What Hi Fi show 2014 is announced

[panditji]

Dear All, as of February,2014, the import duty on amplifiers is 14% in total and for speakers it is 27% in total......the Indian dealers want extremely high profits and they do not want to put in money in keeping inventory....so they order 1-2 pieces and that too by air and then crib about the costs being high....

 

[dillihifi]

It seems panditji has hit the nail on the head. It seems that since we have such low volumes therefore the prices are going on the higher side.

Further it seems that I have inadvertently left out our Gurgaon based Sound by Design who is also selling their stocks of M2Tech Dacs at prices which are nearly the same as international prices. There must be dealers like this everywhere who there for the passion of music and hifi and not just for maximizing profit

 

[dillihifi]

Respected Sir,

What you say is right & good;
The Only 'issue' I see here is 'dealer margin'

Let me try and explain;

All SRP's have a 30 % margin included for the Local Dealer.
So, if a product imported by a D & D in Mumbai is sold by a Dealer in ND then the 'local' dealer takes 30 % as his 'margin'

Now, in the case of the person you mentioned - I do not have the facts & therefore will not comment - but if a person wants to buy his products in Mumbai - from a Dealer - will he still get it @ German List Price ?
If so, then it is 'super' !

:indifferent14:

I do not understand how this kind of pricing will work, it will be cheaper for me to fly down to Mumbai and buy the equipment from the Mumbai D&D rather than paying a 30% overhead to the Delhi dealer.

Regarding Jochen I have written about him since he himself had stated somewhere in the forum either this one or the audiophile dot net about his pricing policies.

The standard industry norm for F&I is around 4%-6% of the EXW/CIF price. Of course there may be exceptions to this but if a differential pricing model is followed in our country surely in this day and age of information exchange via our forums we can get the equipment at the cheapest point. It is not like the TV ad - Kolkata's warranty is valid in Kolkata only. It is only in audio video segment we see such disparity in pricing otherwise in the computer and networking industry the prices are more or less same across the country as such.

 

[dheerajin]

It seems panditji has hit the nail on the head. It seems that since we have such low volumes therefore the prices are going on the higher side.

Further it seems that I have inadvertently left out our Gurgaon based Sound by Design who is also selling their stocks of M2Tech Dacs at prices which are nearly the same as international prices. There must be dealers like this everywhere who there for the passion of music and hifi and not just for maximizing profit

Yes even I had similar experience in dealing with sound by design. they are not into maximizing profit. Even though I am situated in Pune, I feel much comfort to deal with this Gurgaon based dealer.

 

[bhagwan]

I am not going to get into specifics;
However, any dealer has to pay for an establishment - rent / power / staff / stock etc.
He also offers 'demo' & 'installs' the product for the client.
Therefore he is given a 'margin'
What this margin should be - I am not one to comment.
I just know that Dealers get between 20 % & 30 % for their 'efforts'
What different D & D's do for their dealers - I am not aware of the specifics.

 

[ghatgepatil]

Let me chip in here with the export-sales policy of 'most' international companies. It may or may not apply to audio-video products, but the below is followed by most who export.

1. For their local markets, price realization is very high. If a product retails for '100', other than when 'clearance sale' gets announced, the product might get sold for '85 - 90' with customary discounts applicable.

2. Unlike what is 'thought' by all, export-sales hardly brings in 'pure' profits for the manufacturer. It is an excellent means to bring in 'foreign exchange' for the country, hence, lots of export oriented incentives are provided by all Governments. All manufacturers vie to do maximum turnover in export-sales keeping profit margins wafer thin, if required.

3. Most overseas manufacturers rely on local agents/distributors to sell in individual territories. I had come across 'most' offering a minimum off-take price of '50' for a said product. Anything above '50' became my profit, while the price-list would continue to show MRP as '100'.

4. With the latest Indian 'Customs Duty' ruling coming in recently, overseas manufacturers have been instructed to provide MRP of all products in Indian Rupees on each of the product cartons to make sure that the duty component is unerringly extracted.

5. So, if the Product MRP is marked '100', taking 30% customs duty on it, it becomes '130' duty paid. However, cost to local importer/distributor is '50' for the Product and the '30' he paid for customs clearance. The distributor is already having a margin of '50'. So, it should be possible for him to sell his wares @ overseas MRP, without feeling any pinch!

6. Yes, if at the retail point the end user is made to pay in the band of '150 to 200', just as it is happening now, well ....:sad:

 

[panditji]

I am not going to get into specifics;
However, any dealer has to pay for an establishment - rent / power / staff / stock etc.
He also offers 'demo' & 'installs' the product for the client.
Therefore he is given a 'margin'
What this margin should be - I am not one to comment.
I just know that Dealers get between 20 % & 30 % for their 'efforts'
What different D & D's do for their dealers - I am not aware of the specifics.

