Rocket or Swan or Axiom??

[Woochifer]

The alternative is for the Internet brand to offer free freight both ways -- an open invitation to be a speaker lending library -- and an indicator of excess margins, wouldn't you agree? Of course I offer the occasional freight guarantee, after the prospective buyer and I have taken the time to get to know one another and go over his expectations in detail. And yes, we take back nil. Even with free return freight. With our slim margins and high value, it's the only sensible route.

What you're illustrating is a dilemma as to who assumes the risk. Obviously, as a businessman, you would like to limit your own exposure, but by doing so, the risk with the two-way shipping charges gets transferred to the customer. In this scenario, it's up to the customer as to whether the reward is worth the upfront expense, as it is yours in determining which customers to offer the free return freight. But, given that you mention virtually zero returns, then why not extend the two-way shipping offer to all customers given that it would represent practically zero risk for your company?

I won't challenge your experience but I'll ask how sensible it is for a B&M dealer, already stretched to the limit by expenses, to line your trunk with his property, unprotected (and probably uninsured while in your possession) in the hope you'll not leave town. I've owned B&M for years and I went the extra mile then as I do now, but I would never risk my property like that...so how frequent is that policy?

It's pretty easy for a B&M retailer to minimize their own risk by simply drafting a credit card preauthorization, and when the customer brings the demo unit back, the store hands back that preauthorization slip. Again, no upfront investment (with internet direct purchases, a simple demo means that the credit card is charged, sometimes before the unit even ships, and for revolving credit customers, the interest charges accrue in the meantime). EVERY specialty audio retailer in my area encourages customers to borrow their demo units, but none of them just lend equipment out without some form of collateral. The scenario that you're referring to is one that I haven't seen.

Actually Swan is a proven brand in a volatile marketplace, and one of the direct-channel pioneers. My relationship with our manufacturer (some $100M large) goes back to 1996 and I was part of the design team in 1999. Your concerns are valid but in this case, let us calm your fears.

Jon Lane
The Audio Insider.com

Now I'm getting confused. I thought that av123.com was the Swan distributor until, for whatever reason, they quit selling the Swans. Then I didn't see anything on boards or banner ads about the Swans for almost a year, until people started mentioning that Audio Insider was the place to go for people interested in the speakers. If Audio Insider has been distributing the Swans since 1999 (again, I don't know if you have or not, so this is not an accusation), then I'd say great to have that kind of continuity. But, if it turned out that av123 quit selling the Swans and Audio Insider picked up the brand later on, then there indeed was a transitional period where customers were in limbo. It's good that you're promoting the brand and its stability, but if that scenario's true, then it will take time to prove Swan's long-term viability to potential customers. Even a long established brand like Mission disappeared from the U.S. market when their distribution relationship with Denon ended. Even though Mission's slowly trickling back into U.S. stores, a lot of their customers were left in the dark during the transition.

[TinHere]

Now I'm getting confused. I thought that av123.com was the Swan distributor until, for whatever reason, they quit selling the Swans. Then I didn't see anything on boards or banner ads about the Swans for almost a year, until people started mentioning that Audio Insider was the place to go for people interested in the speakers. If Audio Insider has been distributing the Swans since 1999 (again, I don't know if you have or not, so this is not an accusation), then I'd say great to have that kind of continuity. But, if it turned out that av123 quit selling the Swans and Audio Insider picked up the brand later on, then there indeed was a transitional period where customers were in limbo. .

I'm sure Jon can talk to exactly when the change happened, but I sure didn't read of any complaints about AV123 not backing up any products they sold or people left in limbo.

[Nich]

Well my search is finally over. I finally ordered the Axiom M60ti and I won't be returning these. Next to the B&W Nautilus 803 this was the best speakers that I auditioned. Lows; Mids and Highs are very clear. Not as bright as what people said. I had a chance to auditioned the Rockets RS750's few days before I ordered the M60ti and I thought it was too laid back for my taste. I gotta admit that the Rockets had an awesome fit and finish but you wont see these at my house. Too bad Rockets only offer two finishes. At the end of the day the M60ti is the clear winner over the RS750's. I've had these M60ti for a week now and I can't stop listening to it.

