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Tweeter closing down all California stores! - Page 6  

post #151 of 401
Quote:
Originally Posted by WestCoastD View Post

Now I'm seeing news of Circuit City announcing 3500 lay-offs:
http://www.audioholics.com/news/indu...3500-jobs.html
The world really is coming to an end I guess.........

We missed it, remember, it was suppose to happen 1-1-2000

But seriously, the likes of BB, CC, TW, where price is king, if one drops prices low enough the profit margin skrinks to nothing, even when wages are near min.
I think BB was hedging their bet when they bought Mag.
Low end out in the main store, better quality gear in the Mag corner. But still they leave a lot to be desired, sales people in the Mag corner don't know what they are talking about anymore than the sales people on the main floor.
And as far as I'm concerned, the Mag corner could do with a better selection of gear and speakers.
In this part of NV. there is a lot of brands that never make the shelf.
post #152 of 401
Thread Starter 
Quote:
Originally Posted by WestCoastD View Post

Now I'm seeing news of Circuit City announcing 3500 lay-offs:
http://www.audioholics.com/news/indu...3500-jobs.html
I don't care what the details are ("wage management initiative", etc.,..) it's still a lay-off and it ain't good. The world really is coming to an end I guess.........

IMO Circuit City will be done in about 3-5 years. They cannot compete with Best Buy.

I imagine the market will consist of Best Buy and Walmart as the major big box, and then a few independent guys. Showrooms will disappear all over the country, and there will be only 1-2 dealers in each city.

Some companies will start to go direct and do more co-marketing with exclusive dealer territories to protect price and margins, which is very very common already with super high-end audio companies. Internet direct DOES NOT reduce pricing, it increases prices by eliminating alternatives.

For instance and this is just an example. Energy will sell direct for full retail, but only appoint 1-2 authorized dealers per state (depending on the state) as an authorized displaying dealer to maintain proper representation and distribution, and still offer a place for people to look at something.
post #153 of 401
Quote:
Originally Posted by AudioArchitect View Post

I imagine the market will consist of Best Buy and Walmart as the major big box, and then a few independent guys. Showrooms will disappear all over the country, and there will be only 1-2 dealers in each city

yeah, it's definitely dwindling down to less than a hand-full

Quote:
Originally Posted by AudioArchitect View Post

Some companies will start to go direct and do more co-marketing with exclusive dealer territories to protect price and margins, which is very very common already with super high-end audio companies. Internet direct DOES NOT reduce pricing, it increases prices by eliminating alternatives.

For instance and this is just an example. Energy will sell direct for full retail, but only appoint 1-2 authorized dealers per state (depending on the state) as an authorized displaying dealer to maintain proper representation and distribution, and still offer a place for people to look at something.

interesting, could be right. Obviously reducing overhead cost's allow for manufacturer to profit more (or survive).

I hope Energy is able to move forward with the same engineering capability (forward-moving), and be completely ruined by Klipsch.
post #154 of 401
Quote:
Originally Posted by 4DHD View Post

We missed it, remember, it was suppose to happen 1-1-2000

yeah, we'll all be wearing smocks and eating Soylent Green by 2008
post #155 of 401
Quote:


For instance and this is just an example. Energy will sell direct for full retail, but only appoint 1-2 authorized dealers per state (depending on the state) as an authorized displaying dealer to maintain proper representation and distribution, and still offer a place for people to look at something.

If so, I can't see Energy staying viable for long.

Designing and marketing speakers is an odd business. I cannot think of another consumer product with so many players and so many price points. I guess Bose is dominant, but I doubt their market share reaches double digits.
post #156 of 401
Thread Starter 
Quote:
Originally Posted by WestCoastD View Post

yeah, it's definitely dwindling down to less than a hand-full

interesting, could be right. Obviously reducing overhead cost's allow for manufacturer to profit more (or survive).

I hope Energy is able to move forward with the same engineering capability (forward-moving), and be completely ruined by Klipsch.

Well we used to "floor" Energy products, but I got tired of competing, or I should say not being able to compete with Good Guys closeout prices. So we moved on.

Now, Energy doesnt have a flooring dealer in a city of 10 million people in one of the wealthiest cities in the country. Thats the reality of our business, as sad as it is.
post #157 of 401
Quote:
Originally Posted by ericgl View Post

I guess Bose is dominant, but I doubt their market share reaches double digits.

