I never knew that…
I agree that the landscape is changing, but I don’t agree with the little value you put on a dealer. My dealer is my advisor, my consultant, my expert. His experience and expertise has been invaluable. I couldn’t even begin to make any sense out of the variety of products out there. There is just too many. The landscape is confusing and I’m certainly not in the know like he is. I don’t call him and ask him to order a specific brand/model, I call him and ask what is the best product in my range for my system. Now that research falls to me, and I won’t have the expertise nor time he does. Just yesterday I was looking for a particular product and my dealer asked me a number of questions and was able to make a good recommendation, something I would never have thought about. The direct model works when I’m buying a very inexpensive product. When I’m spending four figures or more, I want that expertise to make sense what’s new and what’s out there for me.
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A few dealers are great; the majority, average; a few, dreadful.
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I think comparing PS Audio to Emotiva isn’t a reasonable comparison. PS Audio is a high end audio company. Emotiva serves a lower budget audience. IMO, Emotiva makes decent amps. Anything else I would steer clear of myself. The Emotiva processors had huge issues at one time.
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Open Box is generally sold as “Open Box” with full warranty (Music Direct and Audio Advisor both do this).
The most well stocked dealer in my area is useless to me because if he doesn’t sell it, it’s no good.
And his story never changes.
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Interesting and amusing discussion. I’ve been following PS Audio’s progress, on and off, since the introduction of their first phono preamp. This move is completely understandable. What will determine the success or failure of the program is the quality and usefulness of the product. The company has had it’s share of winners and losers over the years. What will change is that, without dealer support, the margin for error has narrowed. Advertising will help, as it will lead to more magazine reviews. But, ultimately, the product has to be good and perceived to offer value.
Paul has done a great job building awareness and credibility. Hopefully, he will deliver the goods.
Same here, same numbers. That’s the only time I will buy new gear. In fact the only new gear I’ve bought in the past five years was PSA equipment from a dealer that will soon be cut off. There is SO much used gear and so many good brands I refuse to pay retail. IMO, at 40% the DSD and DMP were fairly priced compared to what I could buy in the used market. At less than 40% I would have had no interest. That’s JMO, yours could be completely different. I have been doing this a looong time though and have lived all over the country so I have a decent idea of which I speak.
It’s fascinating to me how people speculate like this and why it’s so hard to actually take the words I have already shared and believe them. Just fascinating.
Highstream is speculating the reason we’re doing this is because we’re in financial trouble when just the opposite is true. The company has never been stronger in its 45 year history. Our sales are at a record level and our staff has grown to
50. Our new building is serving us well.
This move is not out of weakness but actually quite the opposite.
Let’s think of it perhaps in a different light. What, other than big discounts, were the majority of our online dealers providing our customers? Advice? Yes, but mostly taking orders and offering reduced pricing. This has not been a good long
term strategy for our brand, our customers, the valuation of our products on the used market and certainly not our overseas markets.
I truly wish bricks and mortar stores were holding steady rather than shrinking. This classic model has just eroded to the point where it no longer makes sense for many dealers in the US. Many of the biggest and best financed of the bricks and
mortars have had to resort to diluting their 2-channel sales with home theater offerings. I get it. If I were in their shoes I’d likely do the same thing.
Ours is a worldwide company. Our retail MSRP pricing reflects an industry standard margin that makes it possible to get as close to parity throughout the world (once shipping, customs, VAT, etc. are factored in). Yes, some countries are much higher
than US retail, but I assure you none of our distributors price gouge.
Our products are some of the best values in audio today. They were from the start of our company and I believe the remain so compared to every other brand.
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Are you going to be offering regular discounts off of MSRP to people that ask for a discount? Or are you going to stick to MSRP and only discount through the trade in program?
Are you you keeping the MSRP prices the same as they are now?
US and UK prices were equivalent if VAT and shipping are taken into account, but not if US customers are getting 40% retail discounts. That makes me feel being ripped off.
There are fewer retailer dealers in Europe, but the ones I know are thriving and I can’t imagine buying speakers or other major components direct without listening.
I think the retail system remains viable because most higher end manufacturers do not sell direct, they support their dealers, and the retail margins are lower so there is no haggling discounts.
EU law guarantees 2-year manufacturer warranty.
Yes, we’re keeping MSRP at exactly what they are around the world and as you see on our website. None of that changes and for the reasons I have previously stated.
