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post #1 of 34 Old 05-23-2012, 10:40 PM - Thread Starter
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http://hometheaterreview.com/are-av-...end-av-prices/

I think that the story makes good points, ps sorry everyone for making so many post, instead of one large post. I will try not to post on here as much with so many questions. sorry if I offended anyone. i didn't mean to.
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post #2 of 34 Old 05-23-2012, 11:15 PM
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I completely disagree with his point of view. If these dealers didn't act like such complete a$$hats, profit margins weren't so completely blown out of the water, and performance data wasn't completely covered with voodoo, these companies and their dealers wouldn't be scrambling to survive.
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post #3 of 34 Old 05-24-2012, 06:55 AM
 
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I've been in this industry a while and there seems to be a lot of hatred towards dealers now adays. Everybody seems to think dealers are ripping them off. Well, I know a lot of dealers and I can guarantee they are not driving Ferraris, living in mansions and going out on their yachts on weekends. I think there are a lot of faults on both sides of the fence.

first some facts.

Profit margins are crap today. A dealer 15 years ago made more profit selling one $20,000 flat panel then they make selling fifty $1000 flat panels today. Want to know why dealers and big boxes are dropping like flies? Manufacturers are in a race to the bottom on price. It takes a lot more work to sell 50 items than one and you have to have the sales staff to do it. Even accessories which used to be high margin are not so much anymore. for example:

A pair of 3D glasses for a display MSRP $99, Dealer cost $70 plus shipping, internet price $75. Or another manufacturers glasses MSRP $99, dealer Cost $76 plus shipping, Internet price $69. These type of things used to be good profit margin items, not anymore!

What dealers want is to be able to compete with the internet. Small dealers can't buy these in bulk, like online or big retailers can. If you buy large quantities you probably buy direct from the manufacturer and get a volume discount. The small dealer buy through his distributor and often has a lot higher cost than big volume dealers. Many small firms have to rely on labor today to make their money, if they can't do an install with a product they won't sell it. A lot of dealers will tell you they lose money on a TV matching a price just to get the install. The fact is margins are down in every category from years ago. Believe it or not this is the truth.

You will see labor prices go up and you will see them start charging for every minute like lawyers do if they are not making much money on equipment. So if you are not a DIY type of guy expect to pay more for installs in the future. They are not ripping you off just trying to make a living.

On the manufacturers side of things. Marketing has never been so overblown. Specs that are nowhere near realistic. I seen tiny computer speakers the other day that said 1500 watts. Really???? I mean if they put out 10 REAL watts I'd be surprised. There is no standards for what they can print. A well respected industry professional once told us in a class. "The only specs I trust from a manufacturer are size and weight, the rest is marketing." This is very true of MOST (not all) manufacturers. There is a lot of snake oil in this industry which doesn't help either. Like putting your speaker wires on these special cups so they don't touch the floor will improve sound. Sorry, if I offended anyone that does this but I haven't seen any real world data that proves these help.

There is also a race to the bottom. We have more features now then ever but quality is way down. Don't expect the TV or whatever you buy today to last 20 years. We are in a throw away society. Today to get good quality you will pay a heft premium.

Since we talked about dealers not making money let's talk about what they are not doing right. In a word SERVICE. There is an old saying there a three aspects to selling a product. Quality, Price and Service, pick two.

A lot of dealers are just trying to make the sale now or if they are doing an install they are in and out as fast as possible. Good service is not returning a product from somewhere you bought on the internet and them not charging a re-stocking fee. Service is providing a loaner if something goes wrong, taking care of the exchange so the customer doesn't have to, etc. A good dealer should be able to do a proper set up, offer video and audio calibrations. How many TVs get installed in Torch mode? How many audio systems get set up and don't even run the auto set up/ EQ? Never mind doing a real calibration.

A good dealer will also direct you to the right solution for your situation. Will do an onsite evaluation. How does one know what will be the best solution if they don't know what the customer is trying to achieve?

