The Secondary Market

[2FarGone]

Something over a year ago, I had decided on a power amplifier upgrade. Having settled on a used amp from a small manufacturer, I intended to have the seller ship the amp directly back to said mfr to have a minor issue resolved and generally have the amp checked out. While speaking with the owner of the company, he made it very clear that he had little use for buyers of his equipment used because he felt that they “did not support his company”. I thanked him for his time, and did not buy the amp in question. Needless to say, the seller wasn’t pleased.

FWIW, I am not now, nor will I ever be a buyer on the primary market for this man’s products, as they are quite simply beyond my means. I have the choice of buying new product in a certain price range or buying used to get hopefully better equipment, albeit at greater risk. I’m fairly sure that there are several people on this forum who are either manufacturers or otherwise make their living in the audio world, so I’d like their perspective on used gear. It seems to me that the secondary market supports the primary market by providing an upgrade path for new product owners. What say you?

 

[brad225]

People do have on ways of responding 2FG.

I once owned apair of Vandersteen W2 subs I used with my Spica TC 50 speakers. One was new and one was used.
I was puzzled when I discovered how they would happened to operate when connected to electronics differently that I had ever seen. So, I call and spoke with Richard Vandersteen.

I asked if it was normal for the subs to play when only the + wire was connected not needing both + & -.
He told me I was an idiot and it should be illegal to resell equipment.
I thanked him for his time and sold my subs.

 

[Michaels HiFi]

Something over a year ago, I had decided on a power amplifier upgrade. Having settled on a used amp from a small manufacturer, I intended to have the seller ship the amp directly back to said mfr to have a minor issue resolved and generally have the amp checked out. While speaking with the owner of the company, he made it very clear that he had little use for buyers of his equipment used because he felt that they “did not support his company”. I thanked him for his time, and did not buy the amp in question. Needless to say, the seller wasn’t pleased.

FWIW, I am not now, nor will I ever be a buyer on the primary market for this man’s products, as they are quite simply beyond my means. I have the choice of buying new product in a certain price range or buying used to get hopefully better equipment, albeit at greater risk. I’m fairly sure that there are several people on this forum who are either manufacturers or otherwise make their living in the audio world, so I’d like their perspective on used gear. It seems to me that the secondary market supports the primary market by providing an upgrade path for new product owners. What say you?

I've learned that unfortunately many of these audio companies are often their own worst enemy.

They make fantastic products but they have no clue about basic business 101.

I would agree with you that it's in his best interest to support repairs on his gear. Certainly he has a right to charge for repairs (I'm sure you were willing to pay) but in my personal view, customer support is a part of what helps gear keep - or not keep its value.

Although I am not a fan of the sound of Pass Labs myself, there is no denying there is no better company when it comes to customer support. I believe that is part of why they retain some of the value they do - customers know they will be taken care of and buying their gear is virtually risk-free.

 

[NewAlkyogre]

I bought some second hand stuff, some buys I am very happy with. The Bryston preamp is still working and very good. Also a Marantz sacd player is still functional which I bought 2nd hand in 2009, and my Denafrips Dac is still in my setup. The latter was almost new.

On the other hand: guarantee until the door: an SMSL dac stopped working after half a year and one of my hypex ncores exploded after a few months.

In general you have to calculate that every piece of equipment has a maximum amount of playing time, and that if you are unlucky that point is almost reached when buying.

One additional thing: what Vandersteen is doing not allowing to resell equipment is prohibited here. A manufacturer does not have anything to say what a consumer does after buying. They are not above the law.

 

[mep]

I bought some second hand stuff, some buys I am very happy with. The Bryston preamp is still working and very good. Also a Marantz sacd player is still functional which I bought 2nd hand in 2009, and my Denafrips Dac is still in my setup. The latter was almost new.

On the other hand: guarantee until the door: an SMSL dac stopped working after half a year and one of my hypex ncores exploded after a few months.

