# The Danger of Internet eTailers



## a-minus (May 7, 2013)

I've noticed a trend - a trend that I'm sure all 12V retailers are aware of - that consumers don't seem to see as dangerous. Now, before I get into this, I want to admit fully to being an internet consumer; I buy most everything but clothes and groceries on the internet. As an employee of a small business, I've started to see the effects of buying goods from the internet. There's nothing new about it. It's the same discussion about mom&pop vs walmart. The hard part of the argument is that eTailers are more reliable than the industry would have you believe, and the consumer knows that. We've gotten smart enough to order from websites that honor warranties when the manufacturer won't, and still buy the product at 50%-75% of retail. With deals like this, why would anyone buy local? Especially when many small box retailers can't afford to keep a large stock. If you're going to have to wait on shipping anyway, why not order it yourself? This is a huge problem for the retailers, and if the problem keeps growing, it's going to be a big problem for consumers too. When the retailer is doing more installs of online purchased goods, they make less money than if they are selling product and labor, and they have less time to do installs for consumers that do buy product local. Now, shops are raising their labor rates for "outside" merchandise. One shop in my area charges twice their normal rate to install merchandise purchased elsewhere. To make things worse, when a consumer comes into a shop, the salesman sells the product and convinces the consumer, who then goes and buys it from the internet. If the retailer wants to make the sale, they end up losing profit by trying to compete with eTailer prices. There's just not enough profit to keep the electricity on and pay the rent and make payroll and have anything left to take home for yourself. I've seen people here and on other forums, and I've heard people in person, saying that retailers are trying to rip consumers off by charging retail pricing...fact of the matter is, because of eTailers, the days of MSRP vs MAP vs UMAP are disappearing. To keep the doors open, everything that crosses the counter has to yield 50%+ profit.

The internet age is going to change the face of the 12V storefront, and while this might not be a problem for DIYers like us, what does this mean for the average consumer? What do you guys think about this issue?


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## pocket5s (Jan 6, 2012)

This topic has been discussed at length a few times on here. If you have a cost conscience consumer base then you have to find a way to stay in business. One is to charge more for labor as you mentioned. I would imagine having a policy of charging double doesn't last long. I can't see too many consumers buying in to that.

However, many people go the DIY route because they can't afford the labor in the first place so a shop may be shooting themselves in there. Another reason is a lot of people get burned by hacked up installs and won't have someone touch their car anymore. There are other reasons, but those two in particular will destroy a shop and hurts the b&m crowd as a whole.

On the other hand, there are many shops that do outstanding work and I'm sure they charge appropriately for it. There are many who will pay for quality work. In between are those shops that aren't hacks but also don't or can't do high end fab. They probably have it the hardest. 

Either way, you can complain about the Internet retailers all you want and slowly fade away or you can find a way to compete and live with it. Or perhaps you are in a location where there is not a large enough client base to support you anymore.


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## HiloDB1 (Feb 25, 2011)

Guess its a little different for us because of the location I'm in. Most online retailers do not offer free shipping to Hawaii. This is the biggest advantage we have. Even if online sales site advertise and sell for less the cost to ship to Hawaii more than offsets the price difference of buying local. Most of the audio shops in my area sell at competitive pricing as is so not a whole lot of problems there. Only thing I notice a lot of people go to online are for brands that no one in my area offers.


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## pocket5s (Jan 6, 2012)

Something else that just occured to me was those that want a mix of brands that one shop doesn't carry, or any shop like Hilo DB1 mentioned.


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## a-minus (May 7, 2013)

Sorry, I didn't mean to sound like I was complaining about eTailers. It's part of the world we live in now, and complaining won't make it disappear. It was more of just wondering if consumers understand the danger that internet sales pose to b&m shops. I think there's a common belief among consumers that we mark up product at a ridiculous rate. There was a time when retailers could sell product for twice or more than what they paid for it, but these days, that just isn't possible. Especially not on the brands that everyone wants. Over the past couple of years, I've seen manufacturers raise the dealer price while msrp stays at the same price as the previous years. I just hate that people think that I'm trying to rip them off. I'm a salesman - and I'm pretty good at what I do - but I don't get paid a sales commission, and I legitimately want each of my customers to buy the product that's going to give them the sound they want. I don't sell things to people that they don't need, and I do not sell product that I don't believe in. (if you want boss or dual or tview, don't come to my shop. I don't stock it, and I won't order it.) Most importantly though, I'm not marking up product beyond what it takes to make a profit. I guess if I were complaining about something, I would complain about being accused of ripping people off because I charge retail instead of what the internet charges. You don't complain about a restaurant charging more for a meal than what you could make it for do you? (I worked food service in high school, and you wanna talk about high profit margin, typical markup was 800%-1200%)

There are definitely legitimate reasons to shop online, and I am understanding of that.

HiloDB1, does the shipping cost not affect you as a dealer as well? Seems like it would cost more to get the product to the islands, and that cost would have to be transferred down the line from distributor to you to the consumer.


