Don't forget the dealer

Join Our Community Subscribe to Paul's Posts

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.