Is asking for discount pricing disgraceful?

J

Joe P

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"I find the whole hunt for discount pricing disgraceful. It ruins business, and customers are often being unreasonable. If you don't want to afford the gear at the reasonable fullprice, then don't think about buying the darn thing."

This quote is from a post by Al M over on WBF:

My experience with Lampizator - Page 11

He goes on to say:

"In fact, in my last purchase of an item I corrected a too low asking price that was offered me by mistake. It's just common decency. And if someone here thinks I am silly for trying to be honest then he's a jerk."

So, what do you folks think, is it disgraceful to try and get discount pricing?
 
Once you develop a relationship with your dealer, it's between you and them. If I got a better price on something, I certainly don't expect the same service as a retail price purchase.
 
There's nothing wrong with asking for a discount. Demanding and/or expecting one however, is a touch crass.
 
It's a 2 way street. I've seen retailers rape & I've seen low-ballers absolutely insult. It's a buy & sell market so we buy & sell for the better of our bank accounts. The retailer wants his profit & has no qualms about putting his bonus on the price whether it's 1c or $10,000, so, why can't the purchaser ask for the same conditions. Yes or no isn't hard.
 
jap.......I say be your own boss. Who cares what Al M or any other forum member over at WBF thinks about how a transaction should take place. He is free to behave as he sees fit and so are you. I always try to negotiate the best price I can whenever I make a purchase whether it's audio gear, automobiles, furniture, lawn equipment, services, or whatever. Am I always successful? Not always, but more often than not I manage to make purchases at a price that's less than full retail. You are always free to walk away from any purchase that doesn't please you. Of course a dealer is also free to refuse any offer that doesn't satisfy his requirements. It is definitely a two way street.

It is not disgraceful to save money and you should not be embarrassed to exercise your purchasing power in a manner beneficial to your assets. You can be certain there are plenty of price negotiations taking place between manufacturers and suppliers when raw materials, hard parts, and accessories are purchased to make their end product. There are negotiations between manufacturers and shippers for the lowest rates possible to get their products to retailers, and there are negotiations between retailers, distributors, and manufacturers for discounts. The manufacturers suggested retail price (MSRP) is a starting point and not necessarily an absolute when it comes to closing a deal. The key word is "suggested" retail price. I will take advantage of every discount opportunity available when I am shopping and so should you.
 
I have a unique perspective on this question. I was a consumer of high end audio equipment for over 35 years before becoming a dealer. To say that I was previously unaware (ignorant?) of the trials and tribulations of being a dealer would be an understatement.

Sitting on the other side of the desk gives one a unique perspective. I had previously assumed it was no big deal to ask, and certainly no big deal to get a nice discount. I mean, something is better than nothing, right? If we assume for a moment that the standard industry markup is X%, then asking for Y% should be no big deal. As an example, 30% and ask for 20% off. The dealer is still making 10%, so who cares? Again, something is better than nothing? Well….not so fast….

From the dealers perspective, they have invested tens of thousands if not hundreds of thousands of dollars in OBTAINING brands. You don’t think you can just call up good old McIntosh or ARC or whomever and say, “hey, I’m a nice guy, can I sell your product?” HA! What if you were to learn that the dealer must first get the OK from the manufacturer by going through an extensive background check, then second, buy at least $50,000 of “demo” gear (read: not to be sold for X number of years)? How many 10% deals must the dealer make to pay back that initial investment in the line?

Next, what about keeping a manufacturer? Do you think you just do the one buy in of $50,000 and everything is honky dory after that? HA! Think again. When manufacturers come out with new products, they EXPECT/INSIST/STRONGLY ENCOURAGE a dealer to buy that new product as a DEMO too! So the $50,000 easily turns into $100,000 over a number of years.

Next, let’s talk about customer support. If the dealer sells a product which requires a little more hand holding like a Devialet or a Lumin, do you think 10% is going to cover his/her time? It is not uncommon for me to be on the phone with a customer for 8, 10 or more hours over the initial 30 day period….especially with a product like Devialet.

I can just hear people now, “oh, I won’t need support!” HA! Trust me, the ones asking for the biggest discounts are the ones who WILL need the most support.

Next, dealers work closely with manufacturers and distributors and with few exceptions, discounting is HEAVILY discouraged. It’s a lose/lose/lose situation and manufacturers/distributors have plenty of real life examples.

Finally, let’s talk about a dealer selling against himself. Huh? What? What do you mean Mike? By discounting a product heavily, it encourages excessive flipping (yes, yes, this is the pot calling the kettle black, but it's still a fact). The dealer sells product A for $5000 (a 30% discount let’s say). Two months, hell, two weeks later its on Audiogon for $4800. The dealer has a pending sale which he loses to the guy who sees that great deal on Audiogon and buys it used instead.

I had an experienced dealer tell me one time, “I will never discount more than what I earn.” Meaning, if it’s a 30% line, he won’t give 15%. He may only give 10% or 12%, if anything at all.

At the end of the day, it may surprise some audiophiles to learn that there are actually two types of buyers. First, is the audiophile. They think they know everything and want the biggest discount. Second, is the very wealthy customer. They don’t know the difference between an amp and a DAC, but they love love love music, they want the best, they will pay for the best (and rarely ask for a discount), but they EXPECT world-class, white glove service. If something isn’t working, you’re racing to their house as fast as you can to get it fixed. Trust me.

So, what’s the solution? I think both the consumer and the dealer need to work together. Dealers have already been mostly forced out of a B&M situation due to squeezing margins and falling profit margins. At the end of the day, it’s all about relationships. Building a long term relationship between a dealer and a consumer is a win/win for everyone. I myself have tried to be creative. Providing free cables in lieu of a big discount as an example. Taking trades is another. Packaging components together is yet another.

