Anyone still using dealers?

There's a simple answer to that. Don't buy American equipment. It's not like we're compelled to after all. There is plenty of British and European kit that is more than a match for anything the Americans can produce.

 

But thats the point - many people who do want to buy US stuff are not buying it from UK dealers - tending to import, change voltage, pay import duties and still save a huge lump. UK dealers ought to be getting some of this action dont you think?

 

Well I'm just sitting waiting till the interest rates go up another 3 or 4% and Hi-fi drops down several pegs on peoples list of priorities.

Some bargains to be had. Maybe.

 

Yes, but why bother with all that hassle when you can still do better buying British or (less so) European kit.

And as for the argument about letting British dealers have a slice of the action, well what about the British manufacturers? Don't they deserve our custom too?

I think Tony and I proved quite nicely yesterday that British kit is well up to the task!

 

Maybe, but why restrict your choice of gear to your local market?

And there are some things you can't get easily from a UK/European manufacturer. Say you wanted a decent PWM power amp - something like a BelCanto? I'm pretty sure there's nothing like it in the UK or Europe

I do think it's pretty outrageous (esp. with the current level of the US dollar) that US kit is sold in dealers in Europe at a price of almost double what it's sold at in the US :inferno:

VAT and import duty should add no more than 22%. Given that the dealers buy the kit from the US for much less than the US retail price there really is no excuse for a price hike of even 22% as the 22% they pay is on a much smaller value to start with.

Michael.

 

Typical UK dealer margins are 40% - net of VAT!

I agree that the retailers in general are simply not realigning their business models to take into account the global market that the internet offers the enthusiast nowadays.

The truth is, many dealers are still living in the age when if you wanted to buy a product, you HAD to buy it through them. They could simply sit on their arses waiting for the latest edition of HiFi Plug to come out and wait for the customers to trundle in holding their cash. This is particularly the case with many Linn/Naim dealerships.

I don't wish anyone hardship, but the sooner they HAVE to change to save their livelihoods the better for the consumer. Speaking with one particular manufacturer, his anger at the dealer network was clear. I quote " look at it. Any idiot could tell you that it isn't worth £8K. But with the bloody dealer network holding us to ransom and demanding 50% even without stocking it, that's whatsome poor buggers have to pay!"

The supermarkets have too much influence on your food prices - the dealerships need true competition from other outlets to protect the consumer.

Why should a shopkeeper get £4K of my hard earned money simply because I have to order something I want through him?

 

Merlin you have summed it up nicely IMO

 

Michael,

Dealers & distributors here in Lawrieville have been marking down their prices considerably to reflect the strength of the EUR vs USD, internet shopping, hifi brokers (who are now springing up all over the place) and the slow market in order to tempt customers back into their showrooms. On direct questioning, two dealer/distributors told me it was now cheaper for them to buy goods from the U.S due to the stronger Euro so they felt they ought to reflect those savings in the prices they charged their customers. In fact, even as I type this post, the EUR is launching an all-out assault on the USD on the screens in front of me. So those dealers etc charging double the U.S. prices are clearly taking everything they can get. Scallywags!! (I like that word.)

I have purchased some equipment through hifi brokers and other contacts in the business and the fact that these guys can make a profit by selling brand new gear at second hand prices shows you how much mark-up is involved in this game especially when buying from dealers many of whom don't know the meaning of the words, "customer service".




Enjoy the music,

Lawrie.

 

If your manufacturer friend felt so hamstrung by the UK dealer network then there is a simple remedy. Sell direct.

When put in such black and white terms you soon find that many manufacturers don't have the resources neccessary to set up in direct sales. In short, love it or loath it, they need the dealers to give them enough sales volume to sustain their businesses.

Delving deeper in to your friends business example, I fear there is something very wrong with their business model if they have to offer the dealer 50% without a commitment to hold stock. The only rational reason for this approach would be a new product attempting to break into the market or some ultra-exotic low demand product.

I do think dealers have to evolve, but just because products are available from all over the world it doesn't mean that a dealer has to automatically cut their margins.

Good open minded dealers take the time (and spend the money) to investigate new products instead of relying on stalwart brands to the exclusion of all else. This puts them in a stronger position to negotiate with existing suppliers. Ultimately this leads to a improved industry through a sort of Darwinian selection-of-the-fittest process. That's good for everyone, because the emphasis remains on quality not just price.

Hex

 

Ah - if only it were so simple. You see products sadly sell on the strength of reviews. Reviews appear in monthly publications. Monthly publications rely on their advertisers for revenue. 50% of their revenue comes from dealers. Recommend direct sales and you risk losing this revenue.

The hifi industry is possibly the most incestuous I have come across.

Very very few! And then again only those without access to the top accounts. Ask them if they could choose between offering untried product and an account with say AS and the business men will find it a no brainer. They may well take on a new brand if it is represented in the UK by an old mate from said stalwart brand, and even then, only on highly favourable terms that can be crippling to a start up business.

 

I agree that reviews lead the sheep, for the rest of us they simply help produce a shortlist of likely candidates for audition. With a direct sales model then good reviews are essential if you want to move from selling the ones and twos of a niche manufacturer to the volume sales of a major player.

Going 'direct' should give more money for advertising and promotion. You can afford to take out half page or full page ads, run some prize giveaways and do all the things that mags love. It won't risk your chance of getting a positive review as long as the kit is good. What will change is the distribution of your exposure in print. Supporting a dealer network you may get half a dozen mentions in the dealer ads compared to a half page on your own. The question is, Which method leaves the best impression with the consumer?

Not sure who you mean by AS, but agree that the dealer network is very conservative in the main. I'm luck that I have several exceptionally good dealers in my area. They actually listen to new products and will go out on a limb if the believe something is genuinely better. For those independant middle-field dealers it's more a case of 'don't rock the boat'. They're the ones whose future looks cloudy. IMO the multiple franchises are relatively safe, despite them being very risk averse. Buying power and higher advertising spend means they'll always have a share of the mid-Fi market and move to new trends once they are established e.g. Sevenoaks and Home Cinema.

So the conclusion is that manufacturers still need the retail channel along with its margin expectation if the industry is to survive. Otherwise we could be looking at the death of the independants, the rise of direct sales and customers paying a whole shed load of cash in postage fees to return goods they've had on home demo.

Hex