all our service and efforts!—Hans Hirner,

More letters in response appeared in the May 2002 issue (Vol.25 No.5):

Memo to audio stores

Editor: In reference to John Marks' "As We See It" in March, high-end audio companies need to take a good look in the mirror. Their products are grossly overpriced, which is why consumers such as myself will go to great lengths to find the best deal. Yes, the Internet has certainly made it possible to buy great name-brand gear for less than retail prices. Sorry, guys, but that is what competition is all about.

Memo to high-end stereo store owners: The next time I am in your store, please treat me with some respect—even though I haven't pulled up in a BMW. There has to be a middle ground: I know I'm not going to get a product at the store's cost, but I am not going to pay the suggested retail price either. Don't look at me with disgust when I try to negotiate a better price. I am not a millionaire, and I do have a budget. Earn my business. I might not buy something now, but if you're respectful, informative, and flexible, I will probably be back.

Finally, everyone should turn to p.126 of the March Stereophile, where a dealer is advertising huge savings on Krell and NHT. The advertisement also mentions five-year warranties, the products are factory-sealed, shippable anywhere (meaning you don't have to pay sales tax), and the advertiser is also an authorized Krell dealer. How could my local Krell dealer compete with this? I guess the real question is, if you stand behind John Marks' "As We See It," why would you allow this advertisement to run in your magazine? The answer is the almighty dollar.—John McCarty,

Times have changed

Editor: The March issue's "As We See It" presented me with an irresistible opportunity to get on my soapbox. Over the years, Stereophile has been on both sides of this issue. When business is slow, consumers are chastised to not waste dealers' time or expect discounts. When business is booming, dealers are warned to not abuse their customers in search of short-term profits, for it is the long-term customers who will sustain their business over time.

Only two weeks ago, I was politely denied my request to audition the latest version of a popular speaker. My initial response was to simply stop going to the store. After being an audiophile for 20 years, I can get anything want from just about any source. But I decided to give the store the benefit of the doubt. I went back midweek in the daytime, so that any claim that they were too busy would not fly. A new salesman allowed me to listen to the speakers. I was not wowed by my initial listening session, but I decided the speaker had promise.

The owner was there—a guy I had known for almost 20 years. I purchased equipment from him out of his house. I watched him rise to be the larger dealer in my area. Anyway, on seeing me discussing the speaker with the salesman, he made some crack (and not for the first time) about how long it had been since I had made a purchase. I left the store unsure what I was going to do.

The fact of the matter is that times have changed. As much I would like them to be the same, they are never coming back. Audiophiles who were once the backbone of the audio business are frowned on, because we want to listen to all different kinds of components and borrow them for in-home evaluation. The store owner wants to make a quick sale with the minimum fuss and bother. Looking to maximize his profit margin, he much prefers the audiophile virgin who will accept his advice as gospel. It is no wonder, then, that consumers feel no loyalty and seek the lowest possible price.

I have the solution. Let the store owners charge a nominal fee for audiophiles to audition the equipment. This fee would be refundable on purchase of the item. No loyalty need be involved by either party. The consumer could then negotiate the best price and the owner could seek to maximize his profit.

Better yet, let's do away with dealers altogether. When I attended the Home Entertainment 2001 show in New York, I evaluated every hot product on the market, with no disapproving stares or impatient foot-tapping from rude salespeople. We could just have a series of hi-fi shows across the country, and if you wanted to buy something, you could get it off the Internet.—Reginald G. Addison, Forestville, MD,

Getting what you pay for?

Editor: I agree wholeheartedly with what John Marks wrote in his January "The Fifth Element" (p.55). I often witness such behavior in my retail audio shop, from the "I know somebody who can get it for me wholesale" to the occasional "Are you crazy?" Most people equate "value" with a dollar sign, but the great dichotomy comes from the fact that these very same people are the first to agree that "You get what you pay for."—Peter W. VanRosendael, Tacoma, WA,

Paying for what you get?

Editor: The March issue's "As We See It" was written by either a shortsighted person or by someone with no sight at all. While I agree that abusing full-service vendors to evaluate and buy from someone else is prevalent in the High End, the demise of many vendors and dealers is not due to this practice, but to the greed that drives the audio business. I also think John Marks has no idea of the law in the US. Prices are driven by the market, and when Mr. Marks talks of manufacturers restricting discounting of their equipment, he is talking about price-fixing.

