Is asking for discount pricing disgraceful?

Listening to gear at your local dealer and then shopping other sellers for the lowest price is one of the reasons that many companies no longer show their full list of dealers on their websites. Instead they require you to contact either the company or distributor who will direct you to the dealer closest to you.
 
Mike has made a point that cuts to the bone about what I talked about before, and that's the relationship between a gear flipper and a dealer. Dealers can't afford to be in competition with their customers or friends. And don't think for a second that the distributors and OEMs won't notice that lots of gear sold by a certain dealer comes up for sale quickly on the used market at heavily discounted prices.
 
Thank you, Mike, for the fine and informative post about what it means to be a dealer. What you say more or less appears to vindicate my position, quoted in the OP. Discount hunters just don't know much about business. If you think profit margins in this industry are so large for everyone, think again. There is also the fairness principle -- even if it cuts into your wallet. If you treat others unfairly you have no business complaining about the unfairness in this world, and towards you.
 
Hey Al, do you pay full MSRP for your cars too?
 
I'm not a gear flipper, but I can see it another way. If a gear flipper and a dealer have some relationship how do we know what financial transaction is taking place between this flipper and the dealer. I say that the majority of gear flippers are paying list or pretty much close to it if they get a discount for their gear and really whats the big deal if they sell it. The dealer and the manufacturer each received their money for the sell of a product, and the dealer in most cases orders a replacement.

On this site, lets just say some members flip gear about as quick as I fill my boat up with gas. :D

Discounts, when we purchase a car we hunt for discounts, and there is even sites like for example True Car that give you a ballpark on what is fair and what is an oversell by a dealer. I look at this the same for audio equipment, TV's, appliances boats etc.. The relationship one builds between a dealer of anything be it, audio, cars etc.. has always been in my experience about the dealers drive for repeat business. If they walk the mile to ensure your getting the best price and that includes a discount and can back up that price with service, I will more than likely be a repeat customer.
 
Al...your logic is mystifying. Any transaction between buyer and seller is subject to a negotiation that both parties can enter into willingly or unwillingly. If a buyer requests a discount and the seller does not feel he can accommodate said customer than that request is denied and said customer can then decide whether he/she still wants to purchase the item under consideration at the asking price. There is no fair or unfair. A dealer is in business to make money. Yes. But dealer also has the ability to ascertain under what conditions it makes financial sense for he/she to discount a product (.i.e., forego on full mark-up) if it will generate a sale that is still profitable for the dealer. Your point of view seems at best naive and "fairness" doesn't enter into the equation. You seem to think that a dealer is being coerced into selling at a price they don't want when a customer asks for a discount, whereas the reality is the dealer can say no. Dealers who need to discount less aggressively to cover higher b&m over head costs need to figure out how to deliver more value-added services to be able to sustain premium pricing. That is their chsllenge vs. pure online retailers who don't have the same overhead costs and are therefore able to discount more aggressively.
 
cmalak said:
Al...your logic is mystifying. Any transaction between buyer and seller is subject to a negotiation that both parties can enter into willingly or unwillingly. If a buyer requests a discount and the seller does not feel he can accommodate said customer than that request is denied and said customer can then decide whether he/she still wants to purchase the item under consideration at the asking price. There is no fair or unfair. A dealer is in business to make money. Yes. But dealer also has the ability to ascertain under what conditions it makes financial sense for he/she to discount a product (.i.e., forego on full mark-up) if it will generate a sale that is still profitable for the dealer. Your point of view seems at best naive and "fairness" doesn't enter into the equation. You seem to think that a dealer is being coerced into selling at a price they don't want when a customer asks for a discount, whereas the reality is the dealer can say no. Dealers who need to discount less aggressively to cover higher b&m over head costs need to figure out how to deliver more value-added services to be able to sustain premium pricing. That is their chsllenge vs. pure online retailers who don't have the same overhead costs and are therefore able to discount more aggressively.
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Fair enough. Your argument though does not consider the fact that there are people who in principle will not buy anything at full price, and not even anything that is not just somewhat, but steeply, discounted. This becomes evident from reading posts on audio forums for a while. These are the people who ruin an industry -- and then complain that there are no brick-and-mortar dealers anymore. Talking about mystifying logic.
 
