HiFi Subjectivist ¦ Audio Forum ¦ NVA User Group

We've had a message (a public comment on a public post - see images), to our Facebook Page, from Struan Mackenzie, Director General at Hi-Fi Corner dealership in Edinburgh, in response to our posts about pricing in the UK hi-fi industry (NVA sells at 3 to 5 times parts cost, dealers sell at 7 to 10 times parts cost). The message from Struan reads... “I’d rather buy from a brand buying components in their thousands than a brand buying them in their tens. The cost of the part is negotiable, and not a gauge of musical performance. We have seen this type of industry bashing before”.

This is our response...

An argument about the individual cost of parts is a valid one, but it is somewhat diminished if the items you sell are at 7 to 10 times parts cost rather than 3 to 5 times parts cost. On the bigger picture of 'industry bashing'...far from it, Struan, we are promoting a positive alternative.

We have no shortage of respect for dealers who invest many tens of thousands of pounds in their business and provide excellent customer service – after all, we are making the same sort of investments in our own business. However, anyone who has any interest in our hobby will know that prices have increased dramatically over the past 10 years or so. In many ways, that is understandable – footfall is dramatically reduced, so margins must increase and ticket prices obviously follow suit. Dealer premises must become more luxurious to promote higher priced (luxury) items, which adds more cost, and the cycle starts over again.

Thanks to the internet, what is possible has changed, and that represents an opportunity for a different deal for both manufacturers and customers. We can offer 30 day home trial, buy now – pay later (so you don't have to make upfront payment to hear NVA in your own system), UK customer service via email and phone, a 100% cable trade-in scheme, component upgrades... and we can get a fairer price for our products and our customer can pay significantly less for those products. A win-win. We can't offer luxury premises, but we will make you a very nice cup of coffee if you want to collect your amplifier from us rather than having it shipped.

We believe in choice and transparency. We explain our offer as clearly as we can, including telling you the parts multiplier for each amplifier we sell. We don't want (or need) to bash the industry, but we will shine a light on it. In any market, knowledge is power. We think that enthusiasts should understand the value proposition and compare it to other options.

We wish you luck, Struan. We respect you as a fellow enthusiast.

Sincerely,

Paul Tiernan
Owner
NVA Hi-Fi

I think that's probably one of the most polite ways I've heard someone told "you look after your business, and I'll look after mine," Paul.

I saw a comment on the Facebook page about how Richard Dunn would have responded. I can well imagine.

Goes to show that dealers see direct sellers as a threat and NVA's presence on social media, especially concerning margins, is getting under their skin.

An intelligent and well balanced reply Paul. I think it's great that you are reaching out to new audiences and offering some insight to various cost models. In my one and only meeting with the combative Alan Sugar in the early 90's he made me chuckle when he said "tell em as little as possible, where there's mystery, there's margin" to which I smiled and nodded my head in total agreement.

It says a lot that being transparent about your own business model is perceived as an attack on the industries food chain.

"Director General" ? Hmm.

Struan Mackenzie doesn't have the high moral ground.

The margins are what they are.
Buying components in bulk wouldn't get you anywhere near to closing the gap between the direct sales vs via dealer mark-up differences.
His argument is that he'd rather save 10% to 30% of the cost and then multiply that by 7 to 10. Instead of forgoing the 10% to 30% discount and multiplying by 3 to 5. That doesn't make sense to me. Maybe Mr Mackenzie can explain it?

It's over-sensitive of him to label you marketing your company as "industry bashing". Or if it's not over-sensitive, it's him deploying siege mentality tactics, or saying anything he can in an effort to undermine what you're saying.
Otherwise you could say that any marketing where a company or product has an unusual feature is "industry bashing".
EG you sell non-ported speakers and point this out in your marketing, along with the benefits of this approach. Is that industry bashing because of all the speakers on sale today with ports?

Lindsayt wrote: ↑Wed Feb 23, 2022 8:31 pm Struan Mackenzie doesn't have the high moral ground.

From the information on their website his predecessor, who must be his father, was recommended by Ivor T. Says it all.

r3xj0hn570n wrote: ↑Wed Feb 23, 2022 8:09 pm "Director General" ? Hmm.

Somewhat grandiose for a hifi dealer.

Grumpytim wrote: ↑Wed Feb 23, 2022 10:03 pm

r3xj0hn570n wrote: ↑Wed Feb 23, 2022 8:09 pm "Director General" ? Hmm.

Somewhat grandiose for a hifi dealer.

They have another shop in Falkirk. Still a bit OTT.