For example we do a lot of acoustics work. A church called us and said they were having a problem with there bass. It was way too boomy. They did an online evaluation form with an acoustic company. That company came back with over $20,000 of their acoustic products to lower the bass in the room. We attended one of the church services and without taking out a piece of measurment gear we immediately knew the problem. The stage was hollow and acting like a resonating chamber, in essence making a big boooooomy subwoofer. We corrected the stage for a 1/4 of the cost that this company suggested. And there solution wouldn't have worked for this problem. Not everything can be solved over the internet.

The point is dealers need to have the knowledge and capabilities to provide good service.

The flip side of this is the consumers. Currently with most consumers price is king. Everybody else is ripping them off that has a higher price. It comes down to quality, Service and price again. If you don't need the service then go for the cheapest price of the quality you are looking for. This is great solution for experienced DIY.

The other thing I find with consumers is the belief that the higher priced stuff is a rip off. The JBL Synthesis system is just an over priced HTIB, they are just ripping you off. OK maybe an extreme example but you understand. There is also a belief that internet direct comapnies are the best value. I haven't found this to be true either and a number of these products have been tested on our benches. Some are a good value and some just keep more of the profits for themselves. There's one born every minute, Caveat Emptor.

As I ramble on in this post it is clear it is not a one way street. There are issues on the manufacturers side, the dealer side and the consumer side. The economy is difficult and unfortunately I think this trend will continue.

The negativity towards dealers and manufacturers is not always called for or shouldn't be generalized into blank statements. A good dealer can be your best friend and a bad one will put the screws to you. Finding a dealer you can trust is important.
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post #4 of 34 Old 05-24-2012, 07:50 AM
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I think Best Buy's only hope is to move away from electronics and into other things. Like offer more appliances or sell pianos. Things that are too big for a typical homeowner to deal with. They can't charge sales tax and compete with online retailers price wise. They'll be around for maybe 10 years or so before filing for bankruptcy, but I think it's inevitable they will.

All the smaller specialty electronics stores only hope is if they're in a town too small for a large competitor.

Wal-Mart works because their stores are huge and they can sell many more things than Best Buy. If I need something and I'm in the store buying something else, i'll pick it up in the store. It's too much hassle to go somewhere else.
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post #5 of 34 Old 05-24-2012, 09:41 AM
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The only dealer I have ever had loyalty to closed down about 2 years ago. Since then I have bought most of my electronics online. I loved my dealer because when I was 12 and I went to audio stores most salesmen just ignored me and would ask my grandpa if he needed anything. When he pointed to me and said I was the one looking they just said "ohh ok, let me know if you have any questions." I finally went to Custom Audio and a salesman actually spent a lot of time talking to me. After that I bought all of my Home Theater stuff from him and even got some of my family members to buy TVs from him. Once they closed I had no more loyalty to any dealers so I went online. I just can't see paying $500 on a Denon 1911 when I got my 3311 from Amazon for the same price. I do have one dealer that's about 30 minutes from me and I bought my Paradigms from them. I would hate to not have stores to go and listen to speakers because I spent a lot of time listening before making a purchase. I have noticed what BobL was talking about because some dealers won't work with you at all unless you are going to let them install it.
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post #6 of 34 Old 05-24-2012, 10:06 AM
 
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A place to demo equipment, what a concept Where are those places? Finding somewhere that has a good set up and knows how to give a great demo is tough to find. There is definitely an art to giving a good demo. To demo equipment is going to be a thing of the past soon

If I was buying a product and local guy had the same product for the same price as online, I would definitely buy from the local guy so that they would be there in the future. Even if it cost a little more with tax. I like to support local business when possible. Plus I don't like dealing with shipping if there is a problem. I might even spend a little more with a local dealer than online if he is a really good dealer but I won't spend a lot more.
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post #7 of 34 Old 05-24-2012, 02:02 PM
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Fry's certainly isn't your small local dealer however they are local and match Internet pricing everyday. In a lot of cases they beat it rather easily. One example is the Denon AVR-1712 as it was closed out at $227... and it's common to see them lower priced with current models too.