I'm new here but I've been buying, selling and listening for many years... As a retailer I expect and want someone to ask for a discount, it means they are a buyer and I have chance of making the sale.. If someone doesn't ask then I don't know if they are a buyer or just looking, so ask!

But if you're a serious buyer please don't ask for a stupid discount of 20- 30% off most audio has about a 40% margin.. speakers a bit more say 50% video has squat.. nothing in audio has a 100% margin.. That being said if a retailer, brick and mortar store can't make about a 30% profit then it becomes a loser for them.. when one figures cost of rent, payroll, taxes and everything else a 10 or 15% profit is actually a lose..
 
CPP said:
I'm not a gear flipper, but I can see it another way. If a gear flipper and a dealer have some relationship how do we know what financial transaction is taking place between this flipper and the dealer. I say that the majority of gear flippers are paying list or pretty much close to it if they get a discount for their gear and really whats the big deal if they sell it. The dealer and the manufacturer each received their money for the sell of a product, and the dealer in most cases orders a replacement.

On this site, lets just say some members flip gear about as quick as I fill my boat up with gas. :D

Discounts, when we purchase a car we hunt for discounts, and there is even sites like for example True Car that give you a ballpark on what is fair and what is an oversell by a dealer. I look at this the same for audio equipment, TV's, appliances boats etc.. The relationship one builds between a dealer of anything be it, audio, cars etc.. has always been in my experience about the dealers drive for repeat business. If they walk the mile to ensure your getting the best price and that includes a discount and can back up that price with service, I will more than likely be a repeat customer.
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If the majority of gear flippers are really paying close to list price and then flipping the gear a week or two later at a huge loss, that means the majority of gear flippers have large piles of cash they are burning through. The "big deal" if they sell their new gear at a hefty discount from the list price is that it potentially hurts the dealers they bought it from. Dealers are essentially competing against their customers in the marketplace and they are devaluing the gear dealers are trying to sell. I thought Mike made that pretty clear in his post.
 
Asking for a discount price in HiFi is not disgraceful imho. It all depends at the amount of discount you ask for.
I never mention an amount.
I ask my dealers " what could be your best price ? ".
Everyone knows that the MSRP does not mean a lot.
 
I think we need to define what a B&M dealer is: its one that leases commercial space, has a salaried staff, pays workman's comp, etc.

then there's the guy that sells out of his house, this is probably not his primary source of income or has a spouse that's the bread winner and their 'overhead' is ridiculously low. what should that 'dealer' expect as a reasonable margin on their sales?
 
Here's a question: does sticking hard to MSRP ever make sense?

Food for thought: $1400 Triton 7 speakers. Lugging speakers over to the customers, unboxing them, setting them up, etc. With such a small $ margin already, why would a dealer bother discounting?

Which brings me to another, what I'll call, market approach. One of the things that a dealer has to look at is their target market. There are dealers that sell lower priced products, such as Golden Ear, Integra, Yamaha, Boston Acoustics, Definitive Technology, etc. Then on the flip side are dealers that sell more higher priced gear such as McIntosh, ARC, Magico, Wilson, etc.

The challenge for the lower priced product dealer is the margins are smaller in terms of dollars, making it difficult to give any kind of discount at all - especially when you factor in B&M costs - but, on the plus side, the market potential is bigger. The challenge for the dealer dealing in higher priced items is that there is a larger margin dollar, but the potential buyer market is smaller.

What I found in my research in speaking with over a dozen different dealers was that the lower priced item buyer was much more of a customer service challenge. They wanted the biggest percentage discount and they were more likely to shop your price. All of them indicated there was still a lot of time spent "hand holding". Also, their loyalty was also not as strong. These of course are general statements, but through the experience of these dealers, what they had experienced more often than not. On the flip side, the customer purchasing higher priced gear has a higher level of expectation of service - any time or day. Contrast buying $1400 speakers with $200,000 speakers. How many trips will each dealer make back to the customers to ensure the speakers are placed properly, etc. There is only so much money in a $1400 speaker sale to justify time and trips. Experienced dealers, manufacturers and distributors have all said "don't discount too much, if at all, because there will be after sales service required."

