In store bargaining and markup?

M

Mtn. Steel

Junior Audioholic
I would prefer not to buy on the internet for a few reasons. I need to hear before buying. I like to support smaller businesses as much as possible and I would like to have a face to look at if I need help, service or warranty. My question is this. How much mark up are on speakers? If I find what I like and wish to haggle a bit (it`s in my nature) what could I expect a dealer to pony up with...generally speaking. I know there are many different scenarios. Haggle on a GM right now and you are likely to get a pretty sweet price. If I go to a Paradigm dealer and tell them that I want 5 Millenia 20 speakers (retail $499 each), but need a better price, could I expect a 10, 20, 30% discount??? Of course cash in hand would be paramount. Hey, I know they are in business to make money and I respect that. I am just not sure what their profit margin is and what they can do for a right now sale. Any input=+111
 
walter duque

walter duque

Audioholic Samurai
minimum 50%-60% markup on speakers. Highpriced models even more.
 
CraigV

CraigV

Audioholic General
Well, I got a $1,000 a pair speaker for $600, and I’m thinking the dealer I got them from still made a profit. I have had some dealers tell me the price is the price, because they are the only show in town. It does help to have competition in the area.

It never hurts to ask, worse they can say is no, and you just take your $ elsewhere.
 
M

mudrummer99

Senior Audioholic
Personally working in a higher end audio store, I know for sure that markup is about 50% give or take a bit depending on the brand. Ultra high end of course is way higher, but this covers just about anything from about $1k-~$10k

Mike
 
T

TVJon

Audioholic
In some cases, mark-up doesn't matter. Polk Audio, for example, seems to have a strangle-hold on resellers. The resellers won't budge from the prices Polk sets. Not the locals, not even the biggest internet stores that probably sell the stuff by the cargo container. On one hand, Polk's policies mean you really don't have to shop around. On the other hand, you're not going to find a bargain anywhere. For me, that takes some of the fun out of the process.

TVJon
 
D

diegs

Junior Audioholic
I think haggling is always worth a shot... ie "I saw this product for less money on the internet, could you lower your price?" Supposedly the sweet spot for car sales is around 7% over actual cost... enough to cover dealer expenses and gives the salesman a few bills. Basically a win win.

Any ideas on what the sweet spot would be on speakers at an independent dealer? :rolleyes: Or even a source for dealer cost on speakers? Guess you could always just assume 50% and work from their.
 
N

nitin_mehra20

Audioholic
I think haggling is always worth a shot... ie "I saw this product for less money on the internet, could you lower your price?" Supposedly the sweet spot for car sales is around 7% over actual cost... enough to cover dealer expenses and gives the salesman a few bills. Basically a win win.

Any ideas on what the sweet spot would be on speakers at an independent dealer? :rolleyes: Or even a source for dealer cost on speakers? Guess you could always just assume 50% and work from their.
I will be quite surprised if you can get them to lower even by 15% :) Specially if they are the only dealers in the area.

My dealer offered me a 5% discount, take it or leave it offer :( For someone who shops online always looking for a deal, paying a 50% markup is plain unacceptable :(

The B&M stores act like jerks when they know that no one else but only they can sell the speakers in the area :mad: Since you can't buy online 'cause no one would sell it to you, you have no option but get robbed on the highway :mad:

This is not free market, its cartelization :) :cool:
 
WmAx

WmAx

Audioholic Samurai
If you talk to the store owner of a local high end store (not a salesman), and have CASH to physically show him, I would wager you have a very good chance of getting a substantial discount. I would offer, cash, 30-35% under the retail, and bargain/haggle from there. But only with the owner... and only with physical cash to show....

-Chris
 
bandphan

bandphan

Banned
I will be quite surprised if you can get them to lower even by 15% :) Specially if they are the only dealers in the area.

My dealer offered me a 5% discount, take it or leave it offer :( For someone who shops online always looking for a deal, paying a 50% markup is plain unacceptable :(

The B&M stores act like jerks when they know that no one else but only they can sell the speakers in the area :mad: Since you can't buy online 'cause no one would sell it to you, you have no option but get robbed on the highway :mad:

This is not free market, its cartelization :) :cool:
Why is profit a dirty word? Value is in exprience just as much as the cost. So its ok to shop deals but to complian about profit margins seems personal. If you owned your own store wouldnt you like to make money? The reason can vary but the idea of pricing being equal at B&M stores is to create value, if one thinks its not a value shop eleswhere, JMO
 