It was great experience with Axiom; Great customer service and Awesome products. I will be getting more speakers from them to complete my HT.

[TinHere]

Well my search is finally over. I finally ordered the Axiom M60ti and I won't be returning these. Next to the B&W Nautilus 803 this was the best speakers that I auditioned. Lows; Mids and Highs are very clear. Not as bright as what people said. I had a chance to auditioned the Rockets RS750's few days before I ordered the M60ti and I thought it was too laid back for my taste. I gotta admit that the Rockets had an awesome fit and finish but you wont see these at my house. Too bad Rockets only offer two finishes. At the end of the day the M60ti is the clear winner over the RS750's. I've had these M60ti for a week now and I can't stop listening to it.

It was great experience with Axiom; Great customer service and Awesome products. I will be getting more speakers from them to complete my HT.

It's always a good thing when personal preference and products get connected. I guess we can chaulk up another among the ranks of happy internet direct consumers. Enjoy your Axioms.

[Jon Lane]

What you're illustrating is a dilemma as to who assumes the risk. Obviously, as a businessman, you would like to limit your own exposure, but by doing so, the risk with the two-way shipping charges gets transferred to the customer. In this scenario, it's up to the customer as to whether the reward is worth the upfront expense, as it is yours in determining which customers to offer the free return freight. But, given that you mention virtually zero returns, then why not extend the two-way shipping offer to all customers given that it would represent practically zero risk for your company?

Like I said, offering to cover free freight, cross-country, on hundreds of pounds of premium, low-margin products is an open invitation for abuse. We ask our customers to share in our business model, and those that do realize huge savings. Were we to change to offer free freight across the board, obviously costs would rise, with you the paying customer ponying up the costs to cover all those who "buy" something, use it (or abuse it) for 29 days, and then start the cycle all over again. Plus a free-freight scenerio is no different than a B&M that offers free unlimited demos (which in this day and age of profitable custom installation dealers who work for a living and failing boutiques who can't get by selling $1000 cables with 70% margins is uncommon.) Both methods simply invite abuse, and both methods therefore cost huge amounts. Believe me, if it made sense for our customers we'd do it. It doesn't, anymore than 50% B&M margins do, IMHO.

Let's try asking how many other industries offer free unlimited product use at the dealer's risk -- Internet or not; it doesn't matter -- without passing along those costs? Do we want to return to the days of $1000/pr satellites (1990 dollars) or do we prefer $1000/pr complete floorstanding models (2004 dollars)? More importantly, how much overhead in the B&M model is already passed along to you, the (possibly) buying customer? With our business model that overhead is a tiny fraction...and we pass along the savings.

It's pretty easy for a B&M retailer to minimize their own risk by simply drafting a credit card preauthorization, and when the customer brings the demo unit back, the store hands back that preauthorization slip. Again, no upfront investment (with internet direct purchases, a simple demo means that the credit card is charged, sometimes before the unit even ships, and for revolving credit customers, the interest charges accrue in the meantime). EVERY specialty audio retailer in my area encourages customers to borrow their demo units, but none of them just lend equipment out without some form of collateral. The scenario that you're referring to is one that I haven't seen.

Remember that they still have to pass along the wear on all those demos as an ongoing expense, whereas we offer them for sale as immediate B stock (at a rate of well under 1 in 100 sales, making the total expense contribution just about moot.) They also pass along the costs of product with an average of 50% margin, while our system has none because we sell direct.

