From mcleland@gmail.com Fri Sep 24 06:29:21 2004
Subject:Re: New B3 for Half Price!

I've been following this discussion for a while and thought I'd give
my 2 cents on the subject of dealer credibility. Let me preface this
by saying that I've been in the sales business for about 15 years
(high-end computing), so I'm drawing some parallels here to my own
business.

About 5 or 6 years ago my wife and I decided to buy a baby grand piano
for our great room. We visited 3 or 4 piano showrooms in the local
area, each one seemed to have an "exclusive" line of pianos. I had
purchased "The Piano Book" to help me understand what to look for
(btw, it's a *great* book for anyone interested in pianos and their
history).

Anyway, to sum up my experience in retrospect, I would compare the
buying process with the worst sort of used car dealer experience that
you can imagine. Here's the details:

When we finally settled on a particular piano (by playing it, of
course), we started trying to figure out what the price would be.
This particular 5'9" piano was selling for $14,000 I was told, but
because there was a sale, or whatever, they would let it go for only
$11,000, including delivery, setup, and two free tunings. *Because* I
was an informed consumer, and *because* I had done some research on
prices, I knew this was BS and we left the dealership to go to our
second choice at another store. When we got there, it was pretty much
the same story, highball the price and squeeze the customer for as
much as you can. We were unable to come to any agreement there, so we
left that store as well. By this time, we were feeling annoyed and
kind of PO'd because it was just too hard.

Anyway, a couple days later we decided that we still really liked the
1st piano, and I decided to call the salesman and try to work out the
deal. It so happened that when I called back, the salesman wasn't
working that day, and I ended up speaking with the sales manager. The
experience was totally different, and would you believe that we ended
up paying slightly less than $7000 for that very same piano? The
salesmanager understood that I was a serious buyer, but as an informed
consumer I would not be taken lightly. She chose to move the piano
for less (exorbitant) profit, instead of watching me walk out the
door. I still don't really know if I got the best deal I could have,
but it was within my budget and we felt good about it.

Needless to say, when we went back to close the deal and hand over the
money, the salesman was back and he was *not* happy with me. I guess
that extra $4000 in profit probably would have made a big difference
in his commission check, but that wasn't my concern. I was greatly
entertained by his pissy mood and general attitude that I screwed him.
I guess he wasn't used to that, since he was normally in the position
of power, holding the cards (pricing, availability). He was an older
gentleman, who told me that he had been selling pianos and organs for
40 some years. I'm sure he's retired by now.

I guess my point in all of this is that the marketplace is changing
rapidly. Goods that used to be available only through traditional
channels, with nebulous pricing and little or no competition can now
be bought in a free market environment, where supply and demand set
the pricing. People that whine about eBay or other internet channels
need to get over it and start figuring out other ways to make money
from their business. If someone is willing to shell out 5 figures for
a new organ sight unseen, more power to them.

In my business, which has traditionally been product based, 5 years
ago we could see typical margins in the 20-40% range on enterprise
computing equipment. Today, in some cases we are bidding computer
hardware at *cost minus 2%* in order to win business. The environment
has changed drastically, and to survive we've had to move to a
services model -- selling hardware is not the goal, but a necessary
component of a services sale.

Please don't take any of this personally, it's just my opinion but one
that's based on my own experience.