Think for a second: When was the last time you bought a Mercedes or Porsche from the highest-priced auto dealer, because he was the one you went to for a test drive? It's only in the High End that dealers have the audacity to tell me that I need to deserve to be their customer. High-enders treat their customers in a manner that they themselves would not like to be treated. I know it, as I have been in high-end audio for 28 years. The entire market is product-focused, as compared to a customer orientation.

There is only one way for full-service dealers to hold on to their audience: provide value. I buy all my equipment from my local dealer, with whom I have had a great relationship for over 10 years. He treats me with dignity, as an individual, and gives me a fair deal. He is not the cheapest provider for my hardware; however, he is not trying to recover the 100% markup from me either. In turn, I have sent him many new customers with whom he has made friends. Now, that's the way to be successful and grow the business.—Yogi Saxena,

Too much protesting?

Editor: Methinks John Marks ("As We See It," March 2002) doth protest too much! And the Austrian distributor, too ("Sensible shopping?," March, p.12). Moments after reading of abuses by customers who waste retailers' resources and then shop online for a discount, I turned the page to read Michael Fremer writing about purchasing a vinyl steam-cleaner online, presumably at a discount from retail in his home town.

It is certainly lamentable that a customer would take advantage of a store's services, then give the sale to a discounter, but face it—nobody shops at full retail all the time. Middle-America small-town retail has been decimated by our shopping-mall way of life.

Unless you have never been to a mall, never asked for a discount on a car, never bought low-price insurance, or eaten fast food, you can't complain about insensitive consumers who look for price instead of service. (Not that I would ever do it!)—Kevin H. Park, N. Hollywood, CA,

Mr. Park, and quite a few others who sent similar letters, have all missed my point. I have no problem with capitalism or a free market. But neither capitalism nor a free market can substitute for human connectedness or social justice. And neither capitalism nor a free market can justify using other peoples' resources under false pretenses.

Acquiring synergistic high-end audio components is more analogous to decorating a home than it is to buying toilet paper. Toilet paper is a fungible commodity. High-end audio products are not. By all means, shop for the lowest price on nationally advertised toilet paper. (While I do not have the time or space to address the issue, I am fully aware of contentions that the retailers selling toilet paper at the lowest prices are engaging in predatory pricing, and take more out of a community and give back less than the locally owned merchants they displace.)

The behavior Herr Hirner and I deplored in March is not "shopping for best price." It is taking unfair advantage of the time people have invested to develop their expertise as dealers and consultants, and of the money they have invested to provide products for display and evaluation, and then exploiting those resources to shop elsewhere, and only on the basis of price.

What if you were to go to a neighborhood hardware store and ask a clerk to explain to you how to replace a plumbing fixture, and he spent 15 minutes coaching you, and you then said, "Hey that's great, I will now go see if I can get the parts I need cheaper elsewhere"?

What if you went to a local guitar store, tried out all their guitars, asked a clerk about string gauges, etc., for your style of playing, and then went home and shopped online?

What if you went to a local garage and had a master mechanic spend time to diagnose what was wrong with your car, and it turned out to be a fairly easy parts swap, so you then went to a discount place for the parts?

None of these are about "being a smart shopper." All of them are about being selfish and exploitative. They also deny one the feeling of being genuinely connected to other people on a basis other than "What's in it for me?" and lowest price. Happiness is extremely elusive, when it is a goal. Happiness is often nothing other than a side effect of doing what is right under the circumstances.

A true high-end audio store is, in a sense, distinctive not for the products it sells but for the products it doesn't sell. I am not speaking about snobbery or classism. I am speaking about sifting the wheat from the chaff, spending the dozens of hours to become intimately familiar with products, and deciding which ones do the best job. Product selection is work. Developing system synergy is work. Matching systems to room acoustics is work. And as I wrote in my January column, the laborer is worth his or her hire. Can I hear an "Amen"?

You can shop anywhere for toilet paper. But to know what a BAT or Plinius or Harbeth or Wilson Benesch product sounds like, you almost certainly will have to take advantage of an authorized dealer's commitment, investment, and expertise. Exploiting those resources in bad faith is, at the end of the day, exploiting people.

I know how I want to be remembered, and having "he was a smart shopper" carved on my gravestone just doesn't cut it for me. You can use things and love people, or you can love things and use people. It's your choice.John Marks