Our trade-up program is what we offer folks to help them get into products and give their older products a good home. We do not require customers to send us any trades until after they have had time to audition their new PS products at home. They
either return the PS product or their trade, whichever works for them. When you call or email one of our HiFi Specialists they have discretion to work with customers. They’ve always had that ability.
As I have been attempting to communicate, nothing is changing other than our dealers are being phased out over time.
Let’s take a breather on all this for now.
I think I’ve been very clear.
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I haven’t read a single thought about value for money.
If the list price of any product does not seem a fair trade for the value it represents, the research and development, the US based labor and materials cost, the product performance, the reviews, the component quality, the US based service, then buy something at a price that is compelling for whatever reason.
When I bought my Pass amp, there was no discount. There was an opportunity to buy used or demo and that’s the route I went. There was no discount for my speakers, no discount for my signal cables, etc, etc.
My position is, I wouldn’t want to give up any part of the research, development, construction, etc that makes their products, in favor of a lower list price. And I don’t begrudge anyone for making a nice living for themselves and their families. If I can’t afford it, I buy something I can afford. Or I wait and save my nickels until I can. Oh crap, I’m getting dizzy on this soapbox. sorry.
(PS----There’s Stellar and Sprout too. Just sayin’)
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Hi Paul. Yes, you’ve been clear in many regards, something we all appreciate. The one thing you haven’t been clear about is very simple. Will the steep discounts, that so many have depended upon from your dealer network, continue?
These discounts were as high as 50% off MSRP.
Its understandable if you want to end them. But you have yet to be clear on that one point. And given the internet dealer discount palooza was an environment you help enable, its reasonable that you provide a straight, clear answer to that facet.
Is this the end of the steep, up to 50% discounts, that a significant portion of your customers have grown to expect? Are they over? Are the only discounts PSA will be providing tied to the trade in program, which works out to be a max of about 30%?
Thanks for your candor!
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I’ll try to take a look through Paul’s eyes and say “yes.”
When a manufacturer sells to a dealer, it’s not cash on the barrelhead. There are usually terms - like when you use your credit card. Generally, they are 30 days, but 60 or 90 are not unheard of ( I have no idea what the norms are in this particular industry). It can also be a lot longer if the dealer is a deadbeat and games the relationship by showing up on your ageing accounts receivables. Drop-ship programs are also an open invitation to abuse by dealers. I get it that paying UPS to schlep heavy items to and fro is inefficient and risks handling damage, but the abuse potential is still there. Financing the inventory for a reseller that sells at a deep discount and turns the inventory before the bill gets paid provides a great ROI for that dealer. Nothing beats getting a return on an investment you never had to make. Yes, the consumer gets a good price, but everybody else in the value chain gets screwed.
So who gets hurt besides the consumer looking for a low price when a dealer sells at deep discounts or makes drop-ship sales for pennies of profit? Not PS Audio. Their margin was built into the dealer cost. The guy who gets hurt is the full-service brick and mortar dealer who operates a fully-stocked showroom and can no longer compete with low margin on-line sales.
I would not be surprised to see dealers re-appear once the dust has settled and the playing field has been leveled, and the ecosystem has been restored to health. But you can’t do construction during demo.
As far as the viability of a direct-to-consumer model in audio, Audio Advisor, Music Direct, Analog Productions, etc. have done OK, it seems.
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I feel each and every question of this thread (also these ones) were answered a few times already or result logically from statements made by Paul.
I’m not really sure what part of this statement you and others are having difficulty with in the couple of times it has been repeated. That is the answer you are going to get on a public forum no matter how many times and different ways the question is asked. As RonP said find the company whose policy and prices meets your needs and buy from them.
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So is part of PS Audio’s new sales plan being implemented because of increased direct sales already taking place…thus PS Audio’s confidence that this will work because it’s already working?
That’s not the same as answering the question directly. Being left to deduce is not the same as a clear definitive answer.
I have no issue with PSA going direct. Ok by me. But Paul has never directly answered the question about whether or not the up to 50% discounts are now over.
I don’t really have a dog in this race. But when Paul said that he has clearly answered all of these questions I felt compelled to point out he has not.
And then give him a chance to answer. It’s the core concern for those who are upset about the move to direct sales. I’m not one of those people, but rather felt a lot of speculation would be curtailed if Paul simply addressed the issue of large discounts, beyond the scope of the trade in program, directly.
Why not???
I’m more interested in process than prices 
He has answered the question multiple times just not the way you guys want him to and I wouldn’t either if it was my company and certainly not on a “public” forum.
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