Now I'm getting confused. I thought that av123.com was the Swan distributor until, for whatever reason, they quit selling the Swans. Then I didn't see anything on boards or banner ads about the Swans for almost a year, until people started mentioning that Audio Insider was the place to go for people interested in the speakers. If Audio Insider has been distributing the Swans since 1999 (again, I don't know if you have or not, so this is not an accusation), then I'd say great to have that kind of continuity. But, if it turned out that av123 quit selling the Swans and Audio Insider picked up the brand later on, then there indeed was a transitional period where customers were in limbo. It's good that you're promoting the brand and its stability, but if that scenario's true, then it will take time to prove Swan's long-term viability to potential customers. Even a long established brand like Mission disappeared from the U.S. market when their distribution relationship with Denon ended. Even though Mission's slowly trickling back into U.S. stores, a lot of their customers were left in the dark during the transition.

Swan has maintained a presence in the US continuously since the mid-nineties. And they too are able to switch distributorships, which they did. Put another way, not one customer has ever been left aside by Swan International, and all models are either in ongoing production, or if not, still have the complete backing of Swan to this day. It's a record we're proud of.

[Jon Lane]

I'm sure Jon can talk to exactly when the change happened, but I sure didn't read of any complaints about AV123 not backing up any products they sold or people left in limbo.

Precisely. No Swan customers have ever been left aside, either under my watch or, to my knowledge, under AV123's. I think that's a record the rest of the industry can respect. There are literally scores of speaker brands on the market, and the costs of traditional marketing and distribution is intense. They don't all make it...

[Bryan]

Just to clarify an earlier post: While nOrh isn't the best nor greatest out there (truth be told there is no such thing) a lot of the bashing of the company was because of where the speakers were made (Thailand) and their looks. Not because of their sound.

All internet only/factory direct companies take a risk. One unrectified complaint can mean tens of thousands of dollars of lost revenue. To most of their credit they will bend over backwards to make things right. (SVS is a prime example of this, often openly troubleshooting a problem with a customer.) They can't afford bad press. That is part of their upside. Part of their downside is you can't stop by at any old Best Buy, Circuit City, Wal-Mart, etc. and listen to them.

[soonerczech]

Since we are talking about internet direct speaker purchasing, why hasn't anybody brought up Hsu and SVS subs? While some may want to call it cultish and insane for not auditioning a set of speakers before you buy them, you have to realize that not everybody has great B&M stores that actually treat you like a customer instead of just schmo of the street. If some people weren't so cultish about these speakers, would we have even heard of SVS or HSU? On another note, I feel like people who use speakers for home theater are being somewhat denegrated in this thread. Oh, we only use a receiver to listen the speakers. No offense, but as everyone has said "its all in how you perceive the sound coming from your speakers" . Your $3000 solid state tube amp may sound like utter crap to me. Its all about personal preference. Sometimes I prefer the sound of a good vinyl record to a digital CD. In closing, sometimes you have to take a risk to get the reward.

[TinHere]

[QUOTE=soonerczech In closing, sometimes you have to take a risk to get the reward.[/QUOTE]

Exactly why the internet direct companies are gaining market share and some b&m stores are struggling or have gone out of business. Subwoofers are the safest on line speaker purchases, because all they have to do is perform and there isn't as much subjectivity involved. Of course some bass nuts will say otherwise, but IMHO it holds true for the "average" consumer who can get great bass at a good price in comparison to the b&m offerings.

[RGA]

I would not say that necessarily everyone would agree on the advantages of internet sellers.

This review by an owner and the follow-up opinions at bottom seem to suggest that while they are generally initially impressive people find them less than exciting long term. Most reviewers spend very very little time with a product...it's all nice to have the pyrotechnic sound of WOW check that out - it's another thing to be able to relax with the system. IMO if a speaker exhibits that "WOW gee whiz" sound at first it will probably be the exact speaker that i won't want.

http://www.audioasylum.com/audio/spe...es/156829.html

[Woochifer]

Like I said, offering to cover free freight, cross-country, on hundreds of pounds of premium, low-margin products is an open invitation for abuse. We ask our customers to share in our business model, and those that do realize huge savings. Were we to change to offer free freight across the board, obviously costs would rise, with you the paying customer ponying up the costs to cover all those who "buy" something, use it (or abuse it) for 29 days, and then start the cycle all over again.