In general you have to calculate that every piece of equipment has a maximum amount of playing time, and that if you are unlucky that point is almost reached when buying.

One additional thing: what Vandersteen is doing not allowing to resell equipment is prohibited here. A manufacturer does not have anything to say what a consumer does after buying. They are not above the law.

You missed the part where Brad225 wrote that RV said reselling equipment SHOULD be illegal.

 

[Michaels HiFi]

One additional thing: what Vandersteen is doing not allowing to resell equipment is prohibited here. A manufacturer does not have anything to say what a consumer does after buying. They are not above the law.

It's not allowed here either - they can't prevent you from reselling equipment you own. Vandersteen has a terrible industry reputation for a reason.

They can choose to not support regardless of the laws. They can simply not answer your email or phone calls.

Accuphase is a prime example - they will not support any piece of gear anywhere in the world that was not bought through the local distributor. They won't even let you buy the repair manual.

 

[Mike]

My perspective of the used market is very different. The used buyer is often someone expecting perfection, warranty, support, but want to buy at used prices. I have a completely separate company called Play It Again Audio LLC with separate staff, website, etc. to deal with this segment of the market.

The used market for a dealer can be tricky, even with a separate entity. Let’s say for example, our customer purchases a brand new XYZ Amplifier. They get it home, fall in love with it and within two weeks, want the model above (real example). If the middle model is this good, then the top model must be so much better. We take the middle model back on trade after only a few weeks for the top model. Now we are stuck. We can’t advertise it or massive whining sets in. This is one of the dumbest rules for a dealer. It ties our hands until we can quietly find a buyer for it.

 

[Shadowfax]

I bought a Used VAC Pre years ago and had Tube questions. Kevin spent 30 minutes on the phone with me. That is how they all should treat people who purchase their gear new or used.

 

[W9TR]

I have purchased the majority of the gear in my signature used. I tend to buy McIntosh electronics not because it’s the best, but because I can get service manuals and factory support when I need it. I also happen to like the McIntosh house sound, though it is not for everyone. They even have a trade in program where I can get up to 75% of the new price for a used piece of gear in trade in on a new more expensive item. I have taken advantage of this program a few times.

Smart manufacturers realize that people trade in gear frequently as they upgrade. It’s part of the scene. Always has been. Pissing off the customers of your used gear is not a great way to build a business.

 

[Phil A]

Many moons ago, I (when I lived in Northern VA) was interested in a popular brand of a power conditioner. The owner of the store where I did much of my shopping brought the brand in, listened to it out of the box for probably a minute or two and then sent it back. At a NYC home entertainment expo (about 25 years ago), I ran into the president of the power conditioner company and of course he proceeded to tell me what a character the owner of the stereo store was. So I ended up buying a couple of used units (which now sits in a secondary system in a small bedroom with a recently purchased used Lumin M1 which replaced a couple of components, one bought new and one used, which eventually I'll sell - pic attached).

Also many years back, I made 4 attempts here to get an audition at a local shop in FL (and there's basically nothing else within about an hour and a half from where I live) for a music server to no avail and I was promised a quick (like about a half hour or less) in home demo. I did basically all the work in loading music on the store system and dragging in what I was using too. About 10 months later the store picked up a high end brand of speakers. I personally knew the director of sales, who used to live in Northern VA, worked for another company which the store in VA carried and for a bit his son worked at the local VA store (not to mention he was at one point in business with another friend of mine making speakers which were well reviewed at that time). I ended up buying a lightly used music server from a dealer in Illinois as I was not able to get an audition.

So I went to an event at the local store here (FL) to say hello to the director of sales (as I had not seen him in years). The owner of the local store realized I knew the person well and made an erroneous assumption I was someone mentioned him and did a semi-ridiculous flip out. I was asked about it when I went to the 2017 RMAF by the director of sales (as the behavior of the store owner was slighlty ridiculous) and I just politely told him what it was about.