Sales tax wise Amazon recently agreed to collect sales tax in my state (within two years) so that advantage will be lost along the way... before long virtually everyone will be collecting it.
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post #8 of 34 Old 05-25-2012, 03:47 PM - Thread Starter
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You all make good points.
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post #9 of 34 Old 05-25-2012, 04:01 PM
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Quote:
Originally Posted by BobL View Post

A place to demo equipment, what a concept Where are those places? Finding somewhere that has a good set up and knows how to give a great demo is tough to find. There is definitely an art to giving a good demo. To demo equipment is going to be a thing of the past soon

Good concept. Charge $5 for 1 hr of demo or $25 for the whole day.
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post #10 of 34 Old 05-25-2012, 04:06 PM
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The author starts off very badly, coming off like a total idiot with this sentence:

"I still say the Oppo players wouldn't be what they are today, reaping the rewards of the influence of Harman's Lexicon's BD-30 and its THX certification."

Obviously, the BDP-83 was raved about as the first universal disk player (SACD/DVD-A/all the current video formats) and lauded for its impressive measurements well before Lexicon reboxed it. I don't think Oppo gained anything from the mess, though Lexicon did lose some luster as people wondered why a company like Harman couldn't just make their own universal disk player and share it amongst their lines. It made them look greedy and weak at the same time.

Lexicon's brass may have learned something from the OppoCon fiasco. I wonder if it didn't change some plans for the Lexicon DD-8 amp. As it stands right now, their DD-8 costs about the same as its near-twin, the Crown CT8150. (There is a difference between the units beyond the faceplate: the Lexicon has standard consumer unbalanced RCA inputs, whereas the Crown has balanced Phoenix terminal inputs. Both have Phoenix terminal speaker outputs.) Certainly, if Lexicon thought they could charge more, they would. Any rational business would. But right now their reputation's a bit tarnished by the OppoCon fiasco, so they can't.

The author actually does eventually back into a good point, though, even though I don't think he's smart or self-aware enough to realize it: if dealers want to exist, they should add value rather than just serving as a conduit for parts to consumers. The internet and USPS/FedEx/UPS/DHL just plain do a better job of getting various parts in people's homes.

That is to say, audio parts dealers need to spend more time learning how to take competent measurements and apply them to installing systems in small rooms than they do learning about whatever idiot propaganda the latest cable scammer comes around with and parroting it to customers. Some customers, after all, have sufficient self-regard and low tolerance for being hustled that, if the dealer moves to change wires and claims that one needs to "listen" to the difference, they will just walk out disgusted, without buying so much as a record or magazine. And they might even tell other people that the dealer is a cheap scammer to be avoided.

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post #11 of 34 Old 05-25-2012, 04:07 PM
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Quote:
Originally Posted by keyboardcat View Post

http://hometheaterreview.com/are-av-...end-av-prices/

I think that the story makes good points, ps sorry everyone for making so many post, instead of one large post. I will try not to post on here as much with so many questions. sorry if I offended anyone. i didn't mean to.

The internet forums also play a big part.
For example, i would go to the dealer, demo some equipment, get a recommendation, but the to be safe, i google that recommendation and of course i will find quite a few negative reviews and then i am turned off from the sale.
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post #12 of 34 Old 05-25-2012, 05:04 PM
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best thread I've read in a LONG while
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post #13 of 34 Old 05-25-2012, 05:11 PM
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A couple of years ago I went to three local hi-end dealers.

At one place, I went in just to browse their very expensive offerings. They let me look around freely with no pressure whatsoever. They even offered me a beer as I sat and listened to some stuff that we all knew I wasn't going to buy. (I politely declined the beer, by the way.) Most of their stuff was way out of my price range, but I found a pair of speakers on consignment that I liked, and I bought them.

At a second place, as soon as I got in, the guy asked what equipment I had. When I listed it, he said it was nice, but said I needed some high-end speaker cables to get the most out of it. I left pretty quickly and didn't buy anything - and won't.