I think you're missing my point. By not extending the two-way shipping costs to all customers, you're basically building the business model around shifting more of the upfront costs and risks to the customer. It's that simple. It allows you to lower the cost of the product, but it is a higher risk to the customer for that potential reward. This type of risk to the customer is not there with a lot of B&M stores, because the customer does not assume any upfront costs, aside from a credit preauthorization to cover the dealer against any damages or losses.

By saying that offering two-way shipping to customers is an "open invitation to abuse" basically undermines what you've asserted about the almost zero return rate on your products. If returns are not an issue, then making a two-way shipping offer would also not be an issue. It's a cost to you ONLY if the customers choose to exercise the privilege, and a near zero return rate should equate to a near zero return shipping cost. But, by saying that two-way shipping would raise business costs and create all sorts of problems, then you're basically acknowledging that the return shipping costs for customers in fact could very well represent a cost barrier that impedes customers from returning speakers that they purchased and are not completely satisfied with. This is very different than borrowing a pair of speakers from a store for evaluation purposes with no expenses directly incurred by the customer.

Plus a free-freight scenerio is no different than a B&M that offers free unlimited demos (which in this day and age of profitable custom installation dealers who work for a living and failing boutiques who can't get by selling $1000 cables with 70% margins is uncommon.) Both methods simply invite abuse, and both methods therefore cost huge amounts. Believe me, if it made sense for our customers we'd do it. It doesn't, anymore than 50% B&M margins do, IMHO.

Let's try asking how many other industries offer free unlimited product use at the dealer's risk -- Internet or not; it doesn't matter -- without passing along those costs? Do we want to return to the days of $1000/pr satellites (1990 dollars) or do we prefer $1000/pr complete floorstanding models (2004 dollars)? More importantly, how much overhead in the B&M model is already passed along to you, the (possibly) buying customer? With our business model that overhead is a tiny fraction...and we pass along the savings.

There's no such thing as a "free unlimited demo", and no store that I've visited has free unlimited demos. Whenever I borrow a demo unit from a local dealer, I have to agree to return it by a certain date. If not, then my credit preauthorization gets processed, and I've effectively bought what I borrowed. IMO, that's a fair exchange where risk is assumed by both parties, so how's this an invitation to abuse? And I still have the option of just listening to and trying out a unit at the dealer's demo room. It's nice that you're not passing along a lot of your overhead to your customers, but if they want to compare your products to others, particularly other internet-direct brands, then it's the customers that are assuming their own upfront and irrecoverable direct costs for that privilege. It would be like having to buy a car directly from the factory just for the privilege of test driving.

Remember that they still have to pass along the wear on all those demos as an ongoing expense, whereas we offer them for sale as immediate B stock (at a rate of well under 1 in 100 sales, making the total expense contribution just about moot.) They also pass along the costs of product with an average of 50% margin, while our system has none because we sell direct.

How's the wear a cost, when all they do is later discount the demos and sell them open box? And given that the demo units are rarely priced at 50% off (which is the margin that you're claiming), the store still maintains some margin on the item.

Your system has NO margins? How do you sustain a business without maintaining any margin on what you sell?

[TinHere]

I would not say that necessarily everyone would agree on the advantages of internet sellers.

This review by an owner and the follow-up opinions at bottom seem to suggest that while they are generally initially impressive people find them less than exciting long term. Most reviewers spend very very little time with a product...it's all nice to have the pyrotechnic sound of WOW check that out - it's another thing to be able to relax with the system. IMO if a speaker exhibits that "WOW gee whiz" sound at first it will probably be the exact speaker that i won't want.

http://www.audioasylum.com/audio/spe...es/156829.html

We agree.

