HiFi Subjectivist ¦ Audio Forum ¦ NVA User Group

antonio66 wrote: ↑Fri Feb 25, 2022 10:15 pm

CN211276 wrote: ↑Fri Feb 25, 2022 9:17 pm Seems to have a big thing about "industry bashing", or should I say having regard for the interest of a purchaser of hifi equipment. The Linn connection sets alarm bells ringing.

That would be a question I would be asking the 'Director General', in what way are you 'industry bashing'?

Obviously it's industry bashing as quite clearly it's an alternative to his (Linn's) business model. As is the way of established businesses, they tend to rather resent anything that disrupts the existing status quo. Missing the small point that the reason their industry/sector is being disrupted is that the consumers value proposition has been eroded to the point that space exists to offer alternatives.

The fact that there is room in the market for both to coexist is missed on them as they feel entitled to all of the pie, not just a slice.

Apologies there I almost sounded like one of my former US colleagues there - it won't happen again.

In 2022 in the UK, we have had near universal access to the Internet for many years. Plus distance selling regulations that are favourable to buyers.

Given that context, the crux of the matter is that the dealership selling model is unfavourable for the consumers when compared to the direct selling model (with reasonable cost plus pricing of the goods). Therefore in the UK in 2022 it's "consumer bashing" to sell via dealers. If it is "industry bashing" to promote direct selling - because this will inevitably involve comparing it to dealer selling - what's more important?

Avoiding bashing consumers? Or avoiding bashing the "industry", where the industry is defined as manufacturers that sell via dealers as well as the dealers?

From my point of view I think it's more important to avoid bashing consumers.

I don't buy any electrical goods by going to a dealer anymore. Those days are gone. I don't see why it should be any different for hifi.

Buy it online from "dealers" running from their place of residence or a lock up or direct from the manufacturer. You just have to hope the savings are passed on to the purchaser.

The great majority of our purchases are now online, ironically since most suppliers have a very good returns policy the risks are low if not better than buying from a shop.

Indeed I remember a run in with one hifi dealer over a brand cartridge that had something wrong with the innards, it looked fine on the outside, but did not have a left channel. According to the dealer I had obviously done something to break it and therefore it was my own fault. Ironically for this thread it was a Linn K9, which I then returned to Linn, they fessed up that it was defective and sent me a new one. I never went back to that dealer.

A dealer/shop in any sector has to offer some extra value over the internet to get boots through the door, if they don't then they will go the way of the dinosaur.

I don't want to 'bash' anyone, but I do value transparency. It's not a good sign if shining a light on standard industry practices results in defensiveness. That always just makes me want to dig deeper into what is really going on.

The vast majority of dealers (if not all dealers) started their businesses because they love music and hi-fi, but a combination of outside pressures and internal choices have now created a cycle of higher margins and higher ticket prices. That is leaving a gap between their 'boutique' offering and the direct from China OEM market that relies on what I would think of as slave labour. Those who are agile and willing to embrace new methods can fill that gap, to the benefit of customers. None of this should be controversial.

The multiplier that NVA works on, works for NVA, and NVA's particular circumstances - low overheads, creative marketing spend (rather than a big dollar budget), money spent on things that improve the product. Remember, though, that we could not sustain the tiny margins that Richard managed to - we have dedicated premises, full-time labour, some marketing (shows cost what they cost, no matter how creative you are). At the same time, we have chosen to fit higher quality parts, have bespoke heavy duty packaging made and invest in prototyping new case materials and speakers (materials and drive units). We are satisfied that the amps we now send out are the best quality that NVA has ever produced...but they are definitely more expensive. We give customers this information (including the parts multiplier for each amp) so that they can make an informed choice. Some will like the choices we have made, others will dislike those choices. It is what it is.

Anyone in the industry who provides transparency about their business model will have my respect - manufacturer, dealer, distributor, magazine editor, forum owner, whoever. Their business model might not be the one I would choose for myself, or the one that I would choose as a customer, but different people want, and value, different things. What I dislike is deception, smoke and mirrors. Don't put a big Union Jack flag on the back of your speakers when those speakers were made in China by workers who are earning less than £10 per week. Don't put the same old internals inside a fancy case and double the price. Don't brand an OEM product from the Far-east and then charge 15 times what you paid for it on the premise that it is your own design. Don't tell me that 45% of rrp isn't the average dealer gross margin when everyone in the industry knows that it is. Have the courage to be honest.