At a third place, as soon as I got in, the guy started telling me how much benefit high-end power cables can provide. Didn't buy anything there either and likely never will.

For every new thing I learn, I forget two things I used to know.
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post #14 of 34 Old 05-25-2012, 06:10 PM
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The problem I found when looking at these high end A/V stores is finding people who knew what they were talking about, or anything at all about what they were selling.

I used to have one place around where I live that were great. Good support really knew what they were doing, great and easy to deal with. They did quite well also, but then I think it changed owners and the people who used to work there left and they changed locations. I have checked it out a couple times since, and it's terrible, I haven't been by in a while I don't even know if it is still open. But the couple times I checked, no one was in there, the two people working there didn't bother to get up or say anything when I walked in. The things I was there to check out weren't even plugged in to demo even though they were sitting in the demo spaces. But considering how it was setup I couldn't have gotten a good demo anyways.

Most that I have been to have the equipment setup and sometimes even very well, but the people trying to sell the equipment have no clue. I do have some rather funny and sad stories about some of the ones I have been in, maybe another time.
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post #15 of 34 Old 05-25-2012, 06:44 PM - Thread Starter
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I am curious about these stories darkhorror.
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post #16 of 34 Old 05-25-2012, 07:33 PM
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I think it's a personal opinion piece not really backed up by any facts.
- The fact that two products happen to be manufactured in the same factory doesn't make them the same product. But having said that, there has been tremendous consolidation in the industry and there are many products that are virtually the same or if different, use largely the same design approaches and/or ICs. Although the following may have changed for 2012, as of 2011, Pioneer and Denon AVRs below $1299 list were designed and assembled by Inkel, the parent company of Sherwood. Onkyo AVRs below $1499 list were designed by an independent Korean team which also did design for Harmon/Kardon. However, the Onkyos were assembled in their own Malaysian factory while the HKs, NAD, Marantz and Teac products were assembled in the same Chinese factory (but again, that doesn't mean that they're the same design or eve use the same parts).

But if anything, the above demonstrates that the top-of-the-line products are distinctly different than the bottom of the line products.

- On mass market products, even top of the line mass market products, dealer margins are incredibly small and that's one of the main reasons (aside from big box and internet competition) that local independent dealers are going out of business. When I worked in the audio industry in the 1970s, we used to give a 30% discount to the customers just for buying a system (turntable, 2 speakers and a receiver), so our wholesale price was no more than 50% of list. Today, many manufacturers are approaching a 10% margin for the dealer. The average dealer makes more selling you a package of overpriced cables than they do selling a TV or receiver. This is true in the photo market as well. Nikon's 2012 pricing is just a 10% discount for the retailer. Most independents make their money on installation and other services, not on selling you the products.

For big retailers, most of their profit is in cash management - the float from the time they get paid either by the consumer in cash or by the credit card company and the time they pay the manufacturer. Since interest rates are so low these days, there's not much there. In the old days, you could make 1 to 1.5% a month. That's not a bad return on investment.

- Where I do agree with the article is that some (certainly not all) of the esoteric audio market is a sham. While I understand that a hand-crafted speaker from a small company might only sell a few hundred units a year and therefore has to be priced very high, many of the esoteric components that I've seen/heard sound like crap and aren't worth the money. In many cases you are paying for hype. But I think that's also true for a wide range of products including expensive fashions (saw a bunch of informal $3000 summer mens suits in the Times the other day), cars, watches and many other products.

- One of the things that we've lost (except perhaps in the esoteric audio market) as compared with the "hi-fi" industry of the 1950s to 1970s is that in those early companies, the owners were also the lead designers of the products and each company's products had a fairly distinct design approach and sound that was consistent with the owner's design philosophy. When they weren't distinct, it was because the designers moved from one company to another. So we had people like Edgar Vilchur, Henry Kloss, Avery Fisher, Paul Klipsch, H.H. Scott and many others. Today, those that have survived are just brands of big companies.