Bose is *almost* as big as all of the other companies combined, last I checked. I think they have something like 35-40% of the market. They're over a $billion/year, the next biggest is more like $300M and goes down hill fast. These numbers aren't close to exact, but you get my point.
post #158 of 401
Circuit City is in downhill spiral mode. When I worked at a store in college, it took me about a month to master the art of selling up to higher quality and then setting it up so that the people would walk out with twice the quality and half the gear and then return for the other half. Those people probably remained enthusiastic about audio and came back over and over. The people that left with rack systems, well, they're pretty well gone after that. Why spend more if you've been taught to have low expectations?
post #159 of 401
Quote:
Originally Posted by AudioArchitect View Post

Now, Energy doesnt have a flooring dealer in a city of 10 million people in one of the wealthiest cities in the country. Thats the reality of our business, as sad as it is.

I think there's going to be a huge consolidation over the next 10 years. There just won't be enough stores to support all these brands. There should be about 25 or 30 speaker companies for the amount of dealers and there's more like 150 or 200. What other industry has this much brand confusion? Name one!
post #160 of 401
Thread Starter 
Quote:
Originally Posted by WestCoastD View Post


interesting, could be right. Obviously reducing overhead cost's allow for manufacturer to profit more (or survive).

Thats exactly right!

This is a common misconception that internet direct results in cheaper prices. That is completely wrong. All it means is that the manufacturer can retain margins with a relatively wide distribution, which as you can see IS CLOSE TO IMPOSSIBLE with tradional manufacturers. If it wasnt an issue then we wouldnt be discussing the demise of Tweeter.

Internet direct companies do not sell for less money, they sell for what they believe the market can sustain as ANY other traditional company does. Traditional companies can actually be much BETTER values, because these companies have to strive for more because they are comparison-shopped everyday by the average consumer in a store, plus consumers can get a price break sometimes by going with a certain retailer. Whereas, most people that buy internet direct speakers dont do thorough side by side comparisions, they rely on the "opinions" of people (surprise surprise) on the internet!

The speaker market is close to impossible to penetrate without huge amounts of capital, and internet direct companies dont have this kind of capital. They CAN be good products but they are priced fairly as any traditional product with a few exceptions of course. If they could ask more money for their products they could.

Most traditional speaker companies cannot compete in America without an investment firm behind it. For example B&W, Paradigm, Anthem, Martin Logan, Mcintosh, Denon, etc etc they are not privately owned but instead owned by largely by an investment firm.
post #161 of 401
Thread Starter 
Quote:
Originally Posted by Alimentall View Post

I think there's going to be a huge consolidation over the next 10 years. There just won't be enough stores to support all these brands. There should be about 25 or 30 speaker companies for the amount of dealers and there's more like 150 or 200. What other industry has this much brand confusion? Name one!

Im thinking and thinking. I will have to get back to you on that one!
post #162 of 401
Quote:
Originally Posted by Alimentall View Post

Bose is *almost* as big as all of the other companies combined, last I checked. I think they have something like 35-40% of the market. They're over a $billion/year, the next biggest is more like $300M and goes down hill fast. These numbers aren't close to exact, but you get my point.


I'm shocked, I guess PT was right.
post #163 of 401
Thread Starter 
Wait!

I thought of one!

The WINE industry! When I walk into a grocery store, you couldnt pay me to tell you all the differences between the different wines. My head spins when I look at all of them.

Im sure thats a blasphemous thing to say to some of you wine-lovers out there.
post #164 of 401
That's probably the big one! In fact, it's probably about the only one that's *worse*. I think of wine as a relaxer more than a test of my taste buds and Trader Joe's is my savior. I haven't spent more than $5 for a bottle of wine there yet I was joking last night with my GF that it would be a blast to set up a huge wine cellar, but stocked with $3-$5 bottles of wine
post #165 of 401
Quote:
Originally Posted by 4DHD View Post

If someone is buying expensive gear, and most certainly speakers, I would hope he already has a decent room. No bare wood floors, fabric covered chairs, not leather, fairly thick drapes over the windows, etc.

It wouldn't occur to most people on their own to change their room that way so it would sound better. Many wouldn't want to, even if their wife would let them.
post #166 of 401
Quote:
Originally Posted by buzzy_ View Post

It wouldn't occur to most people on their own to change their room that way so it would sound better. Many wouldn't want to, even if their wife would let them.

