True enough.
+1 Audiophilehi
OK folks, letās take take a chill pill and relax. Do a little thought experiment, and this is how things are likely to play outā¦
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PS Audio already is doing direct sales. That much, we know. What we donāt know is what the % of their total sales revenue this represents. That number and itās trajectory might surprise us.
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In any event, since they are already doing direct sales, they have a pretty good handle on what the ātake rateā of products shipped out for evaluation is. Itās probably pretty high, meaning that returns are an acceptably low %-age of what of what goes out the door.
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Given a low number of returns, shipping a demo unit out and back, and then shipping a new unit to complete the sale is a waste of resources. Not to mention that you would have a pretty large āfleetā of loaners tying up precious capital.
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Likewise, peddling a returned unit as ānewā is likely to fall afoul of Federal FTC and various state truth in advertising rules. I doubt PSA Audio would want to risk trashing their reputation this way.
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Moreover, the Lanham Act allows companies to file a lawsuit against competitors for false or misleading advertising if the product involved was sold across state lines. Too big of a legal risk to take, IMHO. If you think high-end audio is expensive, try getting sued as a company.
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What we ARE likely to see is a market in ādemoā or āfactory refurbishedā units either by PSA Audio, an outfit like The Music Room, or a new business entity that appears to make a market in the trade-ins, used and demo gear. This is likely already happening. Pay a visit to the TMR website and check out the inventory of PS Audio gear they have. If all sales going forward are direct, the % of returns probably wonāt change much, but the absolute number of them will increase because of the new direct-to-consumer business model. This assumes that PS Audio maintains itās āno strings attachedā trial policy.
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The demo or refurbished gear will come backed with a full factory warranty and with a significant haircut of the MSRP. In fact, my ancient PPP was purchased direct from PS Audio as a discounted āB-stockā item back in the day. So this is not something that they havenāt done in the past.
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This is already a feature of the auto industry (the courtesy and demo cars that the dealers maintain) and others. My last 3 or 4 computers have been purchased direct from H-P via their Business Outlet website, which features heavily discounted refurbished, closeout and overstock items. 99% of the time, ārefurbishedā in this case simply means a box that has been opened and returned by an enterprise customer for whatever reason and was never plugged in. One of their reps told me that in some cases, the items returned were never opened. Regardless, they canāt sell it as ānew.ā
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So there are likely to be āalmost newā units available for bargain hunters at attractive prices.
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If the accountants at PS Audio are not already doing financial models on this, Paul should fire them first thing on Monday.
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Good points. Selling demo or refurbished units is another way to discount, and get the more price-sensitive buyers and those who donāt have 10 year old gear sitting in their closet to trade in.
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Iām not ambivalent about PSA going direct-only. First, the so-called ādiscountā I may receive from a brick-and-mortar dealer I know is a feel good, but meaningless gesture and only a reflection of how much margin the dealer is already willing to forego on the sale. Weāll see what this means for PSAās direct-only pricing approach, but what is the difference if going direct leads to a lower āretailā by cutting out the cost of maintaining a dealer network? It makes no difference to me at all. Second, Iāve found essentially no value-added in recent years going to a brick-and-mortar store for an audition and purchase. PSA has been supporting a free in-home trial program. No brick-and-mortar audition can ever be the equivalent of a trial in my own system in my listening environment with my favorite music. As for service, my experience with PSAās service folks has been truly outstanding. What am I getting from a brick-and-mortar dealer in the way of advice that Iām not able to get straight from the experts themselves?
Paulās rationale for the change is indeed a recognition of reality and I see zero sacrifice to me as a consumer and PS audio owner at all. Go for it Paul!
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How this āplanā actually plays out especially with the speakers in the equation is yet to be seen. All we can do is speculate as Paulās statement was in no way definitive as to how things will ultimately look.
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In what world is upwards of $2000 a meaningless gesture and what guarantee is there that PSA will drop their prices? Some of yāall are really comfortable with leaving money on the table.
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I disagree. A constant flow of refurbished - B stock products is not good. PSA plays in the high end game. Do you ever see B stock Mcintosh, Levinson, Firstwatt, etc? Selling trade in units used is one thing.
The mass producers like Marantz, Yamaha have outlets for such (Assesories4less, etc) and I do not regard their brands as High end.
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Seems better than believing itās not
And just to be clear ā the ālead to higher prices for new equipmentā ā that is because I have an established relationship with my dealer. So I do not pay full price for a new item. Iāve invested time and built up loyalty.
If PSA wants to go direct, I will be paying a higher price and receive no extra benefit (I went through PSA direct for customer service because it was direct and resolved things quicker).
PSA should adopt a loyalty pricing model ā previous PSA customers can reach a certain discount percentage on new gear (in addition to trade in) based on previous purchases.
Or with supporting the people that design and build amazing gear - Iām not assuming you donāt support them
My system is set but if I were younger and stronger and had the sq ft, Iād be all over a P20 or two.
Itās definitely a balancing act, since PS Audio doesnāt want to tarnish its brand. You are right about that. But there should be ways to maintain integrity of the brand as high-end and still offer discounts in one form or another in order to make more sales. That has to be true.
Also, Iām sure I am not the only one on this forum who has purchased at least as much demo equipment as new equipment over the past 20+ years. With PS Audio, I used their great trade in program on an old but still functioning CAL Alpha and Delta. Same thing.
Having said that, I think @audiophilehi is correct. There will be some customers that PS Audio is going to lose. . . .
And I do wonder how they will be able to sell speakers direct only. . . .
In survey design, you want to ask questions with one variable per question. These are compound questions. Suboptimal for sure.
Whereās the tongue in cheek emoticon?
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The lone question in the Poll asks: āWhich of the following statements best describes your feelings about PS Audio going to an all-factory-direct sales model?ā
What is ācompoundā about that?
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Pass/First Watt does in fact have a model in place to deal with demo units, etc. itās called Reno HiFi and it is run by members of Nelsonās family. If Paul choses to do the same thing instead of letting TMR sell those units he could set up a second entity just like Pass has.
Sorry, the answers are compound. Happy vs. unhappy is one answer. And reasons that you have surmised is another. It would be better to ask how happy vs unhappy on a 5-point scale. Then ask a question that ask why or why not happyā with an other option for those who may have different reasons.
Okay, weāll do it your way. . . .
SURVEY: On a scale of 1 to 5, with 1 being the least happy and 5 being the most happy, how happy are you that PS Audio is going to an all-factory-direct sales model?
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- 5
0 voters
FWIW all of the PSA gear I have purchased has been direct sales and the prices are sometimes negotiable. All you have to do is ask. There are also incentives for repeat customers, etc.
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Going direct avoids conversations like one I had just a couple weeks ago, where the authorized dealer argued that āall the parts inside all PS Audioās components are made in China and theyāre only assembled in Boulderā, the implied conclusion he hoped Iād reach was to buy his Chinese alternative.
I was annoyed.
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