Should the existing dealer distribution model be dumped?

[caesar]

I am wondering if audiophiles would be better served by a more direct sales model with manufacturer showrooms and "audio consultants" instead of dealers who represent a handful of product lines.

Personally, I believe that independent "audio consultants" who are not aligned to any brand would be better able to get the customer what they are looking for. Just like interior designers get a flat 40% of the sales price of any piece of furniture they sell, the audio consultant can get that, as well as hourly consultant fees to set up the room, etc.

What does everyone else think?

 

[muralman1]

Hi Caesar, interesting you bring up this point. I think you might have something worth considering.

I happen to have an amp and preamp that are sold direct only. I know one dealer who told me he would never recommend these products because they are sold direct. Come to think of it, my interconnects are sold direct only. I made my own SCs.

A new real brick store Audio FX held a grand opening a year ago. I looked over all their offerings realizing I had no use for anything they sell.

 

[Johnny Vinyl]

Interesting concept, but I don't think manufacturers are in a position to open up even a few showrooms in a handful of major markets. As far as "consultants" are concerned the thing that comes to mind first is that I'd probably end up paying more for gear than I do now.

John

 

[Mike Lavigne]

the current landscape in the 2-channel High End is really a hodge podge of various levels of chaos in distribution. i'm speaking about the upper end of the market. there are a few strict manufacturers or distributors--brick and mortar dealer products where a traditional model is followed. but besides those very few products such as Wilson, Audio Research, and Magico and a few imports many are either sold direct, or maybe direct with some dealers, or maybe some 'home dealers', or internet dealers, or a combo of all those things. many former serious audiophiles now dabble in selling products they were formerly fanboys of.

i'm not inferring there is anything wrong with the current reality. it seems to me that when great products get developed by people without any great business experience; the first issue is to hold down costs by keeping distribution easy and cheap....and going as direct as possible. don't inventory much stuff, and build it as it's sold. this allows them to stay in business and weather cycles of business but it also prevents any growth or much profit.

most high end companies that had much fixed costs prior to this most recent downturn in the economy have gone out of business. so small lean and simple will be the program for high end business's for the forseeable future.

 

[JackD201]

Over in the Philippines, the market is so small and the dealers pretty much know each other very well. While we carry our own products we also act as system integrators. This is kind of how it works.

The system integrator takes on the responsibility of figuring out what the client's needs and preferences are. If the preferences are for products carried by another dealer/distributor the same dealer is contacted and brought on board. Set up day is usually the most fun. It is not uncommon to find 3 or more dealers. Each is responsible for setting up his own piece of gear.

Given our culture, where we love feeding guests, the client usually puts out a modest spread. If the set up is completed early and the sun has gone down, it is also not uncommon for drinks to be served. Yup. It's a party!

Business wise, there are no commissions between dealers. It is made up for in cross referrals. The exception is on perks. If I for example want something for personal use, I get the cross dealer rate e.g. landed cost after taxes plus maybe 5 percent. It's a sweet deal. A lot of it is based on trust that the others act on good behavior. Anybody caught wedging, bad mouthing and undercutting is unceremoniously booted out of the consortium. The very few that have, have either gone under or are about to. The community is so tight that we often share the same technicians.

To guard against gouging or price fixing, all items are sold at or below retail of the country of origin. If you are a good client of any of the consortium members, an endorsement practically guarantees a home audition for almost any item except cartridges or anything below $2,000.

There are no consultation fees charged.

It works very well for us here but I doubt it would work over there except for maybe very few of the big cities.

 

[mullard88]

Wow! I didn't realize that interior designers made 40% of the sale price of a furniture.

 

[JackD201]

In Manila the high is typically 30% Sam.