Stereophile A+ Yet DS Prices In Free-Fall?


#1

With the DirectStream breathing the rarefied air of the Stereophile elite A+ Class of Recommended Components why are prices in free-fall mode on AudioGon? Trade in any old $25 beat up CD player and get $2000.00 off from Wally at Underwood Hi-Fi: http://app.audiogon.com/listings/da-converters-ps-audio-direct-stream-dac-let-us-buy-your-dac-for-2000-00-2014-09-13-digital-80020-broomfield-co

I don’t get it. So much for holding resale value.


#2

Welcome back Sloop (or Welcome if you are a new Sloop). :)

I do not perceive this special offer as “prices in free-fall.” Rather, PS Audio is offering a trade-in deal ($1,500 off with trade-in, the dealer is kicking in his own additional $500 discount) to leverage the good reviews the DS is receiving to increase sales penetration. It is a common marketing technique.


#3

It would seem that this promotion is something you would use when sales are at a slow time (seasonal or whatever reason) or you have excess inventory.

The net result is putting the real value at $4000 instead of $6000 - devaluing the DS and this hurts those that paid more than $4k for their DS.

I don’t think DS owners appreciate this sales strategy very much.


#4

I appreciate your thinking, but everything tech oriented quickly depreciates and is replaced by even better yet, less expensive items. Those on the bleeding edge typically pay the most.

I buy considering only whether the item is worth the asking price to me at the time of the purchase. If the yuck/buck ratio is good, I buy. It matters not a whit to me what others are doing, what the price may be in two months, what resale may be at some point at time, etc. If I am thinking of resale value at the time I am buying, the product is insufficiently enticing to bother to purchasing it.

It’s a toy, not an investment. The whole point of a hobby is to waste time and money. Audio adroitly fulfills both.

The alternate, much more sensible, approach is to buy last year’s technology in audio, computers, televisions, etc. The prices have dropped and stabilized, the used market is active, the bang/buck ratio is often vastly better. You can easily buy items which will provide years of enjoyment at lesser cost and will make fewer mistakes.

Then again I like risk. YMMV


#5

The trouble is that it affects the DS 2nd. hand value…


#6

Good morning!
I’ve been very busy with family but while on vacation I happened to look at Audiogon and was kind of surprised that the DS was being so heavily discounted, especially while enjoying great reviews and audio buzz in almost all magazines that have reviewed it. It us truly an exceptional DAC. A more than worthy successor to the PWD II.
I see Elks point, strike while the brand is hot, sell as many as possible hoping that volume will compensate for a substantial discount and maybe increase market share as more audiophiles discover one’s product and become loyal customers. There is plenty of evidence that our economy is at least in a major recession, if not out right depression and really few stats point to the way out of this mess the Democrooks, Republicrooks, and Bankcrooks have foisted upon us. (But that’s another story.)
But, if I paid $6000.00 for the DS, (and I believe that price is very reasonable, for a state of the art DAC), I believe one should be able to get $3000.00 on Audiogon if forced for economic reasons to sell the DS. Maybe $3500 or more because of its popularity. The used price is usually half off retail, right.
But if the real selling price for a brand new DS becomes $4000.00 or less because that is the price one can get with just a little shopping around, maybe $3500.00 even. Then the used price becomes half of $4000.00 which equals $2000.00. Which means the early adopters who paid $6000.00 for the DS if forced to sell for any reason have lost $4000.00. Not a good return on ones money. I know many people look at the resale value of a piece of equipment to judge its true worth. I don’t think they would be impressed. Of course audiophiles don’t buy a piece of gear as an investment to make money, but they do hope it will not be devalued like a piece of Pioneer or the like. Many buyers of premium brands find that if in good condition they will receive considerably more than half of its resale value.
I would not be happy right now if I was an early buyer and had paid close to full retail for the DS and in just a few months find I’ve lost $4000.00 of my original investment. I might even decide never to be an early buyer for any new product and wait a month or two for the price to become just a few hundred dollars over dealer cost to buy future product.
I do see both sides of this, maybe today’s economy requires the first marketing strategy just to generate any sales at all. But I don’t see companies such as ARC, Krell, MBL, DCS, Dynaudio, Ayre, Boulder, or many other high end stalwarts selling product $500.00 or even $1000.00 over dealer cost with free shipping and no PayPal fees thrown in just for the heck of it.
Life is full of choices and surprises with no guarantees.
The DS us a truly great DAC hope you all are enjoying the ride like me.
Until il the next time,
Steven


#7
Elk said Welcome back Sloop (or Welcome if you are a new Sloop). :)

I do not perceive this special offer as “prices in free-fall.” Rather, PS Audio is offering a trade-in deal ($1,500 off with trade-in, the dealer is kicking in his own additional $500 discount) to leverage the good reviews the DS is receiving to increase sales penetration. It is a common marketing technique.