Shouldn't this response be somewhere else? I have said words to the effect elswhere that "sizzle" can be misleading and people shouldn't base desicions on a brief audition. That is why I am a proponent of in home auditions with your gear afforded by the internet direct companies. Matching preferences to sonic signatures based on what owners have to say often results in a purchase that is very satisfying. There are lots of examples posted that say that people enjoy their internet direct speakers more as time passes. From what I have read as age sets in more people tend to prefer a more "laid back" speaker that would certainly lose a contest for "sizzle." I'm still saying WOW after all this time with my speakers. YMMV

How are you enjoying the HT? I still say you should investigate the Perpetual Technologies gear for your two channel. Maybe even give the Reference 1's a try for the cost of shipping. WOW if YOU liked them.

[Woochifer]

Since we are talking about internet direct speaker purchasing, why hasn't anybody brought up Hsu and SVS subs? While some may want to call it cultish and insane for not auditioning a set of speakers before you buy them, you have to realize that not everybody has great B&M stores that actually treat you like a customer instead of just schmo of the street. If some people weren't so cultish about these speakers, would we have even heard of SVS or HSU? On another note, I feel like people who use speakers for home theater are being somewhat denegrated in this thread. Oh, we only use a receiver to listen the speakers. No offense, but as everyone has said "its all in how you perceive the sound coming from your speakers" . Your $3000 solid state tube amp may sound like utter crap to me. Its all about personal preference. Sometimes I prefer the sound of a good vinyl record to a digital CD. In closing, sometimes you have to take a risk to get the reward.

I'll agree with you. I'm not denigrating internet direct speakers with my posts, after all I bought my subwoofer online. But, I think that what a lot of the cultish postings fail to acknowledge is that buying online IS a riskier proposition than going through a B&M store. The potential reward is a great product for a low price, and the risk is having to buy a product and assume some irrecoverable costs (i.e. shipping and credit card interest) just to try the product out.

My own personal decision to go with an internet direct subwoofer stemmed from the lack of retail options that met my criteria. I could only afford about $500, and I wanted a sealed box subwoofer that could go well below 35 Hz. At that time, the lowest priced retail option I could find cost $800, so I e-mailed Adire Audio and their response was very satisfactory. I ordered the Rava without having heard it before, and based on recommendations from people on this board whose advice had helped me out in the past. I knew up front that if I did not like the subwoofer and decided to return it, I was out $80. And if not for my decision to simultaneously buy a parametric equalizer and spend a lot of time calibrating the subwoofer to my room acoustics, the boomy sound of that subwoofer out of the box would have forced me to return the unit. As it stands, I'm happy with my purchase.

But, at the same time, I'm not about to say that the Adire Rava "blows away" all other retail options, or that it's by far the better deal than anything sold in stores, because frankly, I don't have enough information to make such a claim. And I would strongly question anybody else who makes such a claim with subwoofer comparisons. In order to properly compare the Rava with the SVS, Hsu, and retail units, I would have to buy the SVS and Hsu units, and borrow the retail units. PLUS, I would have to individually calibrate each unit to the room acoustics. Either way, just to listen to the comparable SVS and Hsu units would cost me probably around $150 in shipping charges.

[Jon Lane]

None of us wish to debate a fairly simple concept so I'll try (and fail) to keep my comments brief. And huge thanks to all of you for the forum - we enjoy your company and hope you won't mind the diversion from the regularly scheduled programming.

Woochifer, we don't shift the costs of high margins and disposing of used product because we don’t include such margins (no dealers means no dealer margins) and because we don’t deal in demo units, returns, and used product. As I’ve said, our returns rate is nearly nil.

Contesting why it’s nil by conjuring unsatisfied customers unwilling to incur the cost of shipping goods back to us is incorrect. We simply don't get asked to return product. Folks are enthusiastic and further, they fulfill the key component of a successful business: They feel they’ve gotten more than we promised. Pulling a Swan (or many other direct-channel brands’ speakers) from the box and firing it up is simply not a letdown; many more times than not it simply knocks people out, and our record backs that claim up absolutely.

So…no dealers margin, no expensive rotating demo programs, no customer returns of any consequence, and no buyer’s remorse (that anyone cares to share with us, anyway ). Could we conclude that the business model wasn’t hugely successful?

