Cash For Clunkers - Meet The AV Business
- By: Jerry Del Colliano
- - Reviewer's System
- Category:
- Feature News Stories, Industry Trade News, News
- August 18, 2009

Today my gardener, Alfredo, showed up in the morning in a brand new, bright blue Toyota truck. I am not sure what was gleaming more - Alfredo's proud smile or the wax job on his new ride. Alfredo and his family are possibly the hardest working people I know. Seven days a week, they work and always with a joke or a smile. Right before he left my house, I asked him if he used the federal "cash for clunkers" program to buy the car and he pointed his thumb sky high. His old truck was a nightmare. Dinged, dented, rarely ever washed and taken south of the border plenty of times on trips to Alfredo's ranch in Oaxaca, Mexico. Fuel efficiency wasn't the old truck's best attribute and the dozens of sharpened garden tools resting dangerously on the dashboard could (in the words of Dirty Harry) "take a man's head clean off" in the event of just a quick stop in traffic. A new truck was a good idea for a number of strong reasons.
After Alfredo left today, I thought back to my days at Cello Music and Film Los Angeles working with Mark Levinson and Joe Cali and our cash for clunkers program. I am about to really date myself here but this was an era before eBay, Audiogon and even the commercial Internet yet we had our own very effective trade-in program that back then worked like a charm. Clients who owned Krell, Mark Levinson, Audio Research, THEIL, Wilson Audio, Goldmund and or any number of other A-list components would get anywhere from 75 to 100 percent of their original invoice price back towards a retail Cello purchase back in the day. We had a very kind, hippie buddy named Joel who would drive over and pick up gear for which he would then resell mostly to Asia. Note: these were the days before companies played tricks with computers and the AC voltage so it wasn't that hard to send a container in a ship to Japan loaded with audiophile gear. He made money. We made money and the client left happy. It was a win-win-win.
Our cash for clunkers program at Cello made people feel good about their other audiophile purchases and even better about their Cello purchases. If they bought Cello at retail prices they also got a very long warranty as well as a one-year 100 percent trade-up program for items of higher value. If you bought a $7,500 Cello Duet 350 amp (I still love that amp) but wanted Cello Performance II Class-A monoblock amps - you got your $7,500 back towards the purchase. No questions asked. No problems. Our Hollywood as well as our International clients simply loved this program. It built incredible brand and retailer loyalty. It made their lives easier and it made it more simple for me to keep selling to clients who were inclined to buy. Hell, I even sold MartinLogan in that store then and did the same trade up program there and I bet we took 80 percent of the MartinLogans we sold back for much more expensive Cello speakers at one point or another. The program just worked.
Giving people a fair trade up program works as proven by the federal "cash for clunkers" program. In a mere four days Americans dumped enough crappy-ass, fuel-sucking cars and trucks that we blasted through $1,000,000,000 in bailout money. Congress smartly coughed up another $2,000,000,000 from the TARP program so people like Alfredo could get in on buying a new ride. CNN is reporting that in some parts of the country that dealers are actually running out of cars to sell. That's very good news for a change. News that will positively effect the economy in the months to come. It will put people back to work and hopefully will be worth the stimulus money because God knows we are borrowing like mad to rekindle this economy - and fast. I think its working. In fact I know its working.
Two weekends ago I was in a very high end dealer in Las Vegas and they like a GM or Ford dealer are loaded with inventory with nobody to buy it. They aren't going out of business as they are well funded but in "the empty city" (as they are calling the foreclosure-rich town of Las Vegas these days) there just aren't enough people buying what they have to sell. Want a last year's 50 inch Runco at $0.15 on the dollar - call my friend Craig Pease? Want a $500,000 pair of CAT speakers painted in Ferrari Rosa Forte from a demo at Bellagio for truly pennies on the dollar - call Craig. Theta Casablanca? Runco projectors? Revel GEM speakers, Lexicon universal DVD-Audio/SACD players, Lexicon preamps, Krell stereo power amps, Krell CD players and more. Just call Craig because he's moving it all to get ready for the future. A 1080p, 3D, high definition wireless future - and he needs new gear in the showroom with its 11 active demonstration rooms. If you think about it, its not that different that a GM dealer blowing out cars on EBay other than the fact that the AV business isn't getting a government bailout but if you had to hear the lip service that AV manufacturers give towards "dealer support" you'd see how you could get an extra five percent off a nice big new order to help offset the trade-in costs. Everybody wins and everything moves forward for the first time in over a year in the world of specialty audio-video.
