Used Hi-Fi Market

Don't you guys think...the hobby needs to find a middle-ground; between "old-school" B&M, and "new-school" hit & run dealers?
 
CDLehner said:
Don't you guys think...the hobby needs to find a middle-ground; between "old-school" B&M, and "new-school" hit & run dealers?
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I don't know what a "hit and run" dealer is. Old school was B&M, but people have been selling gear out of their houses for a long time. I have known guys since the early 1980s that sold good lines out of their homes and they are the alternative to the B&M stores. Whether you run a B&M audio store or you are a reputable dealer selling from your home, you still have a lot of money invested in inventory and you can't afford to have your lines pulled from you because you are selling them out the backdoor at fire sale prices. The high-end community is very small and it's not hard for companies to figure out where gear is coming from that is being dumped on the used market.
 
mep said:
I don't know what a "hit and run" dealer is. Old school was B&M, but people have been selling gear out of their houses for a long time. I have known guys since the early 1980s that sold good lines out of their homes and they are the alternative to the B&M stores. Whether you run a B&M audio store or you are a reputable dealer selling from your home, you still have a lot of money invested in inventory and you can't afford to have your lines pulled from you because you are selling them out the backdoor at fire sale prices. The high-end community is very small and it's not hard for companies to figure out where gear is coming from that is being dumped on the used market.
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Interesting, and fair point. I'm 48...so I'm no kid; but I've only had the hi-end budget, that I talked about...for about the last 10 years.

So...even though I also know, some good dealers; who work out of their houses, etc. I thought it was a fairly new phenomenon.

Again...I don't want to open up a can of worms; but I do find it to be an interesting discussion. One that has quite naturally evolved...from "why's the used market off these days", to "is the hobby/industry broken...and how do we fix it"?

I see audio...a lot like, buying a new car. There are some people, who walk on the lot...and pay sticker (rare, but it probably still happens); some pay, what the sales guy tells them...is a "good" deal, but there's still a TON of profit built in. And then there's guys like me, lol ;)

I tell salesmen..."you're going to have to make your money, off some nice, old lady..." (presumably, paying sticker) "...because I'm getting the deal". OK...I try not to put it that way; I can be an a$$hole, but I try not to be that big an a$$hole. Point is...in that case, and in audio IMO; those who "over-pay"...make it possible, for some to get the bargain.

Sure...any guy, who sells 5 points over consistently; even with the low overhead, of working out of his home. Probably isn't going to stay in business long. But...I assume, he gives that deal, to a select few; because he is also, having some...who "settle" for 10 points off full retail.

Now, I think the auto analogy is a good one; because...that's an area, where the Internet has created a lot more transparency. People see dealer-cost, hold back...what others are paying; and more and more say "I'm not going to be the sucker". If you know the industry, even a little; it's not rocket science...to figure out costs.

Then the only question becomes...how much does the dealer, need to make; and how willing is he, to break his licensing agreements. Man...this really has gone further down the rabbit-hole, than I wanted; but maybe it's a discussion...that needs to be had?

Because my next thought is...that I'm sure many of you; who are dealers yourselves, in whatever guise that manifests itself. Will say...a dealer, should never discount so deep; he violates his license agreement. But don't we all know...a) the tricks to get around such things, and b) that some manufactures either condone, turn a blind eye...or selectively turn a blind eye to such things?
 
CD-The more I read what you say the less I think you really know about how retail audio works in the real world.
 
CDLehner said:
...Because my next thought is...that I'm sure many of you; who are dealers yourselves, in whatever guise that manifests itself. Will say...a dealer, should never discount so deep; he violates his license agreement. But don't we all know...a) the tricks to get around such things, and b) that some manufactures either condone, turn a blind eye...or selectively turn a blind eye to such things?
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What you're saying can be construed as price fixing for which antitrust laws exist. With luxury goods some call it "minimum retail price restrictions" to skirt around FTC definitions. Rolex does this, they have carefully worded agreements which keep their dealers in check. bottom line its actually illegal for a manufacturer to tell a retailer what price they have to sell something at.
 
mep said:
CD-The more I read what you say the less I think you really know about how retail audio works in the real world.
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Or you don't. I've had conversations...seen price sheets, quotes.

What didn't I understand?

It's weird; I get "criticized"...for having owned 100 pieces of gear, rather than 10. Yet...no one wants to acknowledge, it kinda means I know my way around a deal or two :skeptical:
 
puroagave said:
What you're saying can be construed as price fixing for which antitrust laws exist. With luxury goods some call it "minimum retail price restrictions" to skirt around FTC definitions. Rolex does this, they have carefully worded agreements which keep their dealers in check. bottom line its actually illegal for a manufacturer to tell a retailer what price they have to sell something at.
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Huh? It's the cornerstone, of the industry; and has even been admitted to...in the course of this thread.

OK; are you talking about a technicality between...what can legally be done, and the manufacture...not needing to give any reason...for pulling a retail license?
 
mep said:
CD-The more I read what you say the less I think you really know about how retail audio works in the real world.
Click to expand...