H

highfigh

Seriously, I have no life.
Finally, someone who took the time to think of the dealer. There's a point where people wanting to pay a certain price makes it not worth selling some things. If I can't make money on it, there's no reason to bother and some people actually become indignant about that. I will not lose money just to make a sale- that's just stupid. If a dealer carries inventory, has a store, employees and doesn't want to become a charitable organization, they have to make money on every sale in order to keep the lights on, pay the employees, not lose the lease, pay the interest on the inventory (especially if they floorplan) and any other expenses. Every single person who I have ever talked with wants to be able to save money from their job. Some ask for a raise, some have automatic raises, some get a part-time job and some add to their skills/education but nobody wants to go into debt. THERE IS NO DIFFERENCE BETWEEN A B&M RETAILER AND ANYONE ELSE WHO WANTS SOMETHING LEFT OVER AFTER EXPENSES!!!!!!!!!!!!!!!!!!!. Why do customers think they have the right to deprive a dealer of their profit? You all call it bargaining, haggling or "part of the fun" but for a retailer, I assure you all, that part is absolutely no fun at all. There is absolutely no point in breaking even on a sale. At that point, being in business is futile and when online sellers, who may or may not be authorized by the manufacturer, sell things for less than regular dealer cost, people think they should be able to buy that item at a store for the same price and that's just not gonna happen.

The worst people are the ones who pick the dealer's brain about every little detail and then buy online. People like them suck and waste countless hours of time for sales people and store owners. That's time they could be devoting to activities that actually help keep the business in operation. These same people then want the local guy to service the items and I can guarantee one thing- nobody wants to lose a sale because they can't match a price and then be expected to break even or lose money on servicing that equipment. Many companies don't even pay a dealer when they have to service things- they expect it to be sent in so the customer can wait for it to be returned.

I fully expect some of you to hate me when you read this but, having been in consumer electronics retail for over 30 years, I'm completely sick of people telling others (or expecting) to demand a lower price, buy only used or online, use equipment and then return it or generally screw the local dealer(s). We have a right to make a profit and customers have no right to tell us how much is fair. What good will it do for all of the local guys to go under? Online retailers provide no followup service, don't install, you can't walk in and buy parts or accessories, don't really want people calling for advice and other than having their reputation decline, don't care about anything other than making money.

Best buy is now the largest chain of electronics retailers and they recently stated that they want to concentrate more on online selling. If all of the small local shops fail and one giant is the only place to buy things, they can name their price and the customers will have no choice but to pay it, or not buy those brands/models.

There is absolutely no difference between a person who wants to save money and a retailer trying to make a profit- they're exactly the same thing, except the retailer has people telling them that they're making too much.

Flame on.
 
H

highfigh

Seriously, I have no life.
If you talk to the store owner of a local high end store (not a salesman), and have CASH to physically show him, I would wager you have a very good chance of getting a substantial discount. I would offer, cash, 30-35% under the retail, and bargain/haggle from there. But only with the owner... and only with physical cash to show....

-Chris
What makes you think the owner has time to haggle with customers? Running a store is a full-time job by itself and then you think they want a fist full of cash instead of a check or credit card sale? Cash can be stolen but credit card sales don't cost much over a certain amount. You really think a retailer will sell a $100 item for $65-$70 if they pay $50 for it? Not unless they sell a sh!tload of them at one time and/or they have to match a price. Do you have any idea how much it costs to employ someone or keep the doors open?

"But only with the owner"- it's not the owner's job to lose money for the company by selling things for less than the usual price.
 
bigred7078

bigred7078

Full Audioholic
Finally, someone who took the time to think of the dealer. There's a point where people wanting to pay a certain price makes it not worth selling some things. If I can't make money on it, there's no reason to bother and some people actually become indignant about that. I will not lose money just to make a sale- that's just stupid. If a dealer carries inventory, has a store, employees and doesn't want to become a charitable organization, they have to make money on every sale in order to keep the lights on, pay the employees, not lose the lease, pay the interest on the inventory (especially if they floorplan) and any other expenses. Every single person who I have ever talked with wants to be able to save money from their job. Some ask for a raise, some have automatic raises, some get a part-time job and some add to their skills/education but nobody wants to go into debt. THERE IS NO DIFFERENCE BETWEEN A B&M RETAILER AND ANYONE ELSE WHO WANTS SOMETHING LEFT OVER AFTER EXPENSES!!!!!!!!!!!!!!!!!!!. Why do customers think they have the right to deprive a dealer of their profit? You all call it bargaining, haggling or "part of the fun" but for a retailer, I assure you all, that part is absolutely no fun at all. There is absolutely no point in breaking even on a sale. At that point, being in business is futile and when online sellers, who may or may not be authorized by the manufacturer, sell things for less than regular dealer cost, people think they should be able to buy that item at a store for the same price and that's just not gonna happen.

