The Vinyl Anachronist
by Marc Phillips
Part LXXXII: A Tale of Two Dealers
Over the last couple of years, I've been writing about audio dealers who specialize in the High End. I've concentrated on what I call "the good guys," dealers who "get" specialist audio and have a truly enthusiastic approach to their businesses. They love the gear, they love the music and they love how well their products are able to reproduce the original musical performance. It's been a true delight to speak with these individuals and to share their love of our wonderful, albeit troubled industry.
Recently, I've gone over to the dark side and I'm now operating on the business side of things. I've become the U.S. distributor for Unison Research and Opera Loudspeakers, two Italian brands that are manufactured near Venice by the same family. While building a dealer network throughout the United States, I've encountered a different type of dealer, one who is financially sound and independent. Surprisingly, these dealers seem to excel in tough economic times by taking a purely pragmatic approach to audiophiles, which means that they're less interested in dealing with the usual audiophile behaviors and focusing on customers who buy gear in non-traditional ways.
"I don't like selling to audiophiles," a dealer--whom I'll call Dealer X--recently told me. Dealer X has persevered in tough times by adopting an attitude that many audiophiles would find off-putting. To put it succinctly, Dealer X refuses to entertain the usual audiophile conceits such as "I'm planning to buy something in a few months, and I want to hear everything out there before I write a check." Dealer X's response to this prospective client is to say, "Come back when you're ready." He told me that by the time an audiophile visits the store for a third time without buying, he's already lost money on the deal. In other words, he's no longer interested in the sale. His business comes primarily from well-heeled consumers who enjoy the nice things in life and aren't concerned with equipment reviews or the opinions of fellow hobbyists. They come in, look around and pull out their credit cards on that first visit.
This is an attitude most audiophiles don't want expressed by dealers, to say the least. I'm an audiophile, and one of the true joys of the hobby is to visit countless dealers and to hear as much gear as possible. How else can I make an educated purchasing decision? When I engage in these behaviors however, I try to be as accommodating to the dealer as possible. I don't make him jump through hoops so he can make his margins. I realize his time is precious. I also try to avoid the worst audiophile behavior in the books: putting a dealer through his paces and then buying the same component on line to save a few bucks. This behavior alone is why so many brick-and-mortar hi-fi stores have gone under in the last couple of decades.
Dealer X is very aware of this pitfall. He is the last hi-fi store in his city, one of the largest metropolitan areas in the United States. He has watched all of his competitors close their doors over the last few years, and he has a uniquely pessimistic yet economically sound approach to this. Instead of celebrating the loss of competition, he asks himself, "Am I next?" He has a day job which provides him with a comfortable life; he only visits his store on Saturdays and a couple of weekday evenings (he has a lone salesman watch the store when he isn't there). He even let his lease terminate and pays rent on a month-to-month basis in case he has to follow his colleagues and close his doors. This approach, he says, is the reason why he continues to stay in business.
Now I'll talk about Dealer Y. This guy is my ideal version of a dealer, someone who loves the High-End and constantly tells everyone how lucky he is to do this for a living. He operates out of his home to reduce his overhead. Unlike Dealer X, he doesn't have a day job. He's completely committed to being an audio dealer, and he never dismisses an opportunity to demonstrate gear, answer questions and even host events where dozens of audiophiles visit his home, eat his food and drink his wine without buying a single thing. At the same time, he also worries about staying afloat, and he has precious few resources (i.e. cash) to put back into his business. As an audiophile, I'll patronize a dozen Dealer Ys before I ever give Dealer X a dime. But Dealer Y is an increasingly rare breed, and many fellow audiophiles lament this.
If you're knowledgeable about business and economics, you'll quickly realize that audiophiles have nothing to complain about since we created this environment. Yes, we audiophiles are famous for our notoriously fickle buying decisions. We stroll into Internet discussion forums and whine about the paucity of dealers that fit the business mold we enjoyed in the '70's: a hi-fi store with rooms full of gear, full of audio salespeople who are more than willing to play whatever we want. We want to compare two cartridges, and we expect the salespeople to whip out their trusty alignment protractors and re-install a second cartridges quickly before we forget what the first cartridge sounded like. We want instant A/B comparisons. We want to exhaust all of our options before we even think about making a choice. When we finally do make a choice, we tell the dealer that we'll think about it--after we read all of the reviews and ask all of our audiophile buddies on those aforementioned discussion forums to choose for us.
This may sound like an ideal way to buy audio gear, but it a far from ideal way to sell gear. That's why high-end audio is in such dire straits these days, and our choices are being narrowed considerably. I'm not ignoring the fact that less and less people these days are willing to shell out a small fortune for a home hi-fi, especially when the current enthusiasm for sound reproduction is centered around combining your music system with your computer. These technological solutions are often light on actual hi-fi products and heavy on computer know-how. When you do have to buy a product that solves these dilemmas, it's often a little black box with a USB port that retails for a couple hundred bucks. Dealer margins on these items aren't quite paying the rent.
If high-end audio dies altogether, we audiophiles have no one to blame but ourselves. Both Dealer X and Dealer Y are merely reacting to our whims, and they're both doing their best to survive. Our frustrations have nothing to do with them. While I'm not asking anyone to run out to a brick-and-mortar dealer and buy a $50,000 tube amplifier to keep the hobby alive, I would like to see a little more love for the few audio dealers who remain to answer our questions so they can run our credit cards through their credit card machines. I recently found a thread on a discussion forum where posters accused dealers, distributors and manufacturers of operating on margins that were way too exorbitant. It's insane, they posited, that someone was getting forty or fifty points on a piece of audio gear.
Fortunately, a few dealers chimed in and attempted to set them straight. Even if they get those fifty points, they still have to pay all of the overhead that accompanies a brick-and-mortar establishment. When Dealer X told me he's losing money by the time an audiophile makes his third visit, I had no reason to disbelieve him. No one is getting rich in high-end audio these days. If these guys are driving nice cars, chances are their day job provided them with these luxuries.
As I fill my Texas home w ith beautiful Italian audio gear for demonstration, I've had several local visitors stop by to see what I was doing for a living. Every single one was relatively ignorant about high-end audio, but hearing my systems made them want to save enough money to take the plunge. High-end audio reproduction is better than ever, and the average person is overwhelmed by the sheer performance of these products. Yet computerized audio is the only truly profitable field in audio these days. As someone who is just learning about this, I can honestly say that a FLAC file downloaded onto a PC does not come close to a first-rate analog rig, or even a modern CD player. It's much better than I thought, but it's not giving me the goosebumps I experience regularly with my main reference system.
The market will decide the fate of high-end audio. It probably won't go the way audiophiles want. But let's not blame evil dealers and greedy manufacturers of six-figure loudspeakers. It's time to look in the mirror and ask ourselves, "Are we still enjoying the music?"
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