I'd be careful tossing stones; or I will have to start giving examples...with details, but no names...to defend myself.
 
puroagave said:
What you're saying can be construed as price fixing for which antitrust laws exist. With luxury goods some call it "minimum retail price restrictions" to skirt around FTC definitions. Rolex does this, they have carefully worded agreements which keep their dealers in check. bottom line its actually illegal for a manufacturer to tell a retailer what price they have to sell something at.
Click to expand...

It all comes down to what the manufacture set as a price in the terms of the contract. A lot of gray area and legalese within contracts and we unless we are a dealer or a distributor don't have a clue what is within a contract unless you happened to be privy to a dealers and distributors contracts.. Some FTC Gov stuff. https://www.ftc.gov/tips-advice/com...ws/dealings-supply-chain/manufacturer-imposed
 
As usual; doesn't seem we can have a provocative conversation around here...without it breaking-down, into base components. :|
 
As I see it...

The market of high end audio is made up of 5% gear swappers. This number was previously the infamous 1%, but has grown proportionately to the number of B&M closings. The gear swappers are able to, over the years, build up quite the network. They are always on the hunt for a great deal so they can "buy, try, sell, repeat". But this group is very very small relative to the other groups.

The remaining is made up of 65-75% "audiophiles". This group has a plan. They are system builders. They will enjoy their turntable for a few years before contemplating a move to a better one. They love gear, but the thought of constantly buying and selling is a major PITA to them. They are cautious. They take months to make a buying decision. They are more likely to ask for a home demo than any other group.

The last group representing 20-30% are the music lovers. The Doctors, dentists, lawyers, entrepreneurs, etc. who don't know a Preamp from an Amp. They love music, usually classical. They don't buy on price - they buy for your knowledge and expertise and most importantly CUSTOMER SERVICE. I have a Doctor client who called me at 10pm on Christmas Eve last year. His wife had messed up their Devialet/Aurender system. You can bet your ass I was in my car and at his house in 20 minutes. He has since referred four additional Doctor clients to me.

So, if you are having a hard time selling used gear, well, join the club. I have some gear I took on trade that have had zero nibbles. There are many factors for this. Rapid new product, an increase in the gear swappers population due to B&M store closings, and time of year. We are getting into the season where gear sells a little more slowly. People are thinking "spring" and "summer" activities and expenses. PLUS, it's tax season. Many of my clients have said "once I know what my tax bill is going to be, then I can move on that new cartridge Mike."

The other factor to look at is the level of gear. Are you selling a $4000 amp or a $40,000? Are there more buyers for a $4k amp or a $40k amp? Also, are there three other guys selling the same $4k amps?

And most importantly, is what you're selling what people want to buy? You may think your DAC is the greatest thing since sliced bread, but others may not share the same opinion.

The bottom line is that there are many factors which go into affecting the resale market. There are always going to be situations which affect the used market price.



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great analysis mike, I am part of the audiophile/music lover group according to your metrics. as a system builder i am a audiophile mindset. I love to research the parts and learn what makes them special. hence my watches and cars. i love to learn companies that put time and passion into their work along with the research to how its built. As a music lover, you are right. I am a doctor, and it amazes me who alot of my colleagues buy things and have not idea what it is and how it works. then they call me when they cant get their dealer on the phone and say "dude, i cant get the home theater to work!" I see the audio hobby no different than cars. you can buy a $100k car or speaker and then get maybe $50k for it. so i just wait for the dealers to call me with the nice demo/trade in discount. patience is the key
 
The reason, though I don't buy at the price levels of some on this forum, I don't buy anything I can't afford to hold on to if necessary until I see a wtb ad. That is how I have sold most things in the last couple of years and I have bought and sold on A'Gon and other sites since the late 90's. I now have a once empty spare bedroom almost full of speakers, amps, preamps and DACs that I will wait for the right opportunity. Patience and planning are the key at least when you are retired.
 
Mike said:
As I see it...

The market of high end audio is made up of 5% gear swappers. This number was previously the infamous 1%, but has grown proportionately to the number of B&M closings. The gear swappers are able to, over the years, build up quite the network. They are always on the hunt for a great deal so they can "buy, try, sell, repeat". But this group is very very small relative to the other groups.

The remaining is made up of 65-75% "audiophiles". This group has a plan. They are system builders. They will enjoy their turntable for a few years before contemplating a move to a better one. They love gear, but the thought of constantly buying and selling is a major PITA to them. They are cautious. They take months to make a buying decision. They are more likely to ask for a home demo than any other group.

The last group representing 20-30% are the music lovers. The Doctors, dentists, lawyers, entrepreneurs, etc. who don't know a Preamp from an Amp. They love music, usually classical. They don't buy on price - they buy for your knowledge and expertise and most importantly CUSTOMER SERVICE. I have a Doctor client who called me at 10pm on Christmas Eve last year. His wife had messed up their Devialet/Aurender system. You can bet your ass I was in my car and at his house in 20 minutes. He has since referred four additional Doctor clients to me.