The worst people are the ones who pick the dealer's brain about every little detail and then buy online. People like them suck and waste countless hours of time for sales people and store owners. That's time they could be devoting to activities that actually help keep the business in operation. These same people then want the local guy to service the items and I can guarantee one thing- nobody wants to lose a sale because they can't match a price and then be expected to break even or lose money on servicing that equipment. Many companies don't even pay a dealer when they have to service things- they expect it to be sent in so the customer can wait for it to be returned.

I fully expect some of you to hate me when you read this but, having been in consumer electronics retail for over 30 years, I'm completely sick of people telling others (or expecting) to demand a lower price, buy only used or online, use equipment and then return it or generally screw the local dealer(s). We have a right to make a profit and customers have no right to tell us how much is fair. What good will it do for all of the local guys to go under? Online retailers provide no followup service, don't install, you can't walk in and buy parts or accessories, don't really want people calling for advice and other than having their reputation decline, don't care about anything other than making money.

Best buy is now the largest chain of electronics retailers and they recently stated that they want to concentrate more on online selling. If all of the small local shops fail and one giant is the only place to buy things, they can name their price and the customers will have no choice but to pay it, or not buy those brands/models.

There is absolutely no difference between a person who wants to save money and a retailer trying to make a profit- they're exactly the same thing, except the retailer has people telling them that they're making too much.

Flame on.
+1, i do understand tryig to save some money, but some people think of it as their god-given right to get the biggest discount imagineable.

If something is selling for $1000 and cost is $500, why would you think you should get it for $550 to $600??? By the dealer only making a small percentage its not doing them ANY good. Its not like they are straight up pocketing that money and calling it a day. There is ALOT of overhead for these stores...Rent, Utilities, Staff, Upkeep, heck even the product itself. With so very few people buying stuff these days, dealers need to sell this stuff at retail, otherwise they wont be making profit and will be out of business. Then sooner or later you will have no place to go and look at new product and listen to speakers.
 
M

m_vanmeter

Full Audioholic
"WmAX" has a very good point....CASH....money in hand !
Credit cards are very expensive for retail stores - the fees are high, often 7% or higher.

So, if you really want to haggle, the store owner has to know you can afford to buy the equipment "on the spot" with cash, and he does not have any further processing costs or risk (checks, credit cards, time payment plans all cost a dealer money and have associated risks of non-payment).
 
D

diegs

Junior Audioholic
Only a sucker would walk into a store and not at least try to negotiate a better deal on an expensive item. What's wrong with a fair deal? A win/win for both the customer and retailer. The customer feels proud they got what they wanted at a lower price and the dealer made some money. For most business owners, cash is always preferred, for tax reasons.
 
N

nitin_mehra20

Audioholic
Why is profit a dirty word? Value is in exprience just as much as the cost. So its ok to shop deals but to complian about profit margins seems personal. If you owned your own store wouldnt you like to make money? The reason can vary but the idea of pricing being equal at B&M stores is to create value, if one thinks its not a value shop eleswhere, JMO
I am not against making profit. Even if one buys online, the company is not selling products for a loss. If they would have, they won't stay in business long.

Profit margins are fine as long as they benefit the seller and delivers quality to the consumer. I am not suggesting that the shop owner sell it for a loss, a profit margin of even 20-25% over and above the dealer cost seems like a fair buy, cause I am getting personalized service and a great ambiance to shop in, while the dealer is making a profit.

But, if the sole aim of a dealership is to monopolize and arm twist the user to buy from them only and that too at an exorbitant cost, cause they want to extract the entire operational cost of operating their store plus profit from few buys a month, then it is not acceptable.

Cause few buys a month including my own is not my problem, I am also in the market to receive value as is the seller to make profit. If i am working my a** off to get a better deal, researching my product and trying to get a bargain, then he too should be working to offer better deals and advertise his services.

Yes, if i had a store I would like to make a profit, but i would work towards it. I would advertize, give people great deals, personalized service at a "fair" markup.

