That’s not correct in all cases. Some of these dealers pay 100% of the dealer price upfront. Yes, they keep that dealer margin but in effect they are financing PSA’s inventory. Those dealers typically offer deep discounts because they need to work to a certain return on capital.
Not to open a whole other can of worms, I personally have problems with brick & mortars that function as order takers ('we don’t have these speakers in stock but will be happy to order them for you once you give us $). I am a big believer in being able to earn on capital. Yes, I know opening a brick & mortar store costs money but I know of big online dealers that have nearly $1mm of inventory they have paid for. Other than the biggest dealers, B&Ms don’t have anywhere near that tied up.
JMO, you can disagree. It’s why I will buy from a B&M if a product I want is in stock but if they have to order it I want 30+% off.
No quibbles. I’ve done business with both big internet outfits as well as Brick and Mortar (Overture AV) AND have happily paid the full MSRP because of service, product availability, knowledge and time invested in me as a customer.
I also have some scars from dealing with a dealer and distributor network in another industry before I retired. It only takes a few a**holes to screw up the distribution channel for everybody. The good ones (both on-line and B&M) are great. The small %-age of bad ones are the ones that you end up wasting all of your time on because they kick up so much ill will that you can’t ignore them.
My dealer spent $600,000 on the premises about 7 years ago, carries about $1,300,000 of stock and owes about $550,000 to suppliers. Virtually none of their sales are online. There is about $1,300,000 of debt. It is a good, profitable and properly financed business.
They provide as good a user experience as you could wish for, but after auditioning a pair of Wilson XLF they aren’t going to supply them from stock.
Many manufacturers only manufacture to order. That was my recent experience with Shunyata and Innuos. That is not the dealer’s fault and a reason for having to give a discount. The dealer provided me the cables from demo stock for home trial.
PS Audio are probably going to have to carry a lot more stock for an online only business. That will cost money. When I order online I expect delivery within days.
Bought BHK300’s after auditioning through a dealer. Despite a very nice discount off retail I NEVER would have spent that kind of money an ANY audio product I hadn’t listened to first.
And with a new 3 loudspeaker line coming, including at least one very large, expensive model, I doubt many audiophiles will make such an investment without hearing them first.
Which leads me to conclude this is temporary. PS Audio will gradually bring those dealers they like best back & permanently purge the rest.
There is another option that PSA could consider. They could sell their speakers at a discount to people who would be willing to let other audiophiles come by and audition them. I’m sure PSA will be showing their speakers at every audio show here in the U.S. but not everyone is able to make it to these shows. If at least one person in every major city had pair and was willing to accommodate other audiophiles who wish to have a listen, I think it would help boost sales.
It will indeed be interesting to see how PSA decides to get these beasties to market. I think the previous estimates from prototype 1 was ~200 lbs per side ??!! Looking at the photos of the redesigned woofers, I doubt prototype 2 went on a diet. Even with the modular approach to the redesign, it looks like 3 or 4 cartons (or crates) to package up a pair. The logistics for in-home trials seem daunting.
Maybe the price will include reimbursement of RT airfare to Denver for a pre-sale audition in Boulder.
Maybe you’ve never had to repack a large loudspeaker and ship it off before. It’s a major pain in the ass.
Also there is the issue of having to break the speaker in, which takes hundreds of hours. I would much rather go to someone’s home where they’ve already set the speakers up in optimal positions and gone through the break in process, before rolling the dice and ordering them for myself.
@Famavolat - I would tend to agree at a certain price point I am going to want to hear the product before putting cash up. Thus my preference for a Brick & Mortar experience. Also, for a built to order series of components it’s going to need to be strongly competitive with what’s out on the market in terms of sound, quality, and value. I do think PS Audio hits the mark in general on the three criteria. That said hearing the DSD Sr. prior at a local dealer was most helpful in my ultimate decision. Initially I went for a different product which I am completely satisfied with. I am presently in the process of adding the DSD Sr. as well. My situation is somewhat unusual as I have three systems across multiple locales.
Joined after seeing about this on audiophilestyle and reading the entire thread. Just my thoughts:
Audio stores are going the way of the dodo bird. I live in the San Francisco Bay Area and there are only about 5 stores left in a one hour drive. This is an area with millions of people. One by one the stores have dropped off.
It is really for PS Audio to decide what their pricing model is. If their prices are too high, the number of people purchasing will drop to where they have to lower prices. If they are too low, PS Audio won’t make a sufficient profit to stay in business. From a consumer standpoint, the only question is does the component offered represent a fair value to the purchaser at the price offered. For some people, $10,000 power cords are a fair value, to others a rip off. Only the purchaser can decide for them-self which is correct.
I am sure that Paul considered this move very carefully. I have watched quiet a few of his videos and he strikes me as a methodical person. He employees more than 50 people and most employers don’t want to make a decision that results in their company going under and the people they employee losing their job.
Just a suggestion for consideration. Personally, I like the Schiit pricing model. The price is the price, every day, all day, all year, even on Black Friday. The only exceptions are B stock which are reduced slightly and closeouts on discontinued items (enjoying a Saga preamp on my desk system from a great deal on closeout). It is nice knowing that the product you purchase today will not go on sale for 30% off tomorrow (unless discontinued). According to Jason Stoddard, it also makes their demand much more consistent. Schiit used prices are also strong in the secondary market.
Schiit makes an interesting comparison to PS Audio, as both are privately held American manufactures. That said, PS Audio will never have the same pricing as Schiit. Schiit is clear, support is by e-mail, they will not help you decide what to pick, you pay shipping when you buy a product. If you don’t like it, you have 15 days to return it, you pay the return shipping and a restocking fee. It works and keeps prices low, but you are giving up on service and hand holding.
Finally, I hope that PS Audio succeeds widely with this transition from a dual distribution to direct only. It is the way the market is going and good, in fact great, support can be given by direct sale companies. At a time when Paul could easily sell the company and walk away, he is instead setting it up to be strong for the foreseeable future.
I agree with everything but your first point. I would argue that 5 dealers within an hour’s drive of SF is plenty. There are probably a few more within an hour from me in London, but I’ve only ever been to 2 of them.
The practicalities of shipping large speakers, mainly properly packing them, would seem to make it unviable. I have spoken to speaker manufacturers about it. I looked at Musicdirect and they only stock a few speakers over $10,000, all others are special orders. That a large mail order company hardly stocks any large speakers says something to me.
I am not aware of any manufacturer who lists large, expensive speakers for sale.
PS Audio has no brand perception for speakers. So why would a dealer stock PS Audio speakers if they could not stock the electronics?
It is a ridiculous situation when dealers are selling units for much less than the actual manufacturer and in the UK where PS Audio products are listed online by B&M retailers at often significantly different prices. So it seems something needed to be done.
We have every intention of keeping the free two-way shipping. Take any of our products home for a test drive for a month or more before deciding. Not quite as convenient as a dealer’s showroom but a hell of a lot more effective. If you like it, it’s already
proven in your home. Plus our specialists can help with setup and tuning.
While that’s true I suppose that applies to everything in the product and its service and how we take care of things. Is there a better way to let people know they don’t pay shipping either way?
Perhaps “included”? I like “free” because it brings home the point.
I’ve bought a lot of speakers over the years. Almost never did my local dealers have the exact model available for me to listen to. And if they did, I never left the store thinking that I really knew what they sounded like because it wasn’t my hifi, my room, etc.