As far as open-door free freight policies, obviously shipping 70lb speakers from the West Coast to say, NYC, and back again costs money. But factoring out the now-non-existent dealer margin and the return freight and high overhead and local sales tax nets very hefty savings. And nobody complains our stuff is awful and pleads to return it on our nickel. Ever. Rather, its the reverse, as I’ve said. I just fail to see the liability to the customer…

Even in this senario free two-way shipping is absolutely a problem waiting to happen because invariably a certain percentage of abusers would use us as a lending library and raise YOUR cost. It’s that simple. Meanwhile – and this is the point I seem to have trouble making – legitimate buyers simply don’t return product. They love it and keep it. Would it be fair to raise prices to them say, 15% to cover the known problem of abusers? We don’t think that’s a wise risk or a proper financial burden to put on our customers.

I don’t claim B&M dealer demo programs are a means for abuse, I mean they inevitably cost something. As with that new car, when somebody drives it off the lot it incurs a loss and the dealer has to include that loss in his adjusted operating expenses: He raises prices elsewhere. We don’t have that problem and we can keep prices even lower as a result.

Wear is a huge cost for B&M’s because, to use your new car, once it’s out-of-box and used, it’s got to be discounted by some 15% or more to sell. 15% off say, 20% of the dealer’s normal inventory is a margin erosion that's added back into the bottom line and gets passed on. No way around it…unless you don’t sell demos.

Sure, we would love to offer comparative demos with scores of other brands. But wouldn’t we then have to set up a B&M and raise prices?

Of course our system has margins. But it’s our costs that can be half the alternative. And obviously we pass those savings on to you, the customer.

Lastly -- and I think this is your key concern -- we can't endulge a need to audition a dozen speakers in order to fulfill a special need. While we know that speaker science has advanced a long way since even 5 years ago, and that we can document our performance, point to reviews and to tens of thousands of posts online, we still can't have you listen easily and as conveniently as your local store, price aside for the moment. We like to think that the science has advanced so far that the wild variances in speaker sound of a decade or more ago have been engineered out and are largely minimized. Clearly speakers still have larger arguable differences in performance than amplifiers or transports, but the risk has been reduced to the point that the experiences I relate above are commonplace. And of course, even when you make a $1299/pr 70-pounder as well as we think we do, you're still not competing for the component-of-the-month slot in the $20,000 class. It's a value equation, not an all-out horse race with only one winner. Up there you'll have us at something of a disadvantage.

We appreciate the opportunity to fully explain our methods and reasoning. And we always look forward to instructive criticism and new opportunities to add value to our process.

Jon Lane
The Audio Insider.com

[TinHere]

Wooch,

Someone has to pay for shipping. It could be built into the price charged as a fixed expense [free shipping], or the buyer can pay. If "free shipping" was offered, people would be setting up a system for their party, returning them, and the rest of us would be paying. In a world where nobody would take advantage of "free shipping" and everyone who placed an order was a serious buyer [maybe the case now] based on reported return rates it could work. The problem is it would be an invitation to people with no intention of keeping them to have them sent to their home. Probably an addicted group of persons who just "need a new listen" fix and dang, these guys deliver. It wouldn't require evil intent to want to give these products a listen at in your home at no cost. Hmmmm....sounds like a cheap hobby... and that's why it sounds like it wouldn't work for the audio industry. Gotta pay to play a home game.

[Woochifer]

None of us wish to debate a fairly simple concept so I'll try (and fail) to keep my comments brief. And huge thanks to all of you for the forum - we enjoy your company and hope you won't mind the diversion from the regularly scheduled programming.

Woochifer, we don't shift the costs of high margins and disposing of used product because we don’t include such margins (no dealers means no dealer margins) and because we don’t deal in demo units, returns, and used product. As I’ve said, our returns rate is nearly nil.