So as long as there are consumers, there will continue to be expectations of a discount. We are all consumers. They are sellers, we are buyers and visa versa. We will all continue to negotiate the best price on whatever we buy - a car, appliances, etc. MSRP is the starting point. But a little perspective may aid in the understanding of the "other side".
 
I don't think that asking for a reasonable discount is disgraceful by any means, but demanding it is something else. What I think is at least unethical is using a local dealer to audition products, even sometimes taking them up on offers of extended in-home auditions, and then going ahead and purchasing the same item at a better price from another source. That is what is hurting independent local dealers in today's global economy. You shouldn't expect or receive the same level of service or support when making a discounted purchase from 'alternative' sources, who often are not even factory authorized dealers of the products that they discount.
 
Mike,

Great post! I agree, dealers are between a rock and a hard place. But for a guy like me paying full retail is just a non starter. I don't just "think" I won't need service, I know it. A lot of gear has passed through my listening room and never once did I ask a dealer for anything. I'm looking for someone to take my order and ship the product. That's it. Even when I've made a mistake and know it immediately, I consider that to be my problem. I sell it myself at a loss.

But I agree, people that want service need to pay a dealer for that service. I don't visit B&M dealers because I feel it would be dishonest to demo product at their store and then buy elsewhere at a discount. Everything I own was purchased blind. So I think there are customers like me that should get a deep discount because we truly won't need anything other than taking the order and then there's those people that truly need a full service dealer.
 
audio.bill said:
What I think is at least unethical is using a local dealer to audition products, even sometimes taking them up on offers of extended in-home auditions, and then going ahead and purchasing the same item at a better price from another source.
Click to expand...

Totally agree. Basically stealing a service.
 
Great post Mike. There's one point that I'd like to comment on re: dealers, but I'm afraid doing so will steer this thread completely off course.
 
Audio.bill - Because the thread could become toxic. As it stands, I'm having to bite my tongue on this topic. :D :D
 
My personal take is respecting one's relationship with a dealer. I'm not an audiophile or wealthy by the farthest stretch of the imagination, so I need all the help I can get, but I do not expect the moon, it's unethical, disrespectful and shows stupidity.
Personally, if I'm shopping for something (usually out of need per the school of thought I adhere to), I appreciate being put in touch with a good dealer and I ask questions about the item(s) and what not and converse and what I do is wait for a deal or discount to be offered. Until then I assume and count that I will be paying full retail price. I'm more than ok with that too because if I do get a break of some type on anything that leaves some funds left over for either sundry items or a starter dough for the next item I may need to save up for. I don't really ask for a discount or deal because to me it just seems to be a potential good relationship killer. If the dealer wants to make me a deal or discount or whatever that is fair to both of us, that's up to the dealer and if such a deal or discount is made and accepted, mum's the word in my book. It is between me and the dealer and no further, period. I don't care if I think it is the greatest deal since the Louisiana purchase, saying something about it to anybody has potential to destroy everything and hurt others.

That's my personal rule, everyone else's will vary.

~Eric
 
audio.bill said:
I don't think that asking for a reasonable discount is disgraceful by any means, but demanding it is something else. What I think is at least unethical is using a local dealer to audition products, even sometimes taking them up on offers of extended in-home auditions, and then going ahead and purchasing the same item at a better price from another source.
Click to expand...

That's called betrayal, not only of a potential good relationship with a dealer who will most likely do what he can to get you a decent deal if you want to purchase, but it is also self-betrayal because once you pull a stunt like that, word travels fast.
 
Lots of good points made here but I especially agree with audio.bill and Jax that if you use a local dealer to demo gear extensively, then you shop for the best price on the interwebs, that is highly unethical (not to mention that buying from another dealer online in another state, when your local dealer is the local representative of the brand in question is typically not allowed by the manufacturer in question - enforcement is another issue).

Having said all that, I agree that negotiating a discount is between yourself and the dealer you are transacting with. With the exception of my speakers, I have bought all my other equipment from the same dealer and although I have not made a major audio purchase in the last 3-4 years, I intend to continue to deal exclusively with my local dealer because I have an established relationship with them and wish to continue to do so, and the only way I can contribute towards them being around is to purchase my gear from them (many of you already know who I primarily deal with here in the greater Boston area). I typically get a discount but it is not humongous and I am ok with that. The flip side is whenever I want to listen to a piece of gear, I can arrange to do so whenever I want. Call in advance and I have a room available to me with the demo gear and when possible I can also ask for the ancillary equipment/system I want to hear it with. I usually get 2-3 hours of listening time unfettered (no one comes in and bugs me). Home demos when possible are also not a problem. As another example of the service I receive, I recently moved and I called the turntable expert/setup guy at my local dealer a few days before moving and he came and disassembled my table and set it up at the shop and I will be able to go in over the next couple of weeks to listen to a few carts (as I tore off the stylus off my old cart and hadn't replaced the cartridge in the last couple of years) and when I am ready, I will have the new cart mounted and setup in my new place (which we moved to 10 days ago). All I had to do is make the request, and the answer was an unequivocal "no problem...it's done." I am willing to get a less aggressive discount and receive this kind of support. In my opinion, these guys do it right and they are a dying breed. They have lasted as long as they have even with the overhead of a bricks and mortar operation because they do deliver this level of service and have established a loyal customer base.

But as Mike said, it is becoming harder and harder to compete effectively and stay in business as online competitors discount more heavily and compete effectively for the incremental sale, and as customers use the web more effectively to compare prices and shop for the biggest discount. The proverbial rock and a hard place seems to be getting narrower and narrower for the traditional b&m high-end audio retailer.
 
And Jap, no its not disgraceful. I found some of your posts on WBF hilarious.....and to the point....
 
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