So, if you are having a hard time selling used gear, well, join the club. I have some gear I took on trade that have had zero nibbles. There are many factors for this. Rapid new product, an increase in the gear swappers population due to B&M store closings, and time of year. We are getting into the season where gear sells a little more slowly. People are thinking "spring" and "summer" activities and expenses. PLUS, it's tax season. Many of my clients have said "once I know what my tax bill is going to be, then I can move on that new cartridge Mike."

The other factor to look at is the level of gear. Are you selling a $4000 amp or a $40,000? Are there more buyers for a $4k amp or a $40k amp? Also, are there three other guys selling the same $4k amps?

And most importantly, is what you're selling what people want to buy? You may think your DAC is the greatest thing since sliced bread, but others may not share the same opinion.

The bottom line is that there are many factors which go into affecting the resale market. There are always going to be situations which affect the used market price.



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Click to expand...

Mike...my only quibble with your analysis; is I hope you don't mean to imply, the 3 groups are mutually exclusive? That "swappers" aren't real audiophiles...or love music?

I don't think you do; otherwise...I'd take HUGE umbrage with that.
 
Gear swappers are of course audiophiles as well, otherwise they would have no interest in audio equipment.


Sent from my iPhone using Tapatalk
 
Mike said:
As I see it...

The market of high end audio is made up of 5% gear swappers. This number was previously the infamous 1%, but has grown proportionately to the number of B&M closings. The gear swappers are able to, over the years, build up quite the network. They are always on the hunt for a great deal so they can "buy, try, sell, repeat". But this group is very very small relative to the other groups.

The remaining is made up of 65-75% "audiophiles". This group has a plan. They are system builders. They will enjoy their turntable for a few years before contemplating a move to a better one. They love gear, but the thought of constantly buying and selling is a major PITA to them. They are cautious. They take months to make a buying decision. They are more likely to ask for a home demo than any other group.

The last group representing 20-30% are the music lovers. The Doctors, dentists, lawyers, entrepreneurs, etc. who don't know a Preamp from an Amp. They love music, usually classical. They don't buy on price - they buy for your knowledge and expertise and most importantly CUSTOMER SERVICE. I have a Doctor client who called me at 10pm on Christmas Eve last year. His wife had messed up their Devialet/Aurender system. You can bet your ass I was in my car and at his house in 20 minutes. He has since referred four additional Doctor clients to me.

So, if you are having a hard time selling used gear, well, join the club. I have some gear I took on trade that have had zero nibbles. There are many factors for this. Rapid new product, an increase in the gear swappers population due to B&M store closings, and time of year. We are getting into the season where gear sells a little more slowly. People are thinking "spring" and "summer" activities and expenses. PLUS, it's tax season. Many of my clients have said "once I know what my tax bill is going to be, then I can move on that new cartridge Mike."

The other factor to look at is the level of gear. Are you selling a $4000 amp or a $40,000? Are there more buyers for a $4k amp or a $40k amp? Also, are there three other guys selling the same $4k amps?

And most importantly, is what you're selling what people want to buy? You may think your DAC is the greatest thing since sliced bread, but others may not share the same opinion.

The bottom line is that there are many factors which go into affecting the resale market. There are always going to be situations which affect the used market price.



Sent from my iPhone using Tapatalk
Click to expand...

Very insightful post from the business perspective of our hobby...and awesome customer service touch by driving down to the doctor.
 
I have been called a Lowballer on occasion! Example ,when someone walks into a HIFI shop and walks out with a impulse buy of a RRP $25,000 Amp for a bargain price of $19,000 he has just paid for research ,parts, manufacturer cost and profit ,shipping ,import duties then dealers cost and markup profit.6 months later he wants $18 K for a near new Amp because it is $25,000 RRP. For the privilege and thrill of buying NEW the used price is for parts and manufacturer cost because the rest has been paid for already.
Given the Amp manufacturer cost would be around $5,000 that is the used price starting point.Add supply and demand you could double that!
My view is speculating but would like to know the actual figures for HI-END Amps? Am I on the right track?
:ninja:

Research - manufacturer cost %
Manufacturer profit margin %
Shipping- Custom duties %
Retailers profit margin %
Total %100
 
Hello all, first post here and I sure have enjoyed this provocative discussion. It seems like I go through a round of upgrading about once a year. I've sold on Audiogon (having just sold a Luxman L-550ax for $2,450 with one other piece up). I also really try to support my local dealers when as much as possible.

Of course I love music; but I really do love gear for its own sake and the electronics that underlie it. Every time I listen to an LP I get true enjoyment in just marveling that the sound is being generated by a needle tracing tiny bumps in a piece of plastic! But I do want to get to my 'end' system at some point. On the way, I have no apologies for sometimes selling cheap just to move an item out and looking for a really good deal.

I just obtained an amateur radio license (KD8ZGS) mainly because I do love 'components' of all sorts and plan on building quite a nice shortwave station as time permits. It is fun to look at the stations on the various ham radio sites.... some of those are magnitudes of order more complex than the craziest audiophile system. Maybe that will help my put my lust to always upgrade my stereo to rest.
 
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