- While price doesn't necessarily determine quality, to claim there are no differences is to be completely naive. It's like claiming that there's no difference between a McDonald's hamburger and a burger prepared in a fine restaurant with meat from Pat LaFrieda.

- There are tremendous differences in dealers. I've been in some esoteric high-end audio stores where the sales people are elitist and obnoxious. Then you have dealers like Value Electronics in Scarsdale, NY who runs those shootouts every year where at his own cost, brings in industry speakers and the best calibrators. They held one last weekend and there's lots of video of the sessions posted on their website. The owner will spend as much time with you talking about a $200 speaker as he will talking about an $8000 plasma.

- However, the biggest factor in whether independent dealers can survive is us. If we continue to buy from the big-box chains (which for the most part, in spite of their reputations, actually DON'T have good prices) or buying from unauthorized dealers on the internet to save $20 or giving all our dollars to Amazon, then the dealers most certainly will not survive. We've already lost the record stores, we're losing the bookstores and we're going to lose these quality A/V dealers as well. What's going to be left on our Main Streets and downtowns are banks, drug store chains, check cashing places, gas stations, liquor stores, fast food restaurants, Starbucks and a lot of empty stores. Is that what we want?

- IMO, it's unlikely that Best Buy can survive. There are too many people who walk into Best Buy (and stores like it), "test drive" the products and then go on the internet and find a slightly cheaper price. It almost (but not quite) makes me feel sorry for them.
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post #17 of 34 Old 05-25-2012, 08:29 PM
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I am one of those buyers with a solid tech background and I absolutely HATE it when I go into [insert dealer store here] and they try to sell me some straight up BS about how I need their patented {bullcrapifier here} to get the most out of my system.

People are turn off when they are flat out lied to and really hate it when they are fed a line of BS

most dealer are like used car salesmen imho.....

Strong or weak in the end we are all dead
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post #18 of 34 Old 05-25-2012, 08:34 PM
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Unfortunately there are no longer any A/V dealers in my area that I visit. The last time I went to a "highend" store outside of Boston I was looking at Dynaudio Focus 140s. I demoed them and then called the dealer back to order them. Well the salesman never called me back after leaving two messages saying I wanted to buy the 140s.

I eventually bought the 140s used and saved about $400. I also found that in store demos really can not compare to demoing gear (especially speakers) in your own home. So now I mostly buy online whether it is new or used gear. It is too bad as I have fond memories of when I was in high school visiting Tech Hi-Fi in the Boston area.

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post #19 of 34 Old 05-25-2012, 09:34 PM - Thread Starter
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Bill Mac I have emailed several stores in a row asking what they have. Most of the time 3 out of those 6 to 10 stores that I email actually write me back. I may ask something simple like do you have this brand to demo? Do you carry this model? No response sometimes.
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post #20 of 34 Old 05-27-2012, 01:22 PM - Thread Starter
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mjpearce023 that is good that a dealer didn't look at you as just a kid, but as a decision maker. I see teens spend a lot of money on hi fi equipment sometimes, with that summer job like mowing lawns etc. It is nice mjpearce023 that you found another good dealer 30 minutes away.
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post #21 of 34 Old 05-28-2012, 09:07 AM
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First let me say interesting article/forum. I have recently visited online shops and local dealers. I recently saw item A for $1600.00 (quoted). I then saw the same item online for $1,000.00-$1,100.00. I now ask which would you buy?
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post #22 of 34 Old 05-28-2012, 09:13 AM
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Up until when I went to college, I worked in my family's Mom and Pop electronics store. We need to buy a new receiver and I felt the need to give the local independent dealer a try.

Unfortunately, I was disappointed with the experience. I told him about a Yammie receiver I wanted to buy (the RX-V573) and he just wasn't eager at all to sell to me. His price was fine, but his attitude was poor. I understand it was a small sale and he would have to order the item, but I wanted to be his customer but he was simply not that involved with the process.

So at this point, I am probably going to go with a local chain store that has a smoking price on the AVR-1912 from Denon.

