UK audio dealers' pricing policy

Hi All,

Do high-end audio dealers set their prices freely or are retail prices set by manufacturers or importers? In other words, if I find something I like in the £2500-£5000 range, is there some room for a little bargaining, and if so, do I stand a chance if I deal by e-mail or do I have to be in the store in person?

Thanks

 

I think they have an RRP price set by the manfacturer but the dealers usualy have high profit margins they are working with. So if they get 20% on a £1000 sale they may be willing to knock £100 off the price because they still make £100 profit on it.

Items from say Henley Designs which have a low profit margin will often be very hard to bargain with.

 

Please could you be more specific because the simple answer to your query is 'it depends'.

It depends principally on the product you're after. For example, getting a discount on Naim will be nigh on impossible. If it's Quad you're after, I know a man who'll more than likely give you a sizeable discount.

Am I right in thinking that you'll be having it shipped to France? That may make things easier for you to buy at trade prices from the UK manufacturer/distributor if there are no French dealers.

reg

:Quad:

 

Jeez, I would be amazed if dealers were working on only a 20% gross margin, then to give half of it away, after wrestling a grand from someone ?

I would have thought that the margin would be more like 75% to 100%, which may sound a lot, but don't forget that's a GROSS margin.

From that comes rent, rates, staff, electricity etc.etc..

From my experience in other industries, if you ended up with a 20% NETT margin you would be doing very well.

 

Anopax,

Well, I'm scouting for speakers at the moment. Either there are no dealers, or dealers who can't show or demo anything, or dealers with prices 20 to 30% higher than in the UK.

Following some inquiries I made by e-mail for PMC speakers (this is only one example), one UK dealer said he would not ship to France, and another one said he would. Won't say more.

So apparently there is some hope for a little discount.

Here for example, although the US dollar / Euro exchange rate is extremely favorable, prices of US-made high end have not dropped a bit ... and dealers won't move an inch.

 

I have often found that shops, not just hifi, are more willing to give a discount in kind. Buy new speakers and get the cable cheap or free. There is nothing like flashing the cash as its costs shops money to accept credit cards. It is also worth timing your purchase to when shop sales are tradionally lower, they need cash flow at these times. However, this is more likely to apply to stock goods rather than orders.

Rod

 

My post crossed your last one. If you are interested in PMC, give these a ring. They are usually able to discount. Don't know if they will ship to France.

http://www.digi-box.co.uk/Aboutus.aspx

Rod

 

Thanks Rod, will do

 

IMO rrp should be abolished, and dealers set their own prices.
Pricing is meant to be set by supply and demand, not by some arbitrary fixing based upon projected profit in rip off britain. Looking at the colossal supply in large shops there is massive oversupply so goods should be getting given away, as usual tho' we are getting robbed.

 

I agree. However, when it comes to luxury goods, and high-end audio does qualify, doesn't it, the price is also a matter of what the customer is ready to spend for the sake of sheer pleasure or status ...

 

nuits st georges?
petrus
or plonk

 

Dealer margins are generally about 40% in the UK and are often 50% in the USA. These are more correctly called 'Gross Margin % of Sales Price' (GM%). Wflem007, when you talk of figures of 75%-100%, you're describing 'Mark-up' not GM%.

Margin (or 'Gross Margin' or 'Gross Profit') = Sales Price - Cost Price (ignoring VAT)

and GM% = Margin/Sales Price x 100

So a 40% GM% means that the dealer makes £400 on a £1,000 product. However, as wflem007 said, they have to pay all of their overheads out of their margins.

A crucial equation for running a dealership (or any business) is:

Breakeven Point = Overheads / GM%

So, if their overheads are too high or their GM% is too low, they have to sell a lot of stuff to keep in business.

And, Sir Galahad, the answer to your question is that whether you buy by email, on the web, by telephone or in person, ALWAYS make an offer. Nothing ventured nothing gained and the chances that the dealer will say: "No, you've insulted me now and I won't take your order at any price" are ZERO.

Amazingtrade, Henley Designs sell items with low profit margins? :ffrc:

 

Talking of luxury goods...
Well, Nuits St Georges from time to time
Petrus, never, so far
I do not know what plonk is
And I mostly drink Languedoc, Loire and RhÃ'ne, plus new world stuff from time to time.

Thanks 7_V for the advice. I shall try the trick. Lived in the tropics for many years and used it all the time, but it just does not work here at all

Cheers

 

Steve

I stand corrected

 

All it normaly takes is "is that the best price you can do?".

 

Some will,and some won't,but when you start to walk towards the door,most will open some sort of negotiations,especially if a high value sale looks like disappearing.