PS Audio terminates all Dealers in the USA

[Masterlu]

Originally Posted by W9TR

They will need to invest some or all of their now higher margins into expanded marketing, more show coverage, and expanded product development efforts just to stay viable. Even the 30 day home trial for speakers will be expensive to manage.

Can you imagine the labor, logistics and cost on all the returned speakers.

[cleeds]

Originally Posted by Detroitrock

Doesn’t seem like a positive move when a company fires the sales team.

Agreed! I also question the efficiency of the direct-to-consumer sales model in hi-fi. Yes, it "cuts out the middle man" and avoids one level of markup. But the cost to service the customer doesn't vanish - it remains. So while it may be a lower net cost solution to distribution, it can't replace the value of a good dealer who knows his customer.

I understand the adage that "business is business" and perhaps PSA had to make this choice. But in so doing, I think a whole swath of potential customers will ignore them.

I was once the operations manager of a major distributor. (This was outside of the audio industry.) One Saturday, I stopped in to the office (a rare occurrance) and overheard the owner giggling in his office. That was quite uncharacteristic for him - a guy who was a rather humorless sort. When I peaked into his office, I saw he was signing commission checks for the sales reps. When I asked why he was so happy, he answered that the checks were especially high that month and that when the reps were making money, we were all making money. And this was from a guy who was known for being a penny-pincher.

The cost of sales is just part of business. Lowering the cost doesn't necessarily improve the end result.

[Masterlu]

Originally Posted by cleeds

Agreed! I also question the efficiency of the direct-to-consumer sales model in hi-fi. Yes, it "cuts out the middle man" and avoids one level of markup. But the cost to service the customer doesn't vanish - it remains. So while it may be a lower net cost solution to distribution, it can't replace the value of a good dealer who knows his customer.

I understand the adage that "business is business" and perhaps PSA had to make this choice. But in so doing, I think a whole swath of potential customers will ignore them.

I was once the operations manager of a major distributor. (This was outside of the audio industry.) One Saturday, I stopped in to the office (a rare occurrance) and overheard the owner giggling in his office. That was quite uncharacteristic for him - a guy who was a rather humorless sort. When I peaked into his office, I saw he was signing commission checks for the sales reps. When I asked why he was so happy, he answered that the checks were especially high that month and that when the reps were making money, we were all making money. And this was from a guy who was known for being a penny-pincher.

The cost of sales is just part of business. Lowering the cost doesn't necessarily improve the end result.

[Still-One]

Originally Posted by cleeds

Agreed! I also question the efficiency of the direct-to-consumer sales model in hi-fi. Yes, it "cuts out the middle man" and avoids one level of markup. But the cost to service the customer doesn't vanish - it remains. So while it may be a lower net cost solution to distribution, it can't replace the value of a good dealer who knows his customer.

I understand the adage that "business is business" and perhaps PSA had to make this choice. But in so doing, I think a whole swath of potential customers will ignore them.

I was once the operations manager of a major distributor. (This was outside of the audio industry.) One Saturday, I stopped in to the office (a rare occurrance) and overheard the owner giggling in his office. That was quite uncharacteristic for him - a guy who was a rather humorless sort. When I peaked into his office, I saw he was signing commission checks for the sales reps. When I asked why he was so happy, he answered that the checks were especially high that month and that when the reps were making money, we were all making money. And this was from a guy who was known for being a penny-pincher.

The cost of sales is just part of business. Lowering the cost doesn't necessarily improve the end result.

Good points.

In my mind they will actually be increasing their Cost of Sales by bringing some of the functions currently handled by distributors and dealers in-house. Lowering your cost of sales is always a good thing.

[keef]

They must not be happy with the performance of their dealer network. I don't know how much pressure they put on their distribution network but most models include goals to beat the market. By how much is where reasonability comes into play. They must think they can do better. I am sure they toiled many hours over the decision to go direct.

I for one prefer to buy from a good dealer for all the reasons B/M offers. The most valuable for me is expertise and education. You absolutely cannot rely on Internet forums to make decisions on purchasing.

[Maks]

Originally Posted by cleeds

I was once the operations manager of a major distributor. (This was outside of the audio industry.) One Saturday, I stopped in to the office (a rare occurrance) and overheard the owner giggling in his office. That was quite uncharacteristic for him - a guy who was a rather humorless sort. When I peaked into his office, I saw he was signing commission checks for the sales reps. When I asked why he was so happy, he answered that the checks were especially high that month and that when the reps were making money, we were all making money. And this was from a guy who was known for being a penny-pincher.

The cost of sales is just part of business. Lowering the cost doesn't necessarily improve the end result.

100% true. All the great CEOs I've worked with have said they love signing big commission checks for that exact reason. It sounds like PSA is trying to go the route of Schiit (plz no puns), but if the list price stays the same there is no advantage to the consumer.

[RLF]

Originally Posted by Masterlu

They aren’t; take it from a dealer... Speakers are the most personal, and difficult sales to make. We aren’t talking about SonoS Speakers here.

Some Speaker sales take multiple visits/auditions.

I absolutely agree 100%. Before I purchased my last speakers, I made numerous visits to my local B&M dealer for audition of several brands and models with my own music before buying. I highly value personal service including set up and positioning of 100+ pound speakers in my listening room from a local dealer with a excellent reputation. I would never buy expensive speakers online.

[JMD]

If you happen to live in one of the not more than a dozen areas where that might be possible then that is great but most of us don't and the number of B&M dealers is going down not up. For me it is a minimum of 4 hours or for a better selection 7 hours one way.

[W9TR]

The only way I can listen to gear I’m interested in is one of the regional shows. B&M is dead to me and has been for a long time. It’s mostly driven by geography and my preference to live away from major metro areas.

Too bad as B&M used to be the prime path for listening to great gear. Now it is mail order and try in your home before you buy. It’s different but not necessarily better or worse. In home trials are a great business model - it just needs to be refined to make it easier.

[telematic]

It looks like High End audio market is dying.