Most people DO have carpet thru out and drapes and fabric covered chairs. Some houses do have wood floors, but few have it for the entire house.

Ya, if one trys to set up a sound system in a room that has vase amounts of windows to take in a particular view and no drapes they're going to get an overly LIVE room. My suggestion, use another room.

But in a normal room you don't need to go over board on the room treatments, just drapes, carpet and padded chairs and break up long walls with paintings or what have you.
post #167 of 401
Quote:
Originally Posted by Alimentall View Post

Trader Joe's is my savior

funny you mention Trader Joes, I live next-door to the original tiny store (South Pasadena), talk about a "sleeping giant" of a business. This store, is the first of two original stores (the other nearby in Pasadena). They used to be called "Pronto Market", and had a full sandwich bar, natural juices, nuts, imported and domestic coffee's, wines, sweets, etc.,..Eventually they opened several other stores in and around southern and northern california and called them Trader Joes (named after their creator Joe Colonge- a european buyer). Now they are nation-wide (would have never ever concieved of it). They are one of the biggest wine buyers/distributors nation-wide.

Their headquarters is a small un-assuming (single-level, residential looking) commercial office space across the street. However, they just completed a 6-story high-rise 13 miles away in Monrovia, and have moved their operation headquarters.

People are crazy about Traders, my store is like an endless revolving line of shoppers.
post #168 of 401
Quote:
Originally Posted by Alimentall View Post

Bose is *almost* as big as all of the other companies combined, last I checked. I think they have something like 35-40% of the market. They're over a $billion/year, the next biggest is more like $300M and goes down hill fast. These numbers aren't close to exact, but you get my point.

Harman International did over $3 billon last year. Not all of that was speakers but that was a big part of it.
post #169 of 401
Quote:


My question, if they were very expensive speakers, why weren't they setup properly in the first place?
$79 speakers in BB, sitting on a metal shelf, I would not except to be setup properly. But they are, lets say, $2000/ea +/- range and up, they better be setup right.

Speakers are, unfortunately , often moved around and systems reconfigured and due to constraints of time and scatterbrained co-workers who don't get things back to the way they are supposed to be. I have some I know in this business say that this is one (small) reason that "by appointment only" shops can do very well at presentations. They can have their killer demos nailed down in advance and be certain that nothing is discombobulated by the lookie-loos.
The point is can you get it together when neccesary, I usually ask people who pop in that if I don't have what I'd like to show them set up already , would they mind having a cup of coffee and watching a music dvd they can choose off our Kaliedescape menu in one of our five theater rooms. That usually buys me enough time to do whatever I need to get everything set right.

Quote:


If someone is buying expensive gear, and most certainly speakers, I would hope he already has a decent room. No bare wood floors, fabric covered chairs, not leather, fairly thick drapes over the windows, etc.

You could hope, but you'd be more often disappointed.

Quote:


But if a person has little knowledge of a product, in this case speakers, as far as setting them up, and buys speakers off the internet, unheard, doesn't he have the same problem as the guy that hears speakers in a store, that were not setup properly?

Again if he bought something that he heard that were set-up wrong or in a bad room , I don't understand why...I would hope the point of a demo is to be impressed enough to purchase.
However, I always talk to my customers about their room (and often visit it) and when I hear things from them or observe in person things that I believe should be adressed, I can offer MANY suggestions to them and their S.O. that can improve acoustic problems.
Quote:


Does he return them? Most likely so.

Some will call and ask me to visit, listen, and offer suggestions. I will offer several possible cures for the room and only after they say that they don't want to do any of them do I look to change equipment to counter-flavour/re-eq the room . Sometimes I recommend electronic fixes , sometimes new speakers, but I always ask how long they'll be in the room and how long it will be laid out /decorated this way.

Quote:


This leaves an ever thinning group of mid to high income customers who are willing to pay more for better service and gear.

In the several differant , distinct markets I've worked in, this group is GROWING not thinning.
post #170 of 401
Quote:


Designing and marketing speakers is an odd business. I cannot think of another consumer product with so many players and so many price points.

I think of furniture that way.
post #171 of 401
Quote:
Originally Posted by AudioArchitect View Post

Thats exactly right!