I am still interested in supporting the local dealer and we did get a set of headphones from there, but I guess I have to a be a really big ticket item buyer to get his interest.
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post #23 of 34 Old 05-28-2012, 09:20 AM
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There are still a few good dealers in the Boston area...Audio Concepts in Boston and North Attleboro are decent guys that carry quality brands. They are one of my favorites. Natural Sound in Framingham is pretty good too, but can be snobby. Goodwins High End is just that.... serious high end stuff, but you can also put together an awesome affordable system there. I bought my sub there a few years back and they treated me great, not to mention $200 less than Natural Sound.

I feel that all three of these dealers spent a decent amount of time answering questions and demoing gear.
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post #24 of 34 Old 05-28-2012, 09:39 AM
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I blame a lot of this on the economy and then there is stores that try to hard to push the customer into unnecessary gear which will kill a second sale in a heartbeat.
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post #25 of 34 Old 05-28-2012, 10:58 AM
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Quote:
Originally Posted by Bill Mac View Post

Unfortunately there are no longer any A/V dealers in my area that I visit. The last time I went to a "highend" store outside of Boston I was looking at Dynaudio Focus 140s. I demoed them and then called the dealer back to order them. Well the salesman never called me back after leaving two messages saying I wanted to buy the 140s.

I eventually bought the 140s used and saved about $400. I also found that in store demos really can not compare to demoing gear (especially speakers) in your own home. So now I mostly buy online whether it is new or used gear. It is too bad as I have fond memories of when I was in high school visiting Tech Hi-Fi in the Boston area.

Bill

I emailed a local dealer, inquiring about what model Paradigms they had available to demo in their shop. I received absolutely no response. When I read this thread, that is what it reminds me of.

What comes to mind is the (crazy) idea that any business would want to turn down a potential sale.
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post #26 of 34 Old 05-28-2012, 11:37 AM
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I dunno, I've seen hi if stores treat customers as if their stupid since the 80s. I compare them to car dealers. You have some who really love their job and enjoy auditioning gear with customers. You also have the guys who enjoy educating consumers and trying to steer them in the best direction.

But, you also have the slimey ones who are out to screw you. The economy of now seems to have more impact on them than before. You really can't go into these types of stores expecting cut rate deals. Once you prove your loyalty to a dealer, you generally get very good pricing. It's quite easy today to goto a dealer for education while saving on pricing buying online. I think if the dealers weren't so strict on trying to push gear at msrp, they would do better business. However, they do have overheard and not much floor space.

I would honestly be surprised if best buy was in business after 2014.... And for Frys, they are notorious of placing customer returns, untested... Back on the shelves. They mostly sells crap. Frys really went backwards in 2001.
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post #27 of 34 Old 05-28-2012, 03:04 PM - Thread Starter
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What is this Frys store that I keep hearing about? Is it mainly in the south, midwest, west coast? I never saw one in the north east. Are they like best buy kind of?
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post #28 of 34 Old 05-28-2012, 03:07 PM - Thread Starter
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true oztech the economy is still pretty bad. A local pizza place that I used to like to eat at, didn't make it a year. i think that by the end of this year some small audio shops might close, because of the economy.
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post #29 of 34 Old 05-28-2012, 03:08 PM - Thread Starter
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I agree with you bo130 the dealers should email you back. it happened to me several times.
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post #30 of 34 Old 05-28-2012, 03:46 PM
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Quote:
Originally Posted by kawie01 View Post

First let me say interesting article/forum. I have recently visited online shops and local dealers. I recently saw item A for $1600.00 (quoted). I then saw the same item online for $1,000.00-$1,100.00. I now ask which would you buy?

I would give the local a chance to price match. I did this recently and the local knocked $900 off of the package deal for the speakers I was getting. I almost didn't shop around online as he was already giving me a better deal than a lot of the places I had looked at online. Boy am I glad I did shop around a bit more. I will definitely be going back to him for any other electronics I plan on buying.

Turn it up!
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