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Don’t forget the dealer

Paul's Posts — 13 August 2011

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Don’t forget the dealer

After reading Wednesday’s post about peer reviewing, reader Erich Henkel from Munich Germany wrote:

“Don´t forget the High End Dealer. This is the person who knows me and with whom I have a long lasting relationship.   My dealer knows me, my equipment (which I bought from him), my favorite music, problems with the room etc.”

No question Erich’s right.  However, we should note there are high-end dealers and then there are retailers selling commodities.  They are very different.  The difference is like that of a long time family doctor vs. the generic physician in an urgent care Doc-In-The-Box.  The former knows you, your family and your history, the latter doesn’t and is working in a sort of factory.

The breed of high-end dealers like Erich’s is growing smaller in this country and threatening to do the same in others.

There’s no denying the need and the desire to interact with a familiar and trusted retailer when you make a purchase as personal as a high-end audio system, so why are they going away?  What’s different about today’s environment than yesterday’s?  Why has the personalized dealer in Europe and Asia seemingly persevered while getting weaker here?

I don’t have the answers, but it may be instructive to look for parallel situations, see what happened and attempt to draw some conclusions.

One area I am familiar with is photography.  In the not too distant past all cameras were purchased through camera stores run by people who lived and breathed the subject and got to know their customers – and each of us had a favorite: mine was Ken Mar Camera in Long Island.  I knew all the guys, they knew me.  They freely gave me advice about what and what not to buy.  I spent a lot of money in their store.  Today, it’s an internet portal.

The change came gradually, but little by little margins on cameras went down because of the internet.  Internet vendors had almost no overhead and basically eliminated the brick and mortar retailers.  Today, selling cameras on the internet is a tough and competitive market because the margins are so low.  We call this continual margin erosion a “race to the bottom”.  It happens a lot.

Is this what’s happening to high-end dealers?  Not exactly, but it certainly is an interesting discussion.

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About Author

Paul McGowan

Paul McGowan is the CEO and co-founder of PS Audio Inc. a Boulder Colorado design and manufacturing company of high-end audio products and services. McGowan has been designing and building high-end products for nearly 40 years. Hobbies include skiing, music, hiking, artisan bread baking, kick boxing and cooking. He lives in Boulder Colorado with his wife Terri and his 4 sons.

(2) Readers Comments

  1. Gordon

    August 14, 2011 at 5:04 am

    RE: DONT FORGET THE DEALER

    Today’s world is likened to The Digital Revolution.

    We have been conditioned to accept mediocrity in exchange for convenience. Disposable merchandise that soon wears out or becomes obsolete versus prized craftsmanship that comes from dedication and genius.

    A computer [ electrical contraption] used to cost a fortune and require a degree to operate. Now 3 year olds are playing games and 10 year olds are texting. They want the latest version to keep up with their classmates and parents know that next month it should be cheaper.

    Where did this begin? When did “more junk” become better than “selective treasures”?
    When was the last time you had a pair of shoes repaired instead of replacing them?
    The big fish are eating the smaller fish and couldn’t care less about words like pride, craftsmanship and longevity. Innovation departments focus more on margins and production streamlining than they do on product excellence.

    Of course, we are fortunate to still have some manufacturers in various consumer products that are weathering this storm with quality engineering and customer loyalty while keeping a sharp eye on value. They are inheriting much of the “advisory” role of the bricks and mortar retailer but cannot demo and set up equipment without a dedicated and trained local dealer network. In truth, they must service both the DIY and Brick and Mortar consumer based on their customer’s requirement.
    The truth is this is an art and are we teaching this art to our heirs?

    Value: is a perception based on “Bang for the Buck” or appreciation of the “user experience”?

    Many attach value to “Brand” names feeling they are safe and model correct if they follow the advertising and snob appeal that the “perception” delivers.

    Toyota became number one because of aggressive expansion and the “perception” of consistent quality. When their president admitted cutting corners their sales dropped by 25% in one year here in North America and will only return if we trust that they are recommitted to the path of Brand Consistency. “You get what you pay for”.

    The real challenge lies in our upcoming generations.
    Are we teaching them how to perceive “true Value”?
    In food, cars, education, clothing and of course RELATIONSHIPS?

    Do we still enjoy family meals and the quality of Mom and Grandma”s home cooking or prefer pizza on the run.
    Do we still enjoy time spent with our favourite auto mechanic as he tunes our beast to perfection and lets us watch?
    Do we still appreciate our favourite shirt or Shoes and marvel at how they still look new and style correct after so long?
    Is an MBA or PHD a learning experience or just a work resume item for possible higher pay?
    AH, RELATIONSHIPS: Do we still “value” the interaction with fellow humans who are willing to share “their wisdom” as we shop or do we prefer a nameless transient seller or big box shelf?
    At the end of the day lets hope that we re-attach the word “value” to some sort of satisfaction that lasts not only mechanically but also emotionally.

    With kind regards,
    Gordon

    • August 14, 2011 at 7:01 am

      Gordon, great reply, thanks for posting. The craftsmanship issues you bring up are near and dear to me and I will be posting some comments on that subject in the future.

      Society changes and always for the better as well as the worse – just depends on your viewpoint and how it affects you.

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