Elk, I am new to Forum & yes, a new DS owner.

My point is this, I just think it is a topic that needs to be openly discussed. There are PSA customers being significantly damaged by the DS price war. What other manufacturer can you name that has gone through this dramatic price free-fall within 6-7 months of full production? Especially for a product in the Stereophile A+ Class rating? I can think of none.

I believe Frodo & Mr_Bill have valid perspectives and you seem to be towing the “corporate line.” As a Forum Leader, I am sure you are more aligned with PSA policies than the rest of us and may possibly receive some benefit from your role (discounts, perks, etc.). Perhaps that has colored your spin?


#8

If you did the kit for 3k and you have 4 in the PWD that’s 7k. If resale is only 2k for a new DS then kit sellers might be at only 1.5 k, for a loss of 5.5, not pretty for such a short time. Maybe it’s a demand thing.


#9
Sloop John B said Elk, I am new to Forum & yes, a new DS owner.
Excellent! It's good to have you on board.
My point is this, I just think it is a topic that needs to be openly discussed.
Perfectly appropriate. PS Audio is remarkably open about its products, development of new products, philosophies. Paul and clan has always been very interested in knowing what his customers want and think.
There are PSA customers being significantly damaged by the DS price war.
This is where we disagree. You may be disappointed, but you have not been damaged. Your complaint is the very definition of a first world "problem."
I believe Frodo & Mr_Bill have valid perspectives and you seem to be towing the "corporate line." As a Forum Leader, I am sure you are more aligned with PSA policies than the rest of us . . .
24_gif

Not even close. Not only do I not always agree with PS Audio corporate or Paul personally, it is not uncommon for me to disagree. In fact, prior to volunteering to fulfill this unpaid role Paul made a point that I need never agree with his positions. Very impressive.

Fordo and Bill do have valid perspectives. So do I. All three may or may not agree with you. We openly and respectfully discuss our opinions and conclusions, and the basis therefore. The only rule is to avoid personal attacks; merely disagreeing with someone does not justify ad hominem comments. Everything else is fair game.

Discuss!


#10

Sloop, if you were to have done some searching here in the forums you would see that Elk has only recently taken the role as moderator and before that happened, purchased his DS like the rest of us. There are also beta testers here who help PS Audio in checking out FW versions before they are released to the world. Some have been doing this for as far back as the original PWD. As far I can tell, no one has received any special compensation or incentive for any work of this sort. Elk (and I, in fact) along with a couple of others gave Paul and Ted quite a bit of a hard time with our dissection of the DS when we first got it. But as you hang around here I think you’ll see we are all driving toward the same goal of getting the best sound from what we own - even if we don’t always all agree with how it’s being done.laugh

That aside, I will say that I’m not sure what PSA’s strategy is in this kind of sales effort. I’m led to understand Underwood Hi-Fi is one of PS Audio’s largest sellers; I wonder if this arrangement is available only though them. It may be a short term plan to get more DSes out there. I can see, though, where it may seem a little odd for a new flagship product.


#11

I have to agree. Substantial discounting of such a new flagship product certainly devalues the product in the minds of the audio public. I think it’s nice for PSA to offer this discount program (PSA’s program is any Dac take off $1500.00) and of course they are offering this program for September only, but the net effect will of course last much longer… I can’t imagine anyone in October spending $6K… Also consider the bricks and mortar stores that sell PSA having to try and compete…unless PSA is lowering the dealer cost or kicking back the $1500-2000K I sure wouldn’t want to be a retailer… Most hifi has about a 40% at retail margin, that’s pretty much common knowledge… do the math…


#12
Elk said I appreciate your thinking, but everything tech oriented quickly depreciates and is replaced by even better yet, less expensive items. Those on the bleeding edge typically pay the most.
I can sell my year old iPhone 5s for more than I paid for it.. So not all tech takes a massive dive... Having the manufacturer (and retailers) offer massive discounts on a flagship product 4 months after it's introduction isn't a good way to endear yourself to ones core customers who ponied up the $6K. But that's just my opinion, I could be wrong.

