I've been buying and selling used audio gear since 1975 and have been a member of audiogon since they first started their website. When Accessories For Less (A4L) and Audiophile Liquidators started up on the web I started picking up refurbished and b-stock gear from them also. I run a small integration business and will often mix new, used, b-stock and c-stock gear into the systems I build for clients to save them money and help subsidize their budget for my labor on custom installs.
I have found that if a piece of electronics is going to go bad, about 70% of the time it occurs in the first 30-90 days and about 20% of the time it occurs within the first year. Manufacturers know this also by tracking the returns and repairs of their products over the years. That's why most offer 90 days labor and 1 year parts warranty because it will capture 90% of defective units coming off the production lines.
It used to be that if the issue was minor, the buyer's unit was usually repaired under warranty at the store where it was purchased or at a local service center. All the large stereo chains of the 70's to the 90's had their own service departments and those that didn't contracted with several local repair facilities. As the internet ramped up, more and more equipment was purchased on line. If it failed the buyer would ship it back to the distributor who would simply replace it with a new unit and RMA the bad unit back to the manufacturer.
Eventually the internet overwhelmed most of the brick and mortar independent audio stores and they closed. All the old stereo chains (except maybe Best Buy or Magnolia) closed along with their service departments (I believe Best Buy and Magnolia ship most of their repairs back to the manufacturer). Many of the local authorized repair facilities have disappeared also. Im my area of Los Angeles I used to have a choice of five or six long established authorized service centers. Now they have all disappeared and the few that are left downsized to much smaller facilities and barely making ends meet.
Most people today buy on the internet. When it breaks they ship it to the manufacturer for a replacement.
The manufacturer will then fix the defect, give the unit a basic QC inspection, and put it out as b-stock usually to liquidators. In addition product cycle times have gotten much shorter. Home theater receivers used to have just Dolby 5.1. Then it was DTS and other codex added in. Today between the HDMI specification changing constantly and new surround formats being added regularly, a home theater receiver introduced in January at CES is practically obsolete by the time everyone's talking about the newer features announced in September at CEDIA. Those units are first discounted to compete then eventually end up at the liquidators to make room for new product.
For example, Anthony Gallo Acoustics is within 15 minutes of my shop. When they changed models from the Strada I to the Strada II they had pallets of the old speakers in the warehouse which were listed on their website as b-stock. I bought several pair for my clients over the last 4 months at the discounted price. Then Gallo offered them through the liquidators and what was left was gone in under 2 weeks.
I have had really good success with b-stock and refurbished equipment both in my own system and those of my clients. If that wasn't the case it would take too much time returning to my client's house to pull out the bad gear, install a loaner, repair the unit and return back to the job site to reinstall the repaired unit.
There are a few exceptions. Sometimes a manufacturer puts out a model that has problems from the beginning and wether you buy it used or new, you're going to have to deal with a repair. A classic example of this are the Onkyo SC5509 series revivers and preamplifiers. The manufacturer let the sealer that used on the mounted IC's to run all over the circuit boards in the HDMI module for most of the production run in China. When they were released, the units had HDMI switching problems from the beginning. Hundreds were RMA'ed back to Onkyo who swapped out a couple IC's (but never cleaned off the boards) before they were resold as B-stock). How do I know this? Because I went through three of these for myself and clients before noticed a thread on AVS with hmany of other people with the same problem. I sent them back to Onkyo for new IC's then had my tech carefully clean off the boards with solvent before reinstalling them. They have all worked flawlessly since then.
Another example would be the first two generations of the Marantz preamp/reveiver redesign with the "porthole" before the AV8801. THe HMDI modules on those give out also within the first two years and need replacing. Obviously Marantz picked up on it and resolved the issue because none of the AV8001 I've installed have malfunctioned.
On balance buying refurbished equipment and used gear saves a hell of a lot of money and lets one accumulate a system that performs way above their budget. Also, now that we have social networking sights like AVS, you can search AVS or google the internet to find out if a particular model that you are considering has any problems. Best of all, when the time comes to upgrade, you put it on audiogon and are not going to loose a lot of money between what you paid and what you sell it for.
Some gear retains almost all it's resale value. I've been buying used Adcom GFA 555II amplifiers since the 1980's. They sold used for $350 - $550 depending upon condition back then, and they sell for $250 - $450 depending upon condition right now 20 years later. I have seven of them in my home theater. I had to put in new power supplies after 10 years for about $200 but that's about it. I could sell them tomorrow for $450 and would have paid about $10 a year for enjoying them. I picked up a used Niles SL1230 12 channel distribution amplifier with only 3 channels working for $40 sent it back to niles for a factory refurbish at $400 and sold it to a client or $800 (which was a steal since a new SL1230 was over $1,200.
On turntables you might even make money. As vinyl has come back the cost of the newer manufactured tables has gotten ridiculous. Prices on vintage gear has shot through the roof. My old Lynn Sondek LP12, Infinity Black Widow Tone Arm and Koetsu cartridge I sold off when CD's came out would cost me the price of a used car to repurchase today. I stepped back into vinyl a few years ago by picking up a used Denon DP60L in great condition or about $350. It wasn't belt drive, the arm wasn't swappable and the tome arm leads were captured so I couldn't do any tweaking but the rosewood base was gorgeous and the table looked really nice in my living room. Then I got one for a friend at $450 off Craigslist, then another for $600 on audiogon, then another through ebay for $850 for a client. Yesterday I saw watched two DP60L's close auction on ebay for $1,120 and $1,250. I should have bought a dozen back when they were $350.
The few times I have had to spend a couple hundred dollars for repairs has been more that offset by the thousands of dollars I've saved buying used and refurbished.