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Markup Determined by Manufacturer

477 Views 0 Replies 1 Participant Last post by  PHILE
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so basically you want to throw out a successful business model that many manufacturers have been using for many years (klipsch for over 50 years!!!) just so you can buy a product for less money online!!!


in your "scenerio", what is to stop everyone from using the local services of the b&m stores - auditioning, learning about the product, finding out which product is right for their particular situation, etc.... and then going home and ordering the exact same product online for alot less?


despite all your convoluted "logic", it all comes down to the fact that you are not willing to pay what B&M stores are charging


this discussion has come up more than a few times on this forum and on many other forums - and ultimately it comes down to people whining about the price - they want to pay less than the going rate


either pay for the speaker (or whatever) at the best location available .... (local store, online, etc)... or don't pay for it and buy something for less money more in your price range
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Phile, there's nothing stopping you from buying less expensive speakers, is there? Rather, you insist on having these speakers for less than the dealers are willing to sell them to you for.


Well I want a new Mustang Cobra R, too. I'm sure if we could get rid of the dealer network and their unholy markups, I could order one from the factory for half the $38K or so MSRP! I don't need to drive it; I read Autoweek. Damn Ford for perpetuating this antique system that keeps me from driving the car I want for the price I want to pay!
You guys just don't get it but in your defense you are not the first. BLDXYZ gets it. It's not the price of the speaker, it's who determines the price. The dealer should have absolute control over the price at which he or she sells his products. Notice I did not say over the price the dealer pays the manufacturer which is the subject of negotiation between the dealer and the manufacturer based on factors such as the number of speakers being purchased by the dealer.


If a dealer buys a speaker from a manufacturer for $1,000 and wants to sell that speaker for $1,100 because his market research shows that he can sell 1,000 of those speakers if the price is $1,100 but only 50 if the price is $2,000 that should be the dealer's business. However, if the MSRP of the speaker is $2,000, many high end speaker manufacturers will terminate the dealer's authorized status, especially if that dealer advertises that he will sell the speaker below the $2,000 MSRP. Therefore, it is the manufacturer, not the dealer or the market that is setting the price because the manufacturer will refuse to sell to the dealer if the dealer does not sell at the price the manufacturer wants. Yes I know that dealer's routinely give 10-15% off MSRP when you cut a deal with them but it's not something they can advertise.


My uncle used to own a Ford dealership and as far as I know, Ford never threatened to terminate his dealership because he sold cars for too little money. In fact, they incentivized him to sell as many cars as possible by offering him a lower price if he bought more cars from them. If he wanted to sell a Mustang Cobra with an MSRP of $30,000 for $20,000 or even $10,000 Ford could have cared less. That was his business. Not so in the high end audio business.


It's no coincidence that the only dealers who are "authorized" are those that advertise the manufacturer's products for sale at the MSRP.
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