Are pro audio dealers becoming obsolete?

Dot · Post by **Dot** » Mon Mar 02, 2015 3:55 am

I'm looking at trends in the near future, and I see changes brewing in the pro audio industry. I see some big shifts coming.

Let's look at a few points:

1. Most pro audio gear is bought online. And to some degree, this has always been the case. Even in the golden era of audio, back in the 60' and 70's, most gear was ordered from distant locations.

2. PAD's used to also be in the business of in-house repairs. And PAD's would take trade-ins.

3. PAD's used to commonly have experts and in-house engineers on staff, who had a technical and applications knowledge of the gear they carried.

4. PAD's in the past had a much more limited number of products. Which also meant their product knowledge was more extensive.

5. PAD's in the past dealt almost exclusively with pro audio engineers and studio owners who often already had extensive knowledge of gear.

6. PAD's today are selling, more often than not, to a more general market of hugely varying degrees of experience.

7. Many PAD's today simply don't know what they're talking about. They're often not experienced engineers. They don't use equipment in real sessions. They have no pro engineering background. They're sales oriented people, and will often talk a good game, and even believe their own bullshit.

8. PAD's will often sell for margin instead of customer's needs. And I'll add to this that since many salespeople at PAD's are not truly experienced with the gear they sell, they often have no real way to gauge what the customer's real needs are.

9. PAD's introduce what could be seen as an unnecessary mark up in the pricing of gear.

10. PAD's often do not exist in the best interests of the end-user. Many PAD's exist only as glorified box stores.

==========================================

I want to get into manufacturers, and also distributors. And I also want to get into the world of the end user, which has changed quite a bit over the years.

I can see a shift coming where dealers and distributors are for the most part eliminated from pro audio. And manufacturers take over the role of sales and service.

My list here is by no means exhaustive. But I wanted to throw some things out, and I'm interested in thoughts and ideas.

A.David.MacKinnon · Post by **A.David.MacKinnon** » Mon Mar 02, 2015 6:30 am

Yes and no. One important thing missing from your list is that bricks & mortar dealers give the consumer a place to see and hear the available tools before buying. Some manufacturers will let you audition a piece of gear but that's not the same as being able to audition a bunch of options (lets say 500 series pre-amps between $500-1000 ) and then decide which you'd like to buy.
Buying direct from the manufacturer is great if you already know what you want but not so great if you know what you need but don't have a specific manufacturer or model in mind.

kslight · Post by **kslight** » Mon Mar 02, 2015 10:05 am

If I can't demo the gear I want at the store there really is no advantage for me to patronize that store.

However, this is hardly exclusive to pro audio.

Ever since Ecommerce and specifically Amazon every brick and mortar store is threatened, and the businesses that don't provide "service" to make up for it have failed or will soon. Oftentimes the best "service" they offer is that I can walk out of there with something I need right now instead of waiting for shipping...which for some items (food!) is a pretty good selling point. But unless I can head 2 head different gear in store, I can probably wait 2-3 days for free shipping, and save on sales tax/gas to boot.

Hell, I even had to order my mailbox and post online recently because the ones that Home Depot chose to stock in town were not appropriate for installing in frozen ground...

JWL · Post by **JWL** » Mon Mar 02, 2015 12:55 pm

Yes. Because capitalism.

We do have a few dealers, but the vast majority of our sales (probably more than 99%) are direct to the customer. It's tough to keep are factory-direct pricing as low as possible and still include enough margin for dealers to make a profit as well.

Dot · Post by **Dot** » Mon Mar 02, 2015 2:42 pm

Hi JWL,

Good to see a manufacturer chime in.

Could I ask you what the PADs really even bring to the table?

In your case I doubt there are any salespeople at PADs who can offer any real knowledge on studio acoustics and your products.

Even in terms of gear, I'd be surprised if there's even a handful of people in the US at PADs who have enough of a real engineering and production background to expertly recommend gear and systems with the client's best interests in mind.

And that handful could probably ultimately do better to sell their expertise rather than commissions on boxes sold.

Interested in your take.

Recording Engineer · Post by **Recording Engineer** » Mon Mar 02, 2015 3:02 pm

If you're a brick & mortar (and online) PAD with a focus on boutique gear (say up to as big as UA or Manley), located right in the heart of some major music city (or any other place where you actually get tons of traffic to compare gear), then you're probably fine for the long-term future.

But there's also the huge boutique market-share who will probably almost never go into one of those places... I've been at it professionally for 18-years and I've still never been to or bought from Vintage King LA; for no other reason than I just haven't yet!

In addition, I've not once ever seeked advice from a dealer; on a technical issue or for a purchase. All reviews, forums (it's pretty easy to weed out the BS) and my own and friends past experience help me make good informed decisions. Sometimes they're the right decision, sometimes not.

If I'm like most people, I research it, then I either borrow it or buy it. If after the new excitement is gone and I'm no longer using it because I'm not feeling it or it doesn't do anything I can't do with what I already had, then away it goes and I try consideration #2... And on it goes, with everything!