I don't go walking into stores (of any kind - stereo, car dealers, etc.) just to waste anyone's time. When I'm ready to buy something, I'll go looking. I do understand that people kick the tires too much. I had a friend who worked at the local dealer in Northern VA and for a about a 6 year period, I did most of his installs and set-ups with him. I've seen first hand how people waste the time of dealers. Some of them came back to buy long after the model they were looking at was discontinued.

 

[Mr Peabody]

Something over a year ago, I had decided on a power amplifier upgrade. Having settled on a used amp from a small manufacturer, I intended to have the seller ship the amp directly back to said mfr to have a minor issue resolved and generally have the amp checked out. While speaking with the owner of the company, he made it very clear that he had little use for buyers of his equipment used because he felt that they “did not support his company”. I thanked him for his time, and did not buy the amp in question. Needless to say, the seller wasn’t pleased.

FWIW, I am not now, nor will I ever be a buyer on the primary market for this man’s products, as they are quite simply beyond my means. I have the choice of buying new product in a certain price range or buying used to get hopefully better equipment, albeit at greater risk. I’m fairly sure that there are several people on this forum who are either manufacturers or otherwise make their living in the audio world, so I’d like their perspective on used gear. It seems to me that the secondary market supports the primary market by providing an upgrade path for new product owners. What say you?

I agree with you. I've purchased both new and used. The used market lets people have gear they wouldn't ordinarily be able to afford and opens a market for those wanting to upgrade. I'll confess my Mark Levinson pieces I purchased used. If not, I simply wouldn't have them I can't afford $20k+ components. I take that back my amp is used the preamp was a very good price on a demo unit.

It wasn't wise how you were treated. MFR didn't know your situation, what if you liked the amp and later had the money to buy a new one. The used market is vital I'd say. Where would a manufacturer be if a customer was stuck with a component until it's life ended. They can't say they are losing business most people buy used because they can't afford what they want new. The used market allows the original customer to sell their gear and go back to buy new again.

Not only what I said already the manufacturer turned down a chance to make a bit of money for the service dept.

On the other, hand Parasound was very public with their business changes once the company was sold to the new owner. They were attempting to stop gray market goods. I can support that. No dealer wants to deal with a customer who bought a product from an unauthorized dealer and now can't get warranty help from the unauthorized dealer.

Some manufacturers are alright with resales as they allow transferrable warranty.

 

[2FarGone]

I agree with you. I've purchased both new and used. The used market lets people have gear they wouldn't ordinarily be able to afford and opens a market for those wanting to upgrade. I'll confess my Mark Levinson pieces I purchased used. If not, I simply wouldn't have them I can't afford $20k+ components. I take that back my amp is used the preamp was a very good price on a demo unit.

It wasn't wise how you were treated. MFR didn't know your situation, what if you liked the amp and later had the money to buy a new one. The used market is vital I'd say. Where would a manufacturer be if a customer was stuck with a component until it's life ended. They can't say they are losing business most people buy used because they can't afford what they want new. The used market allows the original customer to sell their gear and go back to buy new again.

Not only what I said already the manufacturer turned down a chance to make a bit of money for the service dept.

On the other, hand Parasound was very public with their business changes once the company was sold to the new owner. They were attempting to stop gray market goods. I can support that. No dealer wants to deal with a customer who bought a product from an unauthorized dealer and now can't get warranty help from the unauthorized dealer.

Some manufacturers are alright with resales as they allow transferrable warranty.

Realistically, I’m amazed that this is even a question. I know of no other product made where a manufacturer would deny service and repair simply because I was not the original purchaser of the product. Quite obviously, that service would have to be paid for. I can’t imagine any reasonable person having an issue with that unless the mfr had specifically stated that the original warranty was transferable and the product was still within the warranty period. It’s absurd - like driving into a car dealership with a five year old car with 110K miles on it, for which you’re the 3rd owner and expecting them to fix issues under warranty.