This is a common misconception that internet direct results in cheaper prices. That is completely wrong. All it means is that the manufacturer can retain margins with a relatively wide distribution, which as you can see IS CLOSE TO IMPOSSIBLE with tradional manufacturers. If it wasnt an issue then we wouldnt be discussing the demise of Tweeter.

Internet direct companies do not sell for less money, they sell for what they believe the market can sustain as ANY other traditional company does. Traditional companies can actually be much BETTER values, because these companies have to strive for more because they are comparison-shopped everyday by the average consumer in a store, plus consumers can get a price break sometimes by going with a certain retailer. Whereas, most people that buy internet direct speakers dont do thorough side by side comparisions, they rely on the "opinions" of people (surprise surprise) on the internet!

The margins of ID brands and B&M are not all that dissimilar. Generally speaking, ID is higher, but on far less volume. Remember, when it comes to speakers, for every pair sold by an ID, ten are sold by B&Ms. Speaker sales aren't killing Tweeter, TVs are.

I'm not in the business, but I don't think traditional companies see themselves in competition with ID brands and vise-versa. There are people that shop on line and people who don't. Look at the this vs. that posts on this board. They are virtually all traditional vs. traditional or ID vs. ID. The fact that traditional brands are "comparison-shopped" has absolutely nothing to do with value. Just as the fact that ID brands rely on "opinions" has nothing to do with value. Value is about price vs. performance.

The traditional dealer supported model is broken. And when business models break, they don't get fixed, they die. That's not a bad thing. I actually prefer my SUV to the horse and buggy. Yet 100 years ago, people were running around trying to ban the automobile citing the loss of jobs in the blacksmith and oats industry.
post #172 of 401
Quote:


I'm not in the business, but I don't think traditional companies see themselves in competition with ID brands and vise-versa. There are people that shop on line and people who don't. Look at the this vs. that posts on this board. They are virtually all traditional vs. traditional or ID vs. ID.

Hmmmm, interesting observation.
Quote:


The fact that traditional brands are "comparison-shopped" has absolutely nothing to do with value.

Direct personal comparisons are an absolute way to determine value...the better product at a similar price wins.
Quote:


Just as the fact that ID brands rely on "opinions" has nothing to do with value. Value is about price vs. performance.

Performance is relative...performance in relation to what? OTHER similarly priced gear, whichever sounds better to you is the better performer.
post #173 of 401
Thread Starter 
Quote:
Originally Posted by pelcodan View Post

The traditional dealer supported model is broken. And when business models break, they don't get fixed, they die. That's not a bad thing. I actually prefer my SUV to the horse and buggy. Yet 100 years ago, people were running around trying to ban the automobile citing the loss of jobs in the blacksmith and oats industry.

I dont thinks its quite the same thing, but an interesting analogy nonetheless!
post #174 of 401
Quote:
Originally Posted by Schadenfreude View Post

Direct personal comparisons are an absolute way to determine value...the better product at a similar price wins.

Performance is relative...performance in relation to what? OTHER similarly priced gear, whichever sounds better to you is the better performer.

I agree 100%. What I disagreed with was the assertion that B&M brands offer better value because they are placed in direct comparison situations on in a demo room as opposed to ID brands which are not. That's silly. B&M brands at big box retailers can compete with ID on price. B&M brands through custom installers and boutiques can compete with ID on quality. But B&M brands from any source have a hard time competing with ID on value. The channel added costs literally make it an apples vs. oranges argument. And if the B&M brand is European or Canadian, the weak US dollar alone has added 30% to their MSRP in just the past three years. That's a tough sell if you're selling on value.
post #175 of 401
Thread Starter 
Quote:
Originally Posted by pelcodan View Post

And if the B&M brand is European or Canadian, the weak US dollar alone has added 30% to their MSRP in just the past three years. That's a tough sell if you're selling on value.


Americans enjoy the lowest prices on audio equipment actually. I have people from Europe that tell me speakers like Dynaudio and Focal, and components like Arcam are far more expensive in Europe where they are from.
post #176 of 401
Quote:
Originally Posted by AudioArchitect View Post

Americans enjoy the lowest prices on audio equipment actually. I have people from Europe that tell me speakers like Dynaudio and Focal, and components like Arcam are far more expensive in Europe where they are from.

