profitability of audio equipment used in video

[Philip Fass]

A sales guy from a music equipment catalog called me. I once bought a pair of studio speakers for my video work from them. He was hoping to sell me something more, and I told him I'd been thinking about a new mic.

He said that he couldn't offer a discount because there's almost no profit in audio equipment for video. Is that really true, or should I shop around anyway?

[Richard Crowley]

So does this guy just call people for fun? Who pays him? How does he earn his salary/wages/commission? Perhaps he thinks there is no "profit" in production equipment because his cut is so large. I can't remember EVER buying something from somebody who called me that I didn't regret later. Just say no and shop around. Do you own research. Ask questions in forums like this.

[Philip Fass]

He works for a large, legit dealer of equipment for live and recorded music. They're very well established and reliable. Only a small percentage of what they stock is applicable to someone in video -- speakers, mics, stands, etc. What I think he was claiming is that they have more room to discount guitars, keyboards, etc. than equipment used for video, like the shotgun I was asking about.

[Richard Crowley]

The large sound retailer known for out-calling is NOT that highly regarded by everyone. They are known for their high prices, perhaps because they have to pay those people making cold sales calls. No, thank you. I would rather buy from someone known for actual technical knowledge of their products vs. mass tele-marketing.

I make it a point to NOT do business with people who call me. I simply do not respect that business model. If they can't make it on their own reputation and good value, then why should I do business with them? The very fact that THEY are calling ME indicates that they prefer mass sales over actual customer service (including even knowing anything about what they are selling) I would rather do business with someone who doesn't have extra people sitting around with nothing better to do than making cold sales calls.

If you want to talk to people who know what they are talking about, contact people like the sponsors of this online forum Sponsors at DVInfo.net and industry sound professionals like Trew, Coffey, et.al.

[Bill Davis]

Not that it's important... but I think Trew and Coffy have recently merged.

Consolidation appears to still be the best hope for small excellent service oriented firms in a stagnant economy.

FWIW

[Chris Luker]

I used to work at a music store. We would, as a rule, at least double our purchase cost on everything we sold.
This was guitars, basses, amps etc...
Then we could give someone 10% off if they were close to buying but hesitant.
Of course that establishment is no longer in business as Guitar Center moved in to town.

[Daniel Browning]

Originally Posted by Philip Fass

He said that he couldn't offer a discount because there's almost no profit in audio equipment for video. Is that really true, or should I shop around anyway?

Maybe. Maybe not.

Is it hard to find at other locations? Is it too large or heavy for easy online shopping? That's going to push the margins up.

Is it something that most people comparison shop on? If so, that pushes margins down. Small margins on those types of products can get the customer in the door (or website) so that they can push them toward the high margin products.

For example, margins on consumer and prosumer camcorders tend to be very small, because many buyers will spend days and days finding the store that has the lowest price on the camera. But they don't do that for the accessories like wires, batteries, adapters, protective filters, etc.; they just buy the cheap stuff wherever they bought the camcorder. So stores can structure their prices to make almost nothing off some products, and then make up all the profit on everything else.

The same thing occurs in many other industries as well. There's very little profit in that $4 cheeseburger, but the $2 fries and $2 drink are ten times more profitable. The "would you like fries with that?" is to push high-margin products.

There is very little margin in theater ticket sales, but popcorn and other concessions have absurd profit margins.

[Tom Morrow]

I have a buddy who gets discounts from Sennheiser on headphones but not video microphones. In his case it's just because the industy he's in involves headphones not video mikes, so Sennheiser only gives him discounts in that area.

Point being that every retailer gets different terms on discounts.

If you asked a consumer DVD salesman he would unquestionably state that video Mics have higher margins than he can offer.