Big box stores kill the industry by selling what were specialty brands. It doesn't help this industry that various internet forums and chat rooms spread disinformation about the value of any dealer, outside of an online environment. Sadly, there is a perception that, by and large, a local dealer offers no value-add. Naturally, in the case of Best Buy et al, that's probably true. This perception however spreads to the local guy, spurned because their prices are a little higher than some random gray-market guy online. How does this tie in? If Best Buy and other warehouse stores sell what were the province of specialty brands, the line blurs, and now, smaller companies look like a more-expensive equivalent to a big box store.

We all knew years ago when Ultimate spread across the country that this was the future. At least they tried with better brands and, at the time, personnel. Now, it's all the same.

Jerry,

You always offer great insight and comment regarding our industry. Unfortunately what you say above is true. As independant dealers and CI guys we must keep our eye on the manufacturers that get sucked into this and continue to seek out and support those that don't.

Great article. Sadly, this isn't a new story. This has been going on for the past 30 years. The difference today is that the bad economy has closed down many specialty AV manufacturers and retailers. It just hurts the dwindling industry more than it did in the past. That said, this is a problem that will always exist. I can't say I wouldn't cash in on the Big Box buy in, if I were near retirement age.
I personally think the industry is hitting an age barrier. Younger consumers have not been marketed to appropriately, and most manufacturers are run by people on the verge of retirement. Although, there are a fair amount of young upstart retailers, where are the young speaker and amplifier designers? Heck where are the young audio product importers? The industry is stuck with magazine writers with their head stuck in the sand, and web bloggers, who, if asked couldn't point out the spider of a loudspeaker woofer. Things will get better, but things are gonna get worse first.

Great article. Sadly, this isn't a new story. This has been going on for the past 30 years. The difference today is that the bad economy has closed down many specialty AV manufacturers and retailers. It just hurts the dwindling industry more than it did in the past. That said, this is a problem that will always exist. I can't say I wouldn't cash in on the Big Box buy in, if I were near retirement age.
I personally think the industry is hitting an age barrier. Younger consumers have not been marketed to appropriately, and most manufacturers are run by people on the verge of retirement. Although, there are a fair amount of young upstart retailers, where are the young speaker and amplifier designers? Heck where are the young audio product importers? The industry is stuck with magazine writers with their head stuck in the sand, and web bloggers, who, if asked couldn't point out the spider of a loudspeaker woofer. Things will get better, but things are gonna get worse first.

Sometime in the early 1950’s, a furniture manufacturer salesman ran into his sales manager’s office with their first purchase order from Sears. Ownership was thrilled. The new account alone would exceed their sales projections. Larger orders followed. Smaller accounts were put on back order to fill Sear’s POs. Eventually Sears devoured their manufacturing capacity. Their now former smaller accounts looked elsewhere for product.

Sears then began the process of renegotiating for lower pricing and longer payment terms with each successive order. The manufacturer had no choice. Ultimately profits eroded to the point that the manufacturer closed its doors. Sears moved on to yet another hungry manufacturer.

My Father gave me this account many years ago. He worked in furniture manufacturing after returning from the European battlefields of WWII. The big purchase order is an old story.

Yeah, it is an old story. And AV manufactures have a history of using the credibility of specialist to build their reputations. I can remember when Denon, NAD, Paradigm, and others were complete unknowns until specialist promoted them. Credible specialist qualify, recommend, and demonstrate.

Initially the big boxes will yield a good run of purchase orders. But it will not come from their ability to sell and demonstrate. It will ride on the previous efforts of specialist. Eventually, as consumer memories of specialist demonstrations fade, the purchase orders will recede. The big box will lose interest in the brand, and another “hot” manufacturer will take its place.

Many manufacturers are running for their business lives in the “Great Recession”. As someone mentioned, a recession blitzed independent dealer base can no longer sustain their overhead. So I will cut them some slack. It is not an easy decision to make.

However, some manufacturers are poised to withstand our economic storm. They have the financial wherewithal, revised lower overheads, and an understanding of their customer’s passion for audio. They are planning strategy and outlining the implementing tactics to be unveiled when the economic climate turns positive. Lenbrook (NAD, PSB) and Paradigm come to mind. They among others, in partnership with the surviving specialist, will lead AV into the next economic cycle.

Hmm, I will have to disagree with the previous comments. I think this is an OK article, but also a thinly vieled attack on the two manufacturers listed in your keyword section. If you want to call someone out for their behaviour do it directly. Comment on how this big PO is hurting their products, and refer to them directly. Why beat around the bush? Bad form.

Furthermore, I fit into the age category identified as having the "age barrier" by one of the other posters. Usually when I go into a Specialty AV store, the salesmen make me feel out of place because of my age (30) or some unknown reason. Fine, I will take my money online rather than support a snobby saleman. I am a savvy shopper and do not think that I should pay more for something then it is worth. That brings me to my second concern for specialty AV stores, which is the overly high cost of some audio equipment. As an electrical engineer, I can open the product and identify the components used and the cummulative cost. Typical markups are far greater than actual cost of the device. What gives? It is an economics strategy called skimming the market. The fact is that most companies probably fail because they cannot maintain a steady market base.

PS - I never shop at BB and gave up most of their competitors a long time ago. Sadly my favorite local specialty chain went under years ago. However, I still frequent my local record (CD) shop regularly...

PPS - Internet direct retailers seem to me to be the complete opposite of the manufacturers who sell to the box stores. What are your thoughts regarding this supply chain?

Kelly,

Any specialty AV store should WORSHIP at your FEET as a 30 year old that is looking to spend on the good stuff.

The days of arrogant audiophile stores are ending now. They simply can't get away with this BS now or ever again. There just isn't enough consumer demand.

You have every right to get the ROYAL treatment from a specialty store. If you don't get it from one - look up another on our dealer locator. I don't care where you are - I can find you someone willing to take your business and sell you gear at a fair price.

This is a wonderful opinion. The things mentioned are unanimous and
needs to be appreciated by everyone.
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