Expensive analogues - DH Rants...

[David Halliday (Volt Computer)]

I will start off by saying that I am biased - I owned a retail store for
twelve years and went out of business about six months ago ( this is why
I am working for the beast ) <grin>

*BUT*

Someone who opens a store may well be doing it for love of the product
but there are some basic economic realities that they need to deal with
or they will not even break even.  I sold computers and did consulting
and later got into a DTP and copy business.  I did not have a fancy
storefront, I was on the second floor across the street and a block away
from a mall ( definitely *not* prime retail space ) but my rent was
still over $1,700 per month.  Business telephone service is about three
times what residential service. Employees cost a fair bit beyond their
salary - for someone working at $10/hr, the real cost to the employer is
more like $17/hr ( social security, Medicare, workman's comp, etc. ).
Business taxes eat up about 20% off the top ( not counting sales tax ).
Any sale made with a credit card has 3-5% of the sale price taken as a
fee from the processing company.

As for the huge markup - the store owner pays shipping, the owner pays
taxes on the inventory, if the unit doesn't sell and the owner has to
sell it "at dealer cost", this is a double whammy: the owner looses that
profit and the unit was taking up space that would have been occupied by
something that *would* have generated profit.

My two favorite kinds of customers:
#1) - the person who comes in and says that they are really interested
in getting a Pan-Galactic Gargleblaster but they want to ask a few
questions and see a demo...  These "few questions and a demo"  expand
out into about three hours of one-on-one service.  They walk out the
door saying that they are going to come back in a few days and buy the
unit since they really liked the service they got here...  I would not
see this person again for almost a month.  They would then come in and
ask me to help them with their Pan-Galactic Gargleblaster  that they
bought mail-order.  When I tell them that sure, I will do this at
standard shop rates, they get angry saying that I helped them before and
why will I not help them now...  Get a clue!

#2) - the person who walks in with an ad from a mail-order vendor and
wants me to match that price.  They  are amazed that I cannot/will not
match that price "just to make the sale".

I must apologize to the list for venting like this but this is a sore
spot for me. Dealers serve a definite function and they have definite
costs and these costs are borne in the markup passed to the customer.

Their 40% markup is about the minimum to survive, anything less can only
be done if they move a few products, don't support the products and do
high volume ( look at your local Office and Computer warehouse chains )


> -----Original Message-----
> From:	Erik Schuijers [SMTP:eriks at stack.nl]
> Sent:	Friday, September 19, 1997 1:55 AM
> To:	synth-diy at horus.sara.nl
> Subject:	Expensive analogues.
> 
> Hi Everyone,
> 
> as usual I've upset a lot of people. This time  with my mail about the
> newer breed of
> analogues. 
> 
> First of all I want to say that it wasn't my intention to do this!
> 
> Furthermore, I still think analogues are overpriced.... but you've all
> made
> me notice one thing: it's those ****** dealers who make the prices so
> high.
> I thought about it, because they about sell twice the price at which
> they
> buy!
> 
> Sorry for all the fuzz!
> 
> Erik