Contesting why it’s nil by conjuring unsatisfied customers unwilling to incur the cost of shipping goods back to us is incorrect. We simply don't get asked to return product. Folks are enthusiastic and further, they fulfill the key component of a successful business: They feel they’ve gotten more than we promised. Pulling a Swan (or many other direct-channel brands’ speakers) from the box and firing it up is simply not a letdown; many more times than not it simply knocks people out, and our record backs that claim up absolutely.

Like I said, if the dissatisfaction with the product is so minimal, then how would a two-way shipping offer then add to the costs, if you hardly ever encounter dissatisfied customers and your products are as great for everyone as claimed? The absence of such IS a barrier to return a product that does not exist for B&M store customers.

As far as open-door free freight policies, obviously shipping 70lb speakers from the West Coast to say, NYC, and back again costs money. But factoring out the now-non-existent dealer margin and the return freight and high overhead and local sales tax nets very hefty savings. And nobody complains our stuff is awful and pleads to return it on our nickel. Ever. Rather, its the reverse, as I’ve said. I just fail to see the liability to the customer…

Even in this senario free two-way shipping is absolutely a problem waiting to happen because invariably a certain percentage of abusers would use us as a lending library and raise YOUR cost. It’s that simple. Meanwhile – and this is the point I seem to have trouble making – legitimate buyers simply don’t return product. They love it and keep it. Would it be fair to raise prices to them say, 15% to cover the known problem of abusers? We don’t think that’s a wise risk or a proper financial burden to put on our customers.

I don’t claim B&M dealer demo programs are a means for abuse, I mean they inevitably cost something. As with that new car, when somebody drives it off the lot it incurs a loss and the dealer has to include that loss in his adjusted operating expenses: He raises prices elsewhere. We don’t have that problem and we can keep prices even lower as a result.

The scenario that you outline is wonderful for you because you've protected yourself against losses, but at the expense of shifting upfront costs to prospective customers. It's great for people who buy speakers without listening first, and people who are willing to believe the reviews and other hype about speakers that they have to buy first. But, for someone who's just doing comparison shopping, and wanting to try things out before putting out an up front investment, where's the benefit to them?

This ability to comparison shop before purchasing is part of the value that goes into a product. Customer service, aftersales support, warranty fulfillment, etc. are all components of value outside of the commodity itself when you're talking about retail purchases. Offering any of those things adds cost to the commodity, but for someone who values that ability to listen to something before buying, then it's a built-in cost that they willingly assume because the minimizing uncertainty is part of the value equation.

Sure, we would love to offer comparative demos with scores of other brands. But wouldn’t we then have to set up a B&M and raise prices?

No, just make it so that the customer does not have to pay upwards of $80 just to listen to a speaker that they are interested in.

Of course our system has margins. But it’s our costs that can be half the alternative. And obviously we pass those savings on to you, the customer.

But, what if I'm a PROSPECTIVE customer who wants to see how your product compares to other options? Those savings mean squat to me if an audition will cost me money versus retail options that don't cost me anything up front.

Lastly -- and I think this is your key concern -- we can't endulge a need to audition a dozen speakers in order to fulfill a special need. While we know that speaker science has advanced a long way since even 5 years ago, and that we can document our performance, point to reviews and to tens of thousands of posts online, we still can't have you listen easily and as conveniently as your local store, price aside for the moment. We like to think that the science has advanced so far that the wild variances in speaker sound of a decade or more ago have been engineered out and are largely minimized. Clearly speakers still have larger arguable differences in performance than amplifiers or transports, but the risk has been reduced to the point that the experiences I relate above are commonplace. And of course, even when you make a $1299/pr 70-pounder as well as we think we do, you're still not competing for the component-of-the-month slot in the $20,000 class. It's a value equation, not an all-out horse race with only one winner. Up there you'll have us at something of a disadvantage.

Sorry, but speakers are still far from perfect and the differences are very audible. Aside from room acoustics, speakers are by far the most variable part of any audio system, and definitely the most subjective. Speakers that a lot of people praise, I have found less than satisfactory, while ones that I have raved about, others think are crap. There's no such thing as a one-size-fits all solution, or a speaker that's anywhere near perfect for everybody.