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## HiloDB1 (Feb 25, 2011)

a-minus said:


> HiloDB1, does the shipping cost not affect you as a dealer as well? Seems like it would cost more to get the product to the islands, and that cost would have to be transferred down the line from distributor to you to the consumer.


Shipping does affect my bottom line. But I try not to let that affect pricing. We sell at MAP like most shops to stay competitive.


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## AAAAAAA (Oct 5, 2007)

a-minus said:


> ...
> 
> *The internet age is going to change the face of the 12V storefront*, and while this might not be a problem for DIYers like us, what does this mean for the average consumer? What do you guys think about this issue?


That post would have made sense 10 years ago. The store front has already been changed, the internet age has been here for a long time now and shops have been feeling the pain for many years.... at least the ones still open.


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## Bayboy (Dec 29, 2010)

There's maybe one or two B&M shops that I would deal with in town, but I'll be damn if I'm gonna pay $30 for fuse when I can get it even at an auto parts store or wallyworld for far far less. Not all shops are this way, but not all shops are trying to compensate in an honest way.

The thing with DIY, we don't buy much mainstream items (no local B&M here sells raw drivers) as the average consumer so to me it's irrelevant. For some of the products on here most use, it's simply either not in stock or there's not a local dealer within a reasonable distance of where I live (Panama City). I'm not traveling 100 miles to pay the higher price they're more than likely going to ask. Common brand items, yes, but again how many here are buying common brand items. I prefer Dayton, Peerless, Vifa, etc... what can a B&M do for me on that? My last collection of amps were simple US Acoustics... who sold them locally? 

I get the gist of what the point is, but honestly I don't think it's that much of a concern for this niche. For your everyday Pioneer, Sony, Alpine, JL, consumer then yeah, but a lot of that has a high resale factor as used so that's another whammy for B&M to deal with.


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## cjazzy4 (Mar 29, 2012)

a-minus said:


> I've noticed a trend - a trend that I'm sure all 12V retailers are aware of - that consumers don't seem to see as dangerous. Now, before I get into this, I want to admit fully to being an internet consumer; I buy most everything but clothes and groceries on the internet. As an employee of a small business, I've started to see the effects of buying goods from the internet. There's nothing new about it. It's the same discussion about mom&pop vs walmart. The hard part of the argument is that eTailers are more reliable than the industry would have you believe, and the consumer knows that. We've gotten smart enough to order from websites that honor warranties when the manufacturer won't, and still buy the product at 50%-75% of retail. With deals like this, why would anyone buy local? Especially when many small box retailers can't afford to keep a large stock. If you're going to have to wait on shipping anyway, why not order it yourself? This is a huge problem for the retailers, and if the problem keeps growing, it's going to be a big problem for consumers too. When the retailer is doing more installs of online purchased goods, they make less money than if they are selling product and labor, and they have less time to do installs for consumers that do buy product local. Now, shops are raising their labor rates for "outside" merchandise. One shop in my area charges twice their normal rate to install merchandise purchased elsewhere. To make things worse, when a consumer comes into a shop, the salesman sells the product and convinces the consumer, who then goes and buys it from the internet. If the retailer wants to make the sale, they end up losing profit by trying to compete with eTailer prices. There's just not enough profit to keep the electricity on and pay the rent and make payroll and have anything left to take home for yourself. I've seen people here and on other forums, and I've heard people in person, saying that retailers are trying to rip consumers off by charging retail pricing...fact of the matter is, because of eTailers, the days of MSRP vs MAP vs UMAP are disappearing. To keep the doors open, everything that crosses the counter has to yield 50%+ profit.
> 
> The internet age is going to change the face of the 12V storefront, and while this might not be a problem for DIYers like us, what does this mean for the average consumer? What do you guys think about this issue?


I think that consumers are becoming more price shopping savvy then ever when it comes to "big ticket" items. This may force shops to change there way of servicing customers who do shop online for merchandise and are looking for installation.....From a consumer perspective I think its an opportunity for that shop to at least offer a "install only" service......as a consumer I don't expect for the " install only service" to be less then if I had purchased directly from the shop. Most shops should have the tools to test equipment before the install to protect themselves before installing.( Another chance to make money.)
We all know ideally buying from a shop and having gear installed is all around protection.(In most cases)......However from a shop point of view it does cut into your bottom line and cause you to have to increase cost......Whats the solution....Provide the service....Give upfront pricing... and explain to your customers (in writing) what the "install only service" will give them.....Offer other system components .....Treat that customer like you want them to come back to you for other items in the future. And please shop owners....Don't rip these customers off by purposely damaging their equipment/car because they want "install only".....A bad report from a customer can damage your reputation in the area you are in.