#13
erikm said I have to agree. Substantial discounting of such a new flagship product certainly devalues the product in the minds of the audio public. I think it's nice for PSA to offer this discount program (PSA's program is any Dac take off $1500.00) and of course they are offering this program for September only, but the net effect will of course last much longer.. I can't imagine anyone in October spending $6K.. Also consider the bricks and mortar stores that sell PSA having to try and compete..unless PSA is lowering the dealer cost or kicking back the $1500-2000K I sure wouldn't want to be a retailer.. Most hifi has about a 40% at retail margin, that's pretty much common knowledge.. do the math..
I have to agree with erikm. Putting aside for the moment whether or not Elk's PSA association is a conflict of interest (I do not care one way or the other) the seminal issue here is Sloop's concern over the price "free-fall" of the Stereophile Class A+ DirectStream within a few months of production.

erlkm is absolutely correct in his assessment as to who would pay $6k for a unit whose real-world value is $3998.00 or less. I’ve not contacted Underwood or the Texas retailer to negotiate a price but who among us believes that even more substantial discounts are on the table? Say, reaching down to the $3500 levels suggested in an earlier post.

I feel sorry for the early buyers who are essentially damaged (and I do mean damaged monetarily) by a price free-fall of over 35-42%. We all fully realize that in the digital domaine once you buy a unit, it is already obsolete. The Stereophile reviewer suggested as much in his conclusion.


#14

I would not call it a “price free-fall”, I’d call it a sale, and a good one at that! Now more peeps can afford a truly reference DAC. Paul did the trade in program on many products in the past, so this should be no surprise. Early adopters often pay more. It’s the price for being 1st sometimes.

I have no regrets as I’m sure when I go to sell my DAC sometime way down the line I’ll get about half what I paid. It’s all about timing. If I don’t I still got one hellofa DAC at a Great price. happy-132_gif


#15
sgrowan said "There is plenty of evidence that our economy is at least in a major recession, if not out right depression and really few stats point to the way out of this mess the Democrooks, Republicrooks, and Bankcrooks have foisted upon us. (But that's another story.)
Ummmmmmmmm.........................
Anyway, I have bought two PW II's and two DS upgrade kits. They were four different purchases at different times and I shopped around for the best price on each one. I'm super pleased with the DS and don't regret buying in at the point on the product lifecycle that I did. I'm usually not the first one in line to buy at new product announcement but that's not always the case. What was great about PS is that they offered an upgrade path for those of us that had already invested in the PW II. That's a rarity and very much appreciated.

#16

Sale is a good description… But lets consider the typical reasons for a sale in retail.

  1. Unit is old and not selling since a new typically 'better" one is one the way.

  2. Over-stocked, excess inventory.

  3. Units are simply not selling, for whatever reasons.

  4. Marketing, get the products into more consumers hands, hoping that that will drive brand awareness and create more long term customers of the brand.

  5. Sell more by making the price very attractive… volume, even at a substantial discount can sometimes overcome lower volume at higher prices, but this can and typically will have adverse long term effects on the products perceived “value” see #4

So why have a sale on a new item, that I assume is “hot”? Most business aren’t completely altruistic…I don’t know the reasons for PSA’s decision but if I was in charge of the marketing dept. I sure as shit wouldn’t have gone with a 25% discount on a brand new, rave reviewed class A+ rated product that’s barely 6 months old…But that’s just my $.02 I’m not driving this train :-)


#17

Or it could be an incentive to someone that has another brand to change and buy PSaudio. This is often done in many products, thank automobiles for instance. It drives sales and conquest sales.

The iPhone example is not correct since your contract pays for the phone. The initial purchase price is subsidizing the original price.


#18

Fair enough… and good points.


#19

Let’s be honest here:

  • Psaudio is not in the same realm as Krell, Ayre, etc. Not in terms of quality but “status”. They don’t encourage discounting and have a vested interest in remaining “exclusive” brands. Psaudio has never occupied that niche of the market.

  • It is unfortunate that early adopters get “shafted” for not waiting for the discounting but that is the nature of being an early adopter (and I am one in this case).

  • This is nothing new as the same thing happened with PWD II. The list was $4k but it wasn’t hard to find for half that (I did). Why the surprise now?


#20

As others have suggested, this isn’t really anything new. PSA has often offered trade-ins or other discounts on relatively new products once production catches up with early demand. Early adopters pay full freight but get to enjoy the product from the beginning. Some people may defer purchases hoping for a future sale of some sort but, again, they will also delay their enjoyment. This price drop, like the ones that came before it, should be temporary and used prices should then go back up. There may be some lag and they might not go up as much as they would if PSA never held sales but that’s something I can live with. The sales do bring new purchasers into the PSA fold so I can understand why PSA might want to do it, although I do sympathize with those who buy just before a sale is announced and don’t get the benefits. But then that is true for sales in general.