Dear Sir, are you saying that the dealers abroad do not have to pay for rent/power/tariff/stock etc? Last week only in Hongkong, I visited stores where a single retailer was selling Accuphase, Luxman, Esoteric, Exposure, Spendor, PMC, Wadia, Meridian etc etc all under one roof...They had almost 40 different speakers on display and about 30 different amps, CDPs and DACs..not to mention the varied selection of cables....Now this same guy was selling the Accuphase amps at abut 40% of the Indian MRP...and this guy had 6-7 staff members all of whom live in Hongkong which is an expensive city....
The Wilson Audio retailer had a pair of Sophia 3, 2 pairs of Alexia with Jeff Rowland pre-power and integrated, MBL CDP, Pre-power and tons of other stuff on demo...The Sophia 3 was retailing for almost 10 lakhs rupees...
So are you saying that the Indian dealers have higher costs than those mentioned above without keeping any stock for demo???? Also the cost of electricity, staff, rent and other overheads would be far higher in HK, SG, Europe and US than India...

 

[bhagwan]

Yes Panditji,
You are right;
Indian Dealers are 'Greedy' I suppose.
Your logic is sound.
The only difference is that HK has Zero Import Duty & we have 30 % [approximate]
Yet, the Indian Retail Prices are way too high - I feel - same boat as you;

 

[ranjeetrain]

What we all inadvertently ignore is the fact that the US SRP (which we use as a benchmark most of the time) also has an import duty component (for products not made in USA).

Besides, the rentals are much higher, utilities cost much higher, and staff cost is ridiculously expensive compared to our country. Yet, in USA dealers often sell at a pleasant discount. For some weird reason Indian dealers will tell you, their cost is US SRP + Freight + Customs + their margin. In other words they will convince you that 150% US SRP is their 'landing cost'. So they need some margin on the top of it. Go figure!

 

[prem]

Unless one is very choosy and extremely discerning some of the Indian made amps and speakers are pretty decent and great vfm. Norge, Pulz, Lyrita, Rethm, Acoustic Portrait, Cadence all have decent stuff at various price points. It's only when it comes to a source that there are practically no choices apart from Acoustic Portrait

 

[Thad E Ginathom]

Now, in the case of the person you mentioned - I do not have the facts & therefore will not comment - but if a person wants to buy his products in Mumbai - from a Dealer - will he still get it @ German List Price ?

Why not? Doesn't the German dealer have a margin too? Of course he does.

Somehow it is thought ok to take a European price, including local taxes and whatever (if imported there) duty may have been charged and the sealer's margin --- and mark that up.

I was quoted 2 lakh for a <1-lakh item (made in Germany). the words were, but we can talk about discount. I replied that it had better be 50% or else I might just as well buy an air ticket. I heard no more.

 

[panditji]

Yes even I had similar experience in dealing with sound by design. they are not into maximizing profit. Even though I am situated in Pune, I feel much comfort to deal with this Gurgaon based dealer.

There is no problem in maximizing profit but to crib that people go abroad and buy rather than the Indian dealers, that I have a problem with...

Even I give a high quote to my clients but when they tell me they are getting it cheaper, either I reduce my margin or lose out on the order..If I don't reduce my margin, then I should not cry about losing the order...It's the same in every business the world over....

 

[Soundstage]

From what I understand, the "accommodation pricing" in the hifi industry is 50% of the RSP. So don't dealers get the same kind of pricing from their Principals?

 

[bhagwan]

Why not? Doesn't the German dealer have a margin too? Of course he does.
I heard no more.

I am not sure;
If that dealer in question - from Bangalore - has a Dealer in Mumbai ?
Well if he does - I am not aware of that besides, I have never contacted him for anything - because there was nothing I needed that was sold by him.
I am certain that all D & D's have dealers & those 'dealers' [all over the country] are 'covered' with 20 % to 30 % margin for any / all the audio gear that they sell...

 

[Hiten]

I guess If market is small, margin will be more.

 

[panditji]

If the margin is more, then the sales will be small.....it's a trade off...

 

[panditji]

Also if margins are reasonable, the price is lower and the sales get higher...

 

[shafic]

Also if margins are reasonable, the price is lower and the sales get higher...

Good product + reasonable price + low margin + good service = more sales.

 

[mpw]

Good product + reasonable price + low margin + good service = more sales.

good product = good price
low margin is a risk

more sales depends on the maturity of the market me thinks

the rethms are fine examples of a good product at a good price ( though we in India find it expensive even compared to international pricing ).. yet the numbers of rethms are lower as mature buyers who understand the product to exploit it are lesser ( as yet )

mpw

 

[ranjeetrain]

good product = good price
low margin is a risk

more sales depends on the maturity of the market me thinks

the rethms are fine examples of a good product at a good price ( though we in India find it expensive even compared to international pricing ).. yet the numbers of rethms are lower as mature buyers who understand the product to exploit it are lesser ( as yet )

mpw

Who determines what margin is low, what margin is high?

Everyone seems to think 20-30% that dealers get is "enough". But from dealers' perspective that is "low"? Why?

What would make it "high" or "good", or "appropriate" for them? 50%? 60%? 70%? Here they start from around 100%. That is pure greed. Specially considering that they have very little on actual demo available for audition. 100% profit for what? For drop-shipping? Sorry, if less than that seems "low" and "risky" they shouldn't be in hifi business.

Rethm example is not appropriate in the context. Topic here isn't what products people want or don't want to buy, topic is - dealers in India want huge mark up. Rethm is a product for niche market. It's low sale volume has nothing to do with it's pricing, it due to it's appeal.