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## markklb (Apr 3, 2013)

The demise of the local "car audio shop" is close at hand, however the rise of the technological savvy infotainment vehicle specialist is on the horizon. Sure the love of chasing the perfect in car audio is what drove most into this business, but things change and so holding on trying to "re-capture" or "re-ignite" the magic that once was is just plain foolish. The whole landscape of consumer electronics along with car audio has completely flipped and really is up for grabs and as the cards are being reshuffled and re-dealt those bright enough and brave enough to venture out of their comfort zone and who have kept abreast with the lightning fast transition from DC to CANBUS protocols integrated into vehicles will certainly recognize the opportunities and capture them. Those who resist and try to hold back the inevitable will be tossed aside. 
Yes the internet has caused loss of market shares, yes the vehicles have become increasingly more complex and less amenable to aftermarket products and services. But knowing what and how these systems operate and function is key. Just a basic understanding is no longer acceptable and in fact could be considered a liability. These systems don't allow "experimentation" these systems won't allow guessing and tinkering. Thru diligence and study will come understanding and when understood will than open up the door to where and how interfacing and upgrading will and can happen.


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## cjazzy4 (Mar 29, 2012)

markklb said:


> The demise of the local "car audio shop" is close at hand, however the rise of the technological savvy infotainment vehicle specialist is on the horizon. Sure the love of chasing the perfect in car audio is what drove most into this business, but things change and so holding on trying to "re-capture" or "re-ignite" the magic that once was is just plain foolish. The whole landscape of consumer electronics along with car audio has completely flipped and really is up for grabs and as the cards are being reshuffled and re-dealt those bright enough and brave enough to venture out of their comfort zone and who have kept abreast with the lightning fast transition from DC to CANBUS protocols integrated into vehicles will certainly recognize the opportunities and capture them. Those who resist and try to hold back the inevitable will be tossed aside.
> Yes the internet has caused loss of market shares, yes the vehicles have become increasingly more complex and less amenable to aftermarket products and services. But knowing what and how these systems operate and function is key. Just a basic understanding is no longer acceptable and in fact could be considered a liability. These systems don't allow "experimentation" these systems won't allow guessing and tinkering. Thru diligence and study will come understanding and when understood will than open up the door to where and how interfacing and upgrading will and can happen.


very well said indeed.... I didn't think about that important fact/trend in car audio in my previous answer....the market is changing as far as what auto makers are now willing to offer in their cars (as far as car audio) the infotainment center is quickly becoming gear that exceed aftermarket products......the reasoning I guess if auto makers start improving the audio system in there cars..then they can charge more for the car (cutting out the need to update with after market gear)......Right now...... newer cars ( 2011-present) have much better systems in them then say (well mine) '97 Mercury GM.....This is why I'm updating HU, speakers,w ire,amp, sub......As people purchase newer car this need to update gets less.


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## HiloDB1 (Feb 25, 2011)

Im going to go out on a limb here and say 90% of the car audio community are not that savvy when it comes to electronics. The DIY community is only a fraction of the 10% that remains. Sorry to say but even though the internet exists and you can find an answer for almost anything with "Google" I still see so many threads with titles like "How do I wire my dual 4 ohm subwoofer for 2 ohms?"


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## cjazzy4 (Mar 29, 2012)

HiloDB1
I have changed a radio/speakers out before.... just havn't replaced the whole system......Once I learn by watching the installer on my build the next time around when I get another car or even this one if I change equiment....I would do it myself.....I may can do it on this time around but (to be safe)....opted for a pro


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## HiloDB1 (Feb 25, 2011)

cjazzy4 said:


> HiloDB1
> I have changed a radio/speakers out before.... just havn't replaced the whole system......Once I learn by watching the installer on my build the next time around when I get another car or even this one if I change equiment....I would do it myself.....I may can do it on this time around but (to be safe)....opted for a pro


My statement was in no way directed at you or anyone else. I was merely generalizing the car audio community. Although it may be grossly exaggerated.


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## a-minus (May 7, 2013)

HiloDB1 said:


> Im going to go out on a limb here and say 90% of the car audio community are not that savvy when it comes to electronics. The DIY community is only a fraction of the 10% that remains. Sorry to say but even though the internet exists and you can find an answer for almost anything with "Google" I still see so many threads with titles like "How do I wire my dual 4 ohm subwoofer for 2 ohms?"


x2

This is exactly what I'm talking about. And while the internet has been around a long time, we're really just getting to the point where every customer that walks through the door (from 16 years old to 70 years old) knows that there are better deals to be had on the internet. 5 years ago, it seemed like no one over 35 trusted internet retailers. When I said the 12V industry is changing, I meant that it isn't out of the realm of possibilities that we'll see stores that only do installs and don't sell any product. Again, this isn't a major problem for DIYers, but like HiloDB1 said, that only accounts for about 10% of consumers.


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## rton20s (Feb 14, 2011)

And the flip side of the local B&M coin...

http://www.diymobileaudio.com/forum/car-audio-truth-myths-industry-dogma/147736-buy-local-%3D-buy-authorized.html

At least what I am seeing locally. There are some awesome shops out there, many of which are worth paying a higher price to get your product from or traveling to, to have work done.


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## cjazzy4 (Mar 29, 2012)

HiloDB1 said:


> My statement was in no way directed at you or anyone else. I was merely generalizing the car audio community. Although it may be grossly exaggerated.



NO harm done at all......I did not take it as directed at me......And I think you are right most people may not have a clue about electronics and how to connect them...I'm thankful for car audio forums and online instruction aids to help with learning how electrons connect.


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