What is selling at Creative Home Theatre (I hate it when companies spell home theater wrong - maybe they could open a home theater shoppe or move to England!!!!) is Anthem AV preamps, 1080p plasmas, Paradigm Signature speakers and Transparent cables. Why? The value is there and if you want to make a big enough purchase - Craig will pay you fairly for your trade which is rare these days. Not everybody sells well on eBay. Not everybody wants to go on Audiogon.com and even for those who do - the prices are lower than ever on used gear yet in the world of home theater there are new Blu-ray players, AV preamps with Dolby TrueHD and DTS Master Audio and other HD goodies that consumers really want. Why not make your old AV receiver somebody else's problem while getting a bad-ass new one from Integra or an AV preamp from Anthem of Classe?
Just like with Alfredo and his truck - when the deal is good enough - people will take action. Audiophile dealers and home theater stores should apply the lessons from aggressive trade in programs like "Cash For Clunkers", the California incentive for hybrid cars from a few years ago or even my old Cello example. Of course AV dealers aren't funded by TARP money but they can still over-pay for a trade-in product in the right deal - especially if their vendors really mean it when they go on and on about "dealer support". The good news is that if your local dealer won't give you a killer trade-in I bet Craig will. He might also set you up with a suite at The Mandalay Bay and get you the VIP treatment on a little Vegas getaway. While your wife is off playing Wheel of Fortune slots - you can get your system completely tuned up while getting a top dollar trade in as well as a fair deal. Welcome to the new economy.
Keywords
Applying "Cash For Clunkers" to the Home Theater Business, Creative Home Theater in Las Vegas 702.257.1007, Craig Pease, Cello Music and Film Los Angeles, Used home theater equipment
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Comment on this article
9Jerry. Great article. Needs to be said. PS Audio has been actively trading "cash for clunkers" for the last 90 days and giving 100% MSRP on trade-ins. We've been treating this as a special that ends this month but it's been so successful we're considering making it permanent at a later date.
Thanks for bringing this to the audio world's attention.
Jerry. Great article. Needs to be said. PS Audio has been actively trading "cash for clunkers" for the last 90 days and giving 100% MSRP on trade-ins. We've been treating this as a special that ends this month but it's been so successful we're considering making it permanent at a later date.
Thanks for bringing this to the audio world's attention.
Gee why don't you just tell EVERYBODY to go to their local dealer if they sell the same stuff, use their time to learn all about it, and then call Craig so he can undercut the dealer who educated the guy in the first place.
It may seem like good business, but giving stuff away, especially into another dealers environment is just wrong. So thanks lots.
Small detail...'theatre' is not an incorrect spelling but rather a more commonly used spelling in England (and many other countries, for that matter). 'Theater' is more often used in the U.S., but both spellings are acceptable. 'Shoppe', on the other hand, is an old English spelling for 'shop' and is no longer recognized as a correct spelling. Unfortunately some people find it cute to use this word. If you question this, I would refer you to the online Cambridge dictionary, which recognizes both British and American English spellings.
I was being an American PIG (for effect)
In America - the term is "Home Theater" Las Vegas is about as American as a city gets. I have NO idea why they call themselves what they do.
WHY would you build an odd spelling into a URL even with a 301 redirect?
Theatre is not the old english spelling, like shoppe or olde.
The use of the word “theatre” goes back to the turn of the 20th Century. Most of American society, particularly those who owned live theater venues, looked upon the new cinema art form as nothing more than a bawdy fad that would soon collapse under its own low-class offerings.
To make a distinction between the “legitimate stage” and the cheap mass produced moving picture productions that had everyone seemingly getting their own piece of this new-fangled pie a line was drawn.