At the end of the day, I strive to provide the best service I can, but my point is back to an understanding of "the other side" and margin dollars, rather than percentages.
 
puroagave said:
I think we need to define what a B&M dealer is: its one that leases commercial space, has a salaried staff, pays workman's comp, etc.

then there's the guy that sells out of his house, this is probably not his primary source of income or has a spouse that's the bread winner and their 'overhead' is ridiculously low. what should that 'dealer' expect as a reasonable margin on their sales?
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Great question. My answer would be that the B&M stores can't discount....or very very little if they do. The cost of overhead is too steep. Rent, electricity, cleaning, labor, taxes, etc. But what they can do is provide top top top notch service in return and take trades which they can then show on the floor. The OTHER big things B&M stores could focus on for success is only target brands that resale to B&M stores only: ARC, Mc, Wilson, PrimaLuna (yes, this one was a shocker for me too), etc. It's also easier for a B&M to hold a monthly "wine & cheese" gathering in their store for potential new customers.

These are just some of the competitive advantages B&M stores have as I see it.
 
When I buy from a B&M I enquire about pricing upfront and if the discount is to my liking, before I use any of the stores time or resources auditioning, I will commit to the B&M that if I buy the product in question it will be from that store.

When I am negotiating something blind with an internet seller I make it clear that providing their best price (and answering a few basic questions) is all I expect from them and that they are in a competition that is largely based on price.

If the two parties have an open, honest dialogue on the terms of the commercial relations and both willingly enter into that relationship, concepts like disgrace and emotion should never even be on the table.
 
Mike said:
Great question. My answer would be that the B&M stores can't discount....or very very little if they do. The cost of overhead is too steep. Rent, electricity, cleaning, labor, taxes, etc. But what they can do is provide top top top notch service in return and take trades which they can then show on the floor. The OTHER big things B&M stores could focus on for success is only target brands that resale to B&M stores only: ARC, Mc, Wilson, PrimaLuna (yes, this one was a shocker for me too), etc. It's also easier for a B&M to hold a monthly "wine & cheese" gathering in their store for potential new customers.

These are just some of the competitive advantages B&M stores have as I see it.
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Mike B&M stores do discount, remember BEST BUY & their Magnolia outlets. Holiday sales, end of year closeouts but of course we are only talking about audio equipment that cost a years paycheck to some. :D
[h=2]DEFINITION of 'Brick And Mortar'[/h] A traditional "street-side" business that deals with its customers face to face in an office or store that the business owns or rents. The local grocery store and the corner bank are examples of "brick and mortar" companies. Brick and mortar businesses can find it difficult to compete with web-based businesses because the latter usually have lower operating costs and greater flexibility. It is increasingly common for brick and mortar companies to also have an online presence. For example, some brick and mortar grocery stores, such as the national Safeway chain, allow customers to shop for groceries online and have them delivered to their doorstep in as little as a few hours.

I enjoy B&M audio stores, or the ones that are left. Some are so snooty they act like your going to steel something, unless you drove up in a $70k car. The ones I visit which are under 60 miles from the house, are personable, knowledgeable, do home installation if needed and they carry acceptable product lines including those items for thrifty audio types and both will offer a discount if your a regular. Cheese and wine and/or good ale helps after closing. I think getting a discount all depends on the buyers attitude as well as the sellers attitude.











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This is an interesting topic and to some extent similar to discussions I have had on multiple occasions with my primary dealer. I no longer discuss what I have paid for any product with anyone, not even my closest audio friends who often shop at the same store. (Note: I made one mistake about ~10 years ago that could have cost me two relationships, so I am adamant on this point now).

I don't believe that discussing actual discounts or dealer margins has any place in these forums. ( In that vein I am hoping someone edits one of the previous posts in this thread). My dealer and also now a friend and I often debate the issues sites such as this, AA and WBF have on the industry. My position is that Audiogon let the genie out of the bottle and it will never be put back. IMO the secondary market sets the price point that consumers base what is a fair price to pay for gear.

I value the service provided by the two B&M stores I frequent in my area. I can audition any piece of gear they have in stock in my own home. My commitment to them is that I will never abuse this benefit my taking home a piece of gear I have no intention of considering for purchase. They also know that I will not shop around for a better price. In the end both of parties must be comfortable with whatever deal is on the table. There are a couple of people here who know that I had the opportunity to acquire one of my current pieces of gear at a significantly better price than I ended up negotiating with my dealer.
 
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