How much do HiFi dealers add on top , on average?

[AMPaul]

Just curious; I am just guessing but i'd say anywhere between 30 to 100%? Maybe some of you have been in this business and could provide a more realistic average value.

as a follow up i've noticed by watching some YT videos that they generally do not stock cheapo stuff (like under £1000 ($1500)). Thus that makes me wonder how they model their yearly budgets, etc etc. They really must rely on selling like 2 expensive products a month and then some other more "affordable" stuff on the top.

Cheers!

 

[digitalfrost]

I don't know but you can get speakers with 50% discount sometimes, and I guess they're not losing money on those. Given how often people buy new speakers (rarely) the markups must be significant so they can live off it.

 

[McFly]

Internet Direct companies (of all products really) were starting to blossom until COVID hammered them back down, due to freight costs skyrocketing. Internet direct companies were really hurting brick and mortar dealers due to end users getting way more for their money. Be interesting to see how it all comes out in the wash. Dealers of course get much lower freight costs due to buying containers of gear at a time. This is especially applicable to countries other than USA and UK

 

[JSmith]

average value

It often comes down to buying power too, as in a small privately owned shop probably won't be putting that much on top and their buy price per unit is higher compared to large chain stores for example. Profit margin is also based on competition pricing for the same product... so they make take a hit on one product, yet gain a little more back on another product.



JSmith

 

[muslhead]

Depends upon the product mfg. Dealer cost can be as much as 50% discount to msrp (100% markup) and others are no more than 15-18% below msrp, in my experience. The 2 things that control dealer discounts (to msrp) are their cost of the product and any agreements between the mfg and their dealers regarding allowable discounts. Some mfg's agreements have clauses that will void the agreement (they are removed as an authorized dealer and can no longer sell that product line) if dealer is "caught" discounting. Some mfgs audit books of dealer for compliance and others its nothing more than a veiled threat. On those mfgs that are strict about their msrp pricing requirements, dealers are given the right to sell returned product for a discount and why you will see many examples of "open box" and "customer returns" items that are discounted and when purchased turn out to be brand new. As with everything, smart people are creative and find a way around all rules (think taxes for example). I have been involved in some way or another selling stereo equipment (on the side, never for a living) for 45 years (just before the discovery of dirt). Like everything it has evolved over time and with the advent of "high end" equipment that has sped up the change dramatically.

 

[nemanja_t]

I think it is also more that 50%…. Here is one example … NAD M10 is 3000€ MSRP, it can be found around 2000€. It muss be bundled with something, speakers for example, as companies do not allow direct discount. It goes on french site that was mentioned here more times.

 

[Jim Matthews]

Back in the day speaker markup was on a downward sliding scale.

50% on the low end, around 15% for our top line Thiel CS2.
We sold lots of new Advents and polished the Thiel's with a diaper.

The real money was in cables, cartridges and trade ins.

 

[AMPaul]

Back in the day speaker markup was on a downward sliding scale.

50% on the low end, around 15% for our top line Thiel CS2.
We sold lots of new Advents and polished the Thiel's with a diaper.

The real money was in cables, cartridges and trade ins.

Could you detail to me how the trade in system worked (or works). I'm uneducated. Cheers!

 

[audiophile]

The maximum discount I was ever able to get from a distributor was 40%. My guess their total margin on most audiophile gear is 50%

 

[muslhead]

In addition, some mfgs make dealers buy a specified min quantity of units for their own inventory if they want to be a dealer. A well known, highly rated active speaker mfg here on ASR requires new dealers to buy 5 pairs to start and then gives them a 15% discount off msrp. Unless you are reasonably large (not a one off shop) or have deep pockets, its gonna be hard to plop down $60k+ for inventory of a new speaker. Imagine the start up costs if all dealers required the same.

 

[FeddyLost]

It depends on politics of manufacturer and distributor.
Sometimes dealer discount (as I've heard) is 70%, sometimes 40-50%.
Import, customs, warranty, service, promotion, advertisements and stock requirements also may be applied or not.
So, direct profits arer tough to calculate.

PS Multiroom, home cinema and personal audio still barely keep itself alive. Classic hi-fi is slowly rotting alive IMO.

 

[bo_knows]

I don't know but you can get speakers with 50% discount sometimes, and I guess they're not losing money on those. Given how often people buy new speakers (rarely) the markups must be significant so they can live off it.

I wish that was the case with the KEF reference line but so far I couldn't find any discounts from the shop(s).
If anyone knows or has more info and would like to share, please reach out to me over PM. Thanks

 

[JeffS7444]

I never got to check out price lists for bigger players in the 1980s like Technics, but expect that margins could be very good there. But dealer requirements could be considerable too: At their peak, they had a whole lot of SKUs, and would want their dealers to showcase a decent sampling of their wares, not just a handful of cherry-picked items.

 

[Jim Matthews]

Could you detail to me how the trade in system worked (or works). I'm uneducated. Cheers!

We had an Orion Blue book that was used as a guide to projected value.
If it said Macintosh on the front, we knew it would resell.

Big, heavy and old were discouraged. The easiest way to avoid the heavy stuff was to refer to our local mover, who gave overpriced quotes.

 

[Cbdb2]

I knew a guy who worked in a smaller hifi shop. Electronics were usually marked up 50% to100% and speakers 70% to 150%. This allowed the owner to offer deals, pay his staff, rent, taxes etc. Now we have the warehouse amazon, who just pockets that money, and forces sellers to keep there prices above the amazon price. ( and I thought price fixing was ilegal.)

 

[ahofer]

My knowledge goes back to 1978, but at that time retail was roughly double cost , and they would offer direct "salesman's comp" to store staff at about 60% of retail.