It seems to me that as a buyer of used equipment, I have to expect certain things and have reasonable expectations. Any item I buy used is unlikely to be perfect, but I have a reasonable expectation that any known issues - cosmetic or functional - will be disclosed so I’m able to make an informed buying decision. If I expect perfect, I should buy new. On those occasions when I have sold equipment, many buyers would state in feedback that the item was better than described, and that’s quite deliberate. I’d much rather have somebody I sold an item to be pleasantly surprised by its condition upon receipt than have them be disappointed., but it would be pretty unrealistic to believe that everyone thinks that way.

For dealers used equipment is a different world, one I’m not sure I would want to deal with personally.

 

[Mike]

Realistically, I’m amazed that this is even a question. I know of no other product made where a manufacturer would deny service and repair simply because I was not the original purchaser of the product. Quite obviously, that service would have to be paid for. I can’t imagine any reasonable person having an issue with that unless the mfr had specifically stated that the original warranty was transferable and the product was still within the warranty period. It’s absurd - like driving into a car dealership with a five year old car with 110K miles on it, for which you’re the 3rd owner and expecting them to fix issues under warranty.

It seems to me that as a buyer of used equipment, I have to expect certain things and have reasonable expectations. Any item I buy used is unlikely to be perfect, but I have a reasonable expectation that any known issues - cosmetic or functional - will be disclosed so I’m able to make an informed buying decision. If I expect perfect, I should buy new. On those occasions when I have sold equipment, many buyers would state in feedback that the item was better than described, and that’s quite deliberate. I’d much rather have somebody I sold an item to be pleasantly surprised by its condition upon receipt than have them be disappointed., but it would be pretty unrealistic to believe that everyone thinks that way.

For dealers used equipment is a different world, one I’m not sure I would want to deal with personally.

Resale of goods offers no value whatsoever to the manufacturer - despite whatever you may think. Let me give you a real world example:

Let’s assume a CD player manufacturer does allow the transfer of warranty. The original owner received it via freight - on a pallet. He then sells it to someone over the internet and ships it Fedex. The fedex sorting station has conveyor belts which always causes a tumbling of the box. The tumbling motion is destructive to the transport mechanism. The new owner gets it and it has issues loading the CD. He calls the manufacturer to repair under warranty. Fair? No.

The warranty is extended to the original purchaser only in many (most) cases.

If you want warranty, buy new. Otherwise you live with the tail light warranty in most cases.

 

[2FarGone]

Resale of goods offers no value whatsoever to the manufacturer - despite whatever you may think. Let me give you a real world example:

Let’s assume a CD player manufacturer does allow the transfer of warranty. The original owner received it via freight - on a pallet. He then sells it to someone over the internet and ships it Fedex. The fedex sorting station has conveyor belts which always causes a tumbling of the box. The tumbling motion is destructive to the transport mechanism. The new owner gets it and it has issues loading the CD. He calls the manufacturer to repair under warranty. Fair? No.

The warranty is extended to the original purchaser only in many (most) cases.

If you want warranty, buy new. Otherwise you live with the tail light warranty in most cases.

Actually, I think that’s about what I said, and I agree completely. If you want perfect with warranty, buy new.

I’m curious about direct to consumer business models, though. If an item is returned at the end of the trial period, is it now sold as a demo, or perhaps gone through at the shop and now a refurbished unit?

 

[NewAlkyogre]

My expensive 2nd hand audio gear is never ever shipped by delivery services like Fedex, oh hell no
I always will get them personally in my own car even when it takes a whole day of driving.

 

[Mike]

Actually, I think that’s about what I said, and I agree completely. If you want perfect with warranty, buy new.

I’m curious about direct to consumer business models, though. If an item is returned at the end of the trial period, is it now sold as a demo, or perhaps gone through at the shop and now a refurbished unit?

Now that’s an excellent question!

 

[Mike]

My expensive 2nd hand audio gear is never ever shipped by delivery services like Fedex, oh hell no
I always will get them personally in my own car even when it takes a whole day of driving.

Smart. Only issue is that unless you’re prepared to drive 10-30 hours each way, you do limit your scope for the market.