That's due to taxes, not exchange rates. The EU nations have Value Added Taxes of up to 20% that act as sales taxes. That 20% is tacked on the distributor, the market rep, the dealer and the consumer. The same products can move through those channels in the US tax free. That's a major reason we import far more than we export. As to exchange rates, check out US reviews of Euro or Canadian speakers in 2003 and note the MSRP. A $999 speaker pair back then is $1299 today. That's not inflation, it's US currency devaluation. I should add that this does not apply to China, where the Yuan is pegged to the Dollar, much to the frustration of economists and policy makers. Chinese products are immune from US Dollar fluctuations.
post #177 of 401
Quote:


But B&M brands from any source have a hard time competing with ID on value. The channel added costs literally make it an apples vs. oranges argument.

Economy of scale and relatively small profit taking can offset all of that and then some, but the point is, because most aren't public companies, we'll never know, nor does it matter, your ears in direct comparison situations are the sole and absolute judge of relative value.
It's also difficult to quantify the improved quality of design that a company that has huge resources and loads of experiance can bring to the table, but again, the only way to judge and KNOW is to directly compare.
post #178 of 401
Quote:
Originally Posted by AudioArchitect View Post

This is a common misconception that internet direct results in cheaper prices. That is completely wrong. All it means is that the manufacturer can retain margins with a relatively wide distribution, which as you can see IS CLOSE TO IMPOSSIBLE with tradional manufacturers. If it wasnt an issue then we wouldnt be discussing the demise of Tweeter.

Internet direct companies do not sell for less money, they sell for what they believe the market can sustain as ANY other traditional company does. Traditional companies can actually be much BETTER values, because these companies have to strive for more because they are comparison-shopped everyday by the average consumer in a store, plus consumers can get a price break sometimes by going with a certain retailer. Whereas, most people that buy internet direct speakers dont do thorough side by side comparisions, they rely on the "opinions" of people (surprise surprise) on the internet!

Umm, NO. It is totally a value argument. I've recently listened to a ton of "traditional" speakers, ranging from $1200/pair down to a few hundred. I listened to one ID speaker company (Ascend) where depending on model a pair of speakers cost $600 or less. The only speaker that I thought was in same class as Ascends was a pair of Focals that iirc were $1100. Next closest for me were PSB Image B25s that are $479 I believe. Lots of other brands (Klipsch, DefTech, B&W, Paradigm, Monitor, NHT, Polk) were just not in same league. So for me the Ascends are great speakers and great values, the Focals are just great speakers.

Is Ascend making more profit $ per speaker than traditional companies? Don't know and don't care. I care about value that I receive. Simplisticly, if speakers cost $200 to make and an ID company sells for $300 they have a 50% margin. If a traditional company sells $200 to produce speakers thru a distributor and a retailer they may only get $250 back (25% margin) and the speakers may sell for $350 because others a taking a piece of the profit. I know this model is obvious, but when I see lots of people posting the ID is not cheaper I get very confused. That statement is not wrong, but simply inadequate. ID can provide better value because of the elimination of distribution and retail. It doesn't have to, but the potential to deliver value is pretty high.

And if ID companies are in fact making more profit per unit than traditionals I believe it benefits consumers. Ascend can put some of that money back into R&D and ultimately offer better speakers. What benefits to consumers did Tweeter's profit dollars per speaker sold bring? I know, semi-adequate listening areas.

I'd rather have the ID guys making better speakers in an effort to outdo each other and audition what I think I want in my home.
post #179 of 401
Quote:
Originally Posted by Schadenfreude View Post

Hmmmm, interesting observation.

Direct personal comparisons are an absolute way to determine value...the better product at a similar price wins.

Performance is relative...performance in relation to what? OTHER similarly priced gear, whichever sounds better to you is the better performer.

Agreed, but how and where can an aficionado perform such compairisons?

In my area:
Store A carries Def Tech, Maggies, Vandies, and Linn.
Store B, B&W and Dyn.
Store C, Paradigm and Focal
Store D, Monitor, Gallo, Klipsch, and Triangle

So how can I directly compare B&W to say Focal? I can think of several worthy B&M brands I have no chance of auditioning, let alone directly comparing. Are other areas of the country better?
post #180 of 401
Quote:
Originally Posted by Alimentall View Post

I was joking last night with my GF that it would be a blast to set up a huge wine cellar, but stocked with $3-$5 bottles of wine

About the same fun as setting up a big custom HT room with a $300 HTIB, I think.
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