This line divided those venues that offered specific types of entertainment. Live shows that performed on stages without screens remained “theaters” while the new form of entertainment, moving pictures, were shown on screens without a stage for live productions and were, therefore, called “theatres”.
Having this unique spelling informed the public what type of entertainment they were going to see.
Of course, the two-name distinction lost its relevance quickly once the general public began to embrace movies not as the bawdy display of yore but a medium that was growing in sophistication and class. Soon, both forms of entertainment were in the same venue. Comedy, dancing and singing acts would perform prior to the “shorts” which were followed by the “feature attraction” trailed (remember this word) by what was coming next week using snippets from that feature film that, in industry slang, became known as “trailers”.
Today, the line has faded away with history. The only people who are conscious of the distinction are motion picture exhibitors, who name their companies, and companies that own venues strictly for live performances. Take a look at the entertainment section of your newspaper and you’ll probably see the two words used loosely all over the page.
So, no actual claim can be made by anyone, purist or not, that by using one word or the other has its proper usage. Rather, the distinction is one of tradition only.
I can not believe you folks are supporting the cash for clunkers. Cash for clunkers is doing no different than what the Dems did on the housing market. Lets just extend more credit to all those people who can't afford a new car. Brilliant idea. Just like bailing out the banks, and the auto industry. This Country is headed down the drain because of people like you all. You should be ashamed of yourselves.
Trevor,
What the hell are you talking about? Seriously, turn off the Glen Beck and open your mind.
First of all - if you don't like paying taxes please allow me to extend you the first offer to find another first world country that you can have anywhere CLOSE to the economic opportunity that you have here and pay less tax. Wait, you can't find one? That's because it doesn't exist.
You mention Dems and the housing market - what about what the Republicans did in 1978 in California with Prop 13 that ultimately got Regan elected here as a gov. Prop 13 locks property taxes in without any increase in percentage. So what happens is a Boomer in his late 30's buys a house in say Laguna Beach and pays in 1980 dollars say $5,000 a year in taxes. This guy today pays the same $5,000 in taxes while his neighbor might be paying $60,000 or more per year for a lesser house. Its TOTAL inequity. The age discrimination that it was supposed to end with older people needing to sell their homes in CA has now reversed so that young people are FLEEING the state while Boomers don't pay their fair share.
Warren Buffett asked Arnold to repeal (even slowly) prop 13 and he refused to even deal with the topic.
CA schools were ranked number one in the late 1970's. Today they are ranked number 49 in the country despite the fact the the CA economy is the 7th largest in the world.
Lastly, how's the DOW doing since Obama took over? Pretty good. How did Clinton do? Allow me to remind you that it was the longest economic boom in the history of the country. If you love money - you are a democrat. Tell that to Rush and his buddies. Its not about paying less tax - its about making more money, investing in the future and growth.
Jerry,
This is great news! Please let Craig know that I am ready to trade my $11,495 Runco 50" plasma that I bought last year (which now sells for $4495) for a new $9,995 Runco 65" plasma. This way I get $1,500 back and go from a 50" to a 65" 1080p plasma...
While I am at it maybe I should trade in that $30,000 Kaleidescape System for a $7,500 Niveus so that I can have the HD upgrade and pocket the $22,500 difference. The icing on the cake is that I will get to enjoy my VIP treatment at a Mandalay Bay Suite during my little Vegas getaway courtesy of Craig.
But seriously, what are you thinking?! You are lacking some fundamental PR skills my friend... Any consumer that reads this article is going to think that they should get the world on a string and if they don't they are getting ripped off, which is going to make the effects of the recession even worse for the retail shops. Any dealer that reads this article is going think that you are undercutting them by trying to direct all sales to Craig Mart.
I think the message you were trying to send was that AV Retailers need to get creative to drive sales in this economy and that a trade-in program is worth considering as it gives the consumer some incentive. Obviously the trade-in value would vary on a case by case basis depending on condition, age, and what is being purchased. Lastly, you forgot to say support your local AV Retailers...
P.S. Consider saving your political views and the American PIG comments for your personal life.
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