Personalized service and experience can only go as far, it cannot be made into an excuse to charge me 50-60% above cost IMO
 
H

highfigh

Seriously, I have no life.
"WmAX" has a very good point....CASH....money in hand !
Credit cards are very expensive for retail stores - the fees are high, often 7% or higher.

So, if you really want to haggle, the store owner has to know you can afford to buy the equipment "on the spot" with cash, and he does not have any further processing costs or risk (checks, credit cards, time payment plans all cost a dealer money and have associated risks of non-payment).
If anyone pays 7% to take plastic, they deserve to fail because they aren't keeping track of the expenses they can control. I know of some, including myself, who take PayPal when plastic is used and it's because there's no contract, no equipment needed (other than access to a computer) and the payment/verification is instantaneous. Personally, if I sell something for close to a high dollar amount, the last thing I want is cash. It's pretty easy for a home theater system or even a nice 2 channel system to be well over $10K and I don't want to carry that much case, anywhere. No processing costs or risks? If the amount is over $10K, there's an IRS form that's mandatory so it takes the time to fill it out and the accounting to reconcile the books. Risk- all it takes to be the victim of a robbery is for some dirtbag to overhear someone talking about the speakers and amps they just paid for with cash.

I don't know who you have been talking to but this isn't the '50s or '60s and cash doesn't get a retailer's attention it used to. It sn't necessarily going to make them sell to anyone for a lower price unless that retailer is going to keep the sale "off the books", either, which means they aren't totally honest in their business practices.
 
S

snmhanson

Junior Audioholic
OK, I got drawn into this one at the end. Being in a similar position as the OP I can definately relate to a bit of sticker shock when looking at buying some new speakers. However, being a business owner I can fully relate to the concept of covering all of you fixed and variable costs and then squeezing out a profit. I think that today, with the internet and large scale retailers taking so much sales away from local dealers, it is becoming more and more difficult for them to make a profit and therefore making it increasingly necessary to sell items at close to full retail. I understand how the "what's your absolute bottom line" mentality of the consumer can drive a small retailer crazy. Afterall, every dollar he takes off the price is one less dollar to his bottom line. I am sure that most small electronics dealers are not millionaires and that they rely on their business income to feed the family and pay the bills.

On the other hand, how important is the sale to them? Isn't it better to make a small profit on a sale (net of all expenses) than no profit at all? To demand full retail when there are so many other options available to consumers may not always be the best approach - unless your customer base is all millionaires and won't miss the cash. I think there is a fine line between making a profit and being greedy. Furthermore, offering a fair discount can go along way to creating customer loyalty and goodwill that will more than pay for itself in the long run. Afterall, just as much as the business owner needs to maximize his profits, the consumer is always thinking about how he can pay his own bills and provide for his own family and still be able to get that kick *** speaker system he has always wanted. And on a side note, my personal thoughts are that MSRP is a bit inflated to help account for all of the discounts given and/or to protect the image of the brand. (ie. These Bose speakers retail for $1,500 but I will give them to you for $1,200 which is a 20% discount but still way overpriced...) If a dealer is too greedy, he is going to lose business as others will be happy to step in and offer the same product and services at better prices. On the other hand, cusomters have to be careful to not cut off their nose to spite their face. If you are always after the best prices and resort to pitting dealers against each other to eek out a profitless sale, then you are a major cause of the de-customerization of our retail businesses today.

But I digress. I will say that when I go to our local small town dealer to buy a full speaker system I do expect a little bit of a discount. Maybe 5-15% or so, but only because I am buying several items and I know he will still be making a fair profit on the sale. If he is so greedy that he can't give up a little of his profit for the sake of making a large sale then I will drive an hour away and buy from the bigger, but still high-end and locally owned, dealer who will offer a discount for a sizeable purchange. In either case though, I would never expect them to give up all of their profit just to generate a sale. On the other hand, if I was going in to buy only a single speaker or pair of speakers I would not expect much of a discount (although I would take one if offered and leave with a great feeling about him).

Matt

BTW, I am not in the electronics business, so when you guys are quoting a 50% markup are you saying that the original cost is 50% of the retail (as is typical in retail) or that the original cost is being increased 50% to come up with the retail price? In other words, if the dealer cost is $100 does the speaker retail for $150 or $200? That would make a big difference in how you should approach a dealer.

BTW2, I also want to state that the one thing that really irks me is when the small town retailer acts like he has a captive customer base and feels that he can simply get away with charging high prices because there are no other choices. Making a fair profit is one thing but being greedy and reaming customers because you think you have the upper hand is not cool.

OK, now I'm done.
 
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