Hello Srajan, I've been enjoying 6moons for over 10 years and wanted to thank you for what you do. I read with interest the debate around Boenicke deciding to sell their P1 amplifier direct to consumers after having set up a wide network of dealers around the world. I have been working as a guitar dealer for many years and disagree with Mr. Wata's thinking wholeheartedly. When a young brand as Mr. Boenicke's decides to work with specialist dealers, it does so with the awareness that this is a long-term partnership on both sides. Mr. Boenicke delivers innovative and reliable products, respects delivery times and maintenance agreements. The dealer introduces Boenicke's products to his clients, investing valuable time and resources in building brand awareness, organizing listening sessions and home trials, recommending the right ancillaries etc. It's not unlikely that to sell 60 pairs of speakers, the dealer has had to set up more than 300 trials (!), notwithstanding that he/she had to invest in a shop (capex and rent), salaries and working capital (demo models, stock). Net, these are true partnerships and as such loyalty is the name of the game on both sides. This loyalty is breached when a brand which has leveraged its dealers for years decides to sell a highly complementary product directly to the same client base the dealer introduced in the first place and actively marketed the brand to. Great brands such a Fender, Gibson and Guild never did so and continue to enjoy strong success. Hopefully this kind of positive behavior should also contribute to strengthen the hifi industry as a whole, something I sense is really needed for its own survival. Keen to hear your thoughts on this, Srajan. Regards, Jacob Daltz
Having worked in a hifi dealership for a few years, later for more years on the manufacturing side of sales & marketing in charge of building/supporting dealer networks, I have real sympathy for both sides. Most importantly, Sven should have contacted his business partners a priori, explained his vision and planned strategy for this particular product to see whether he could win support on an 'exemption' basis; a bit like what otherwise would be considered a loss leader. Apparently he did not. Lack of proper communication caught at least these particular brand ambassadors by surprise to present them with a fait accompli. That was ill judged. It will be interesting to see whether the P1 can continue with its current position outside the general catalogue; will increase some in price to include a shorter dealer margin; increase a lot in price to build in full traditional dealer/distributor margins; or go away entirely. Either way, it seems clear that at the very least belated communications are in order; and very likely certain adjustments on top of those. Srajan
Hello again, there seem to be some confusion on dealer's margin here. Mr. Boenicke's P1 is sold direct at 2650 chf net of VAT. This would translate into a ~5300-6000chf consumer price including VAT based on a European standard dealer margin (source: friends who work in the sector). This appears to be a competitive price, ~25% less than the previously mentioned Bakoon AMP13R. I see 3 pitfalls in Mr Boenicke's actions:
– lack of timely and thoughtful communication as you mentioned
– caring mostly about his own growth and profits (his margins are not affected by going direct whilst his dealers loose out entirely)
– a potential misunderstanding of whose customer we are talking about.
If you were to do a poll of customers entering a hifi store, I'd bet less that 5% have ever heard of Boenicke and less that 1% have ever listened to one of his speakers. The reasons why the specific dealer sold 60 pairs is because he or she decided to prioritize Boenicke's speakers in demos and invest a lot of time and resources convincing their customers about their many qualities. Get me right, Boenicke speakers are of very good quality and design but the same can be said about Soundkaos, sonus Faber, Kef, Kaiser, Camerton…. Once a retailer has decided to build your brand and prioritizes it against other equally valid options, you owe it to the retailer to play by the rules and go thru them for selling your full range of hifi products. Alternatively you may market them through a different brand (what Goldmund once did with Job) or you change your model into direct-only (what Vinshine Audio does with the Denafrips and Kinki Studio brands). But as the old saying goes, you can't have your cake and eat it too. Jacob Daltz
No confusion there, Jacob. Sven himself arrived at the CHF 7'500 retail whilst applying the same dealer + distributor margins his speakers currently have. And he would know what those are, wouldn't he? He works with distributors who then set up dealers in their country/s. So that's two layers of margin, not just one. As far as greed goes, with €1'400 worth of tweaks in the P1 alone, I rather doubt that Sven's profit on this piece is very much at all. It will certainly be far lower than a dealer's would be. But then, those matters are not really my business. I'm a reviewer, not retailer so don't think I can add anything more meaningful to this discussion. Srajan
