Why the High End is doomed (Part 3) and what you can do about it

[marty]

I almost didn't chose to post this because I don't want to be "Debbie Downer", but sadly there is a truth here (perhaps more than one). And you have to congratulate whoever took the time to make this as they certainly "got it right".

http://www.youtube.com/watch?v=ZCBe7-6rw4M

In principal, it could be a continuation of "Part 2", but it is an original cartoon that probably deserves its own thread.
http://www.whatsbestforum.com/showt...r-quot-Why-the-High-End-is-Doomed-part-2-quot

The sad fact is that the premise of the cartoon is true, and this will not come as good news to may High End dealers who are really struggling to make a living in these tough times. If there is a positive message here, perhaps it should be, "support a legitimate bricks and mortar high end store". They are really there for us. Shouldn't we be there for them, especially the considerate, good and fair ones?

 

[amirm]

One of the problems of high-end is so few customers spread over so many products. With no objective criteria to evaluate them, many hang out there. I am living through this as I try to setup my AV business. Any brand you pick, is liable to only have 10 to 20% of the potential market. The situation is far worse if you pick more esoteric brands.

The other issue is high cost of selling. You all don't walk in and buy something like you do at Bestbuy. You spend hours playing and listening with stuff.

Net, net, it is all your fault!!!

 

[Kal Rubinson]

One of the problems of high-end is so few customers spread over so many products. With no objective criteria to evaluate them, many hang out there. I am living through this as I try to setup my AV business. Any brand you pick, is liable to only have 10 to 20% of the potential market. The situation is far worse if you pick more esoteric brands.

The other issue is high cost of selling. You all don't walk in and buy something like you do at Bestbuy. You spend hours playing and listening with stuff.

Net, net, it is all your fault!!!

Walt Kelly knew that.

 

[Old Listener]

Net, net, it is all your fault!!!

Blame Al Gore.

Bill

 

[Orb]

One of the problems of high-end is so few customers spread over so many products. With no objective criteria to evaluate them, many hang out there. I am living through this as I try to setup my AV business. Any brand you pick, is liable to only have 10 to 20% of the potential market. The situation is far worse if you pick more esoteric brands.

The other issue is high cost of selling. You all don't walk in and buy something like you do at Bestbuy. You spend hours playing and listening with stuff.

Net, net, it is all your fault!!!

I think what you summed up there nicely Amir is how the most successful high end bricks&mortar survive here in the UK.
What they do is products and service designed to keep a customer from when they start say at £300 all the way through their life and career up to their £7k to £10k mainstream high end and then up to the serious £30k plus.
This works well because the team are enthusiastic about the audio/video and for them it does not matter what they sell in terms of price but enjoying getting the most for it.

The downside, the amount of assets in their shop is eye boggling and well over £2mill retail price and a massively diverse product range (including LPs ranging from what they feel is the best rock to audiophile), on top of this is also the costs of enticing new customers and maintaining current with special days/events such as once a year serious price reductions including factory seconds and most of their ex-dems sold, to events showing off various products for both a good audio/video and the serious high end (to show what it can do including having the KEF blades there on demo once), but in a very relaxed fashion with burger and drinks and just turn up.

What I find interestingly the other successful model is the high end where they do not own bricks&mortar shop but are highly experienced small 2 person team that the distributor use to assist in setting up and providing gear for the most important shows/people/reviewers (this can include assessing if the reviewer has the correct room for the product and if not to use their home).
What set these high end sellers is their frank and honest approach (one I know does not feel the peripheral cones-feet work and does not like network type cables such as MIT).

From my experience here in the UK it is these two types of model and people in audio that are doing well, while others maybe struggling or even merging (seen two different medium size chains merge already over a year).
I appreciate the UK is different to America and much smaller, but maybe that is also a sign the distribution model may need to change over there as here in UK its quite easy to have several stunning dealers within 40 miles of each other.

Cheers
Orb

 

[amirm]

I have fond memories of walking down Oxford street in London in late 1970s and drooling over the nice inventory of gear they have .

Japan's model is UK model x 1000. There are entire department store size A/V shops which carry everything and I mean everything in stock. I checked one display at Yodobashi camera where they kept flash memory and that one display was worth $500K of inventory. You can listen to Stax headphone one minute, and a $2 earbud next. Fry's in US is the closest model but not even remotely the same. Interestingly enough, both Japanese and Fry's here in US have far more customers in them than our national chain: Best Buy. So maybe we do like to touch and feel equipment before buying.

 

[JackD201]

Over here the number of small independent teams is flourishing. By small I mean distributors that carry No more than 10 brands. The big B&Ms often source from the small teams thereby spreading both the costs and the risks. At least in the current economic environment, I think the one stop shop from entry level to the exotic has become too costly to maintain.

The net has definitely contributed to the success of the small, specialized operations that otherwise would not have had the resources for traditional promotional media.

 

[Mark (Basspig) Weiss]

Nice video skit. Take every instance of "high end audio" and replace it with "high end video and sound recording" and you've got a typical day with me trying to sell my services as a cinematographer and sound recording specialist.
It never fails to irritate me, when a client who lives in a $1M+ home complains that my $500 price for a recital recording is too high.. and then they go out and drop a hundred grand on a new Steinway D for their budding Horowitz..
Very few clients even care, and many are watching my videos on a 17" plastic Daewoo television. Ugh!
I feel very much like that salesman in the video. 99% of the people who call/visit me for a price quote are never heard from again.. they go to the bargain basement video guy and are happy with their sh*tty picture and sound.
Yeah, there are many times when I would like to jam an icepick through my head. And no, I won't validate your parking!!