I know you have a business plan to advocate, but are you really advising that people buy speakers ONLY on the basis of measurements and reviews? And that it's best to buy BEFORE trying? While I will agree with you that the differences have narrowed a lot in the past decade, there's still plenty of variability in the mix. When I shopped for speakers a couple of years ago, I auditioned at least 35 different models, and the ones that consistently fared the best through repeated listenings I borrowed from the dealers and compared to one another at home. If I had just auditioned three sets of speakers from internet vendors, I would have potentially had to lay out $200 just for the comparison, not to mention whatever interest charges accumulated.

I appreciate you standing up for the way of conducting business that you believe in, but for me there is an element of risk and uncertainty for the customer that needs to be acknowledged.

[Woochifer]

Wooch,

Someone has to pay for shipping. It could be built into the price charged as a fixed expense [free shipping], or the buyer can pay. If "free shipping" was offered, people would be setting up a system for their party, returning them, and the rest of us would be paying. In a world where nobody would take advantage of "free shipping" and everyone who placed an order was a serious buyer [maybe the case now] based on reported return rates it could work. The problem is it would be an invitation to people with no intention of keeping them to have them sent to their home. Probably an addicted group of persons who just "need a new listen" fix and dang, these guys deliver. It wouldn't require evil intent to want to give these products a listen at in your home at no cost. Hmmmm....sounds like a cheap hobby... and that's why it sounds like it wouldn't work for the audio industry. Gotta pay to play a home game.

There are a lot of things offered by retailers that are built into the cost of the products that they sell, but guess what, all of those extras represent VALUE to their customers. The certainty of being able to listen to something before I invest a single penny is part of the value equation in my thinking. A free shipping offer would be built into the cost of the speaker, but they also add value to the product because they introduce an element of certainty and reduced risk to prospective customers. It's the same reason why some people would rather pick a product with a 2-year warranty rather than a 90-day warrranty, even if the 2-year warranted product costs more.

If free shipping was included, I very well might have put the internet-direct brands on my audition list when I was trying out speakers a couple of years ago. But, the options that I had were already more than agreeable enough for my ears and my budget. So, I didn't see the need to shell out upwards of $80 just to listen to some speakers that someone tells me is good. Well, there were several speakers that people told me were the best in their class yet I thought were subpar or mediocre. Pay to play? None of the dealers that I borrowed speakers from kept any of my money just to get a listen to them at home.

[Jon Lane]

We're going over old ground so rephrasing again probably won't make a difference. So, let's conclude...

-"Value"-added B&M brands cost about twice as much, for which you get local demos and local stores with overhead. For many, that's a price worth paying.

-Alternately, internet direct brands succeed not because buyers are disappointed but don't return their purchase, but because they deliver more than they promise.

-Free freight raises product costs and has to come from higher margins.

Thanks for the bandwidth and good luck to all!

Jon Lane
The Audio Insider.com

[Woochifer]

-"Value"-added B&M brands cost about twice as much, for which you get local demos and local stores with overhead. For many, that's a price worth paying.

That would be true if you were offering exactly the same product as the B&M stores, but the Swans are not sold in stores, so there is no consistent basis for saying that B&M brands cost twice as much. Even among B&M brands, there are some speakers that cost twice as much as other models that I think are inferior, so that argument is subjective.

-Alternately, internet direct brands succeed not because buyers are disappointed but don't return their purchase, but because they deliver more than they promise.

Judging by my own experience, I would say that's true to a point. But, I don't know about delivering more than they promise, since I was told that the in-room response would extend down to about 25 Hz, and that's exactly what I measured when I tested it. It's an excellent subwoofer for the price, but I had several reasons for going the internet-direct route that made the risk palatable.

-Free freight raises product costs and has to come from higher margins.

But, it also raises value for customers who like to try before they buy. And if the customers are satisfied and don't exercise the return privilege, then the costs don't rise at all.