Grumpytim wrote: ↑Sat Feb 26, 2022 9:47 am

antonio66 wrote: ↑Fri Feb 25, 2022 10:15 pm

CN211276 wrote: ↑Fri Feb 25, 2022 9:17 pm Seems to have a big thing about "industry bashing", or should I say having regard for the interest of a purchaser of hifi equipment. The Linn connection sets alarm bells ringing.

That would be a question I would be asking the 'Director General', in what way are you 'industry bashing'?

Obviously it's industry bashing as quite clearly it's an alternative to his (Linn's) business model. As is the way of established businesses, they tend to rather resent anything that disrupts the existing status quo. Missing the small point that the reason their industry/sector is being disrupted is that the consumers value proposition has been eroded to the point that space exists to offer alternatives.




The fact that there is room in the market for both to coexist is missed on them as they feel entitled to all of the pie, not just a slice.

Apologies there I almost sounded like one of my former US colleagues there - it won't happen again.

I have to disagree with you over your example of 'industry bashing'. What about manufacturers that cannot find a dealer who is willing to stock and sell their products, are they 'industry bashing' if they sell direct?
I assumed 'industry bashing' referred to the fact Paul had openly displayed his profit margins, which I consider to be a selling point, similar to having a sale. No body says you are industry bashing if you sell something for less than the full RRP. That is why I asked the question.

antonio66 wrote: ↑Sun Feb 27, 2022 2:20 am

Grumpytim wrote: ↑Sat Feb 26, 2022 9:47 am

antonio66 wrote: ↑Fri Feb 25, 2022 10:15 pm

That would be a question I would be asking the 'Director General', in what way are you 'industry bashing'?

Obviously it's industry bashing as quite clearly it's an alternative to his (Linn's) business model. As is the way of established businesses, they tend to rather resent anything that disrupts the existing status quo. Missing the small point that the reason their industry/sector is being disrupted is that the consumers value proposition has been eroded to the point that space exists to offer alternatives.




The fact that there is room in the market for both to coexist is missed on them as they feel entitled to all of the pie, not just a slice.

Apologies there I almost sounded like one of my former US colleagues there - it won't happen again.

I have to disagree with you over your example of 'industry bashing'. What about manufacturers that cannot find a dealer who is willing to stock and sell their products, are they 'industry bashing' if they sell direct?
I assumed 'industry bashing' referred to the fact Paul had openly displayed his profit margins, which I consider to be a selling point, similar to having a sale. No body says you are industry bashing if you sell something for less than the full RRP. That is why I asked the question.

The industry actively price fixes. As a dealer, you can discount end of line or ex-demo, but try doing it with a current brand new item. You will very quickly find that other dealers are contacting the distributor / manufacturer to complain. The discounter may be tolerated for a short time, and other dealers may be allowed to match the discount for that same short time, but the supply of product to the 'rogue' dealer will eventually be cut off. This is why we have not seen the advent of online-only dealers who would be happy to pass on savings through not needing luxury premises etc.

I was given a 5% discount on the Mscaler. Do not know if this is standard practice which is hushed up.

CN211276 wrote: ↑Sun Feb 27, 2022 11:54 am I was given a 5% discount on the Mscaler. Do not know if this is standard practice which is hushed up.

The dealer would not be allowed, by the manufacturer, to advertise the discount. One reason why some manufacturers offer an extended warranty if you register directly with them is so that they can view your receipt.

My local Hifi shop (in Gorinchem, South-Holland) gives a standard 3-5% discount to their regular customers.

I think that the system over here is slightly different as the most influence seems to be in the hands of the distributors, rather than the dealers. Distributors dictate pricing and availability and the dealers have little choice but to follow.

Dealerships survive as 'service points' where you can drop in, listen to a variety of equipment with a cup of coffee, get advice and have your gear maintained/repaired.