At this point, the only thing a dealer or distributor does for me on occasion is let me know of some new boutique brand that I notice in their TapeOp mag ad or at their booth at AES or something, that I somehow missed before.

If you have a PAD that's focused more for the Joe Public market, then I'd be concerned for my long-term future if I wasn't one of the mega dealers!

Scodiddly · Post by **Scodiddly** » Tue Mar 03, 2015 4:21 pm

"Pro Audio" covers more than just recording, though. I work for a mostly live sound pro audio dealer in the Chicago area, and we do a lot of business with corporate clients, churches, schools, etc. The benefits* to the average church customer are pretty clear compared to a studio guy who's trying to choose between two different LDC mics.

*benefits for a live sound customer: Design and integration help, a service tech who can make house calls, availability of emergency loaner gear.

wren · Post by **wren** » Tue Mar 03, 2015 7:05 pm

Scodiddly wrote:"Pro Audio" covers more than just recording, though. I work for a mostly live sound pro audio dealer in the Chicago area, and we do a lot of business with corporate clients, churches, schools, etc. The benefits* to the average church customer are pretty clear compared to a studio guy who's trying to choose between two different LDC mics.

*benefits for a live sound customer: Design and integration help, a service tech who can make house calls, availability of emergency loaner gear.

Yup. The service of selling "turnkey systems" to churches, venues, etc. rather than selling them a bunch of components is growing and growing. I used to work for a company that had a "live event" division and an "install" division - we rarely crossed paths, but there were a few times where I was brought in to tune a system that was giving the installers trouble. On one really big church install we did, the owner paid me to do sound at the church every Sunday for the first month after the install. I was able to dial the system in really well, then we saved everything I did (everything was digital). Whenever there's an issue (i.e. whenever a volunteer monkeys with the mixer enough to start causing problems), someone's able to go and just re-load the settings I saved. It's an easy service to provide, and it's something the church was more than happy to pay extra for. The demand for that type of service is growing, and few companies do it well - those who do are going to survive without any problem.

The downside of that type of system is twofold: first, it results in fewer venues employing skilled engineers - or paying them the appropriate wage, anyway - they want a system that's essentially dummy-proof, so they employ dummies to operate it and pay them dummy wages; and second, it results in people who only have experience working on aforementioned dummy-proof-type systems saying they have experience working as audio engineers, and that never ends well. But that's another subject and a rant for a different day...

Dot · Post by **Dot** » Wed Mar 04, 2015 6:40 am

I'm not including "pro sound" in this. No live sound reinforcement or systems?which are often tied in closely with installations and technical services on a different scale.

I've always gone by the distinction of "audio engineer" in recording studios, and "sound engineer" for live sound applications. I've worked in both capacities. Often very different beasts, markets, and skill sets.

Thanks for piping in, and sorry if I wasn't more clear.

I would also agree that pro live sound companies have more technical expertise and product knowledge than most pro audio dealers. Pro live sound companies tend to be more systems and solutions based. Pro audio often tends to sell individual boxes, most not bigger than a bread box.

Jim Williams · Post by **Jim Williams** » Wed Mar 04, 2015 7:38 am

"The Internet Killed the Audio Store" ~ The Bungles.

JWL · Post by **JWL** » Wed Mar 04, 2015 10:11 am

Dot wrote: Could I ask you what the PADs really even bring to the table?

Great question. Ideally they will educate their customers about acoustic treatment in general, and RealTraps in particular, bringing some sales to customers who would otherwise have never heard about us or known the benefits of room treatment.

Dot wrote: In your case I doubt there are any salespeople at PADs who can offer any real knowledge on studio acoustics and your products.

Even in terms of gear, I'd be surprised if there's even a handful of people in the US at PADs who have enough of a real engineering and production background to expertly recommend gear and systems with the client's best interests in mind.

And that handful could probably ultimately do better to sell their expertise rather than commissions on boxes sold.

Interested in your take.

I agree with this for the most part. Some of our dealers are really good about it, and we do our best to train salespeople on how to use our products well. And I do help sometimes with questions. But once in a while I end up in close consultation with the customer, designing the room treatment for them, and yet the dealer still expects to make money from that sale when they haven't really "earned" it, so to speak. I the end I always err on the side of taking care of the customer, but there is a reason the vast majority of our sales are direct to the customer. Not many dealers have the expertise in acoustics that we do, and as a company we pride ourselves on the consultation and customer service available to every customer who wants or needs it.

It is also no accident that the majority of our dealer sales are for our more self-contained, purpose driven products like the Portable Vocal Booth.

digitaldrummer · Post by **digitaldrummer** » Mon Mar 16, 2015 10:53 am

From an end-user perspective I think access to eBay, Craigslist, Reverb, etc. has also likely contributed. It is so much easier to get used equipment today. I'd guess in the 60's through 90's it was almost exclusively done through PADs. I certainly don't remember seeing any Pro Audio section in the classified ads (back when there were these things called newspapers kids...).

In Austin, Craigslist is pretty active and usually with stuff you can't even find at a local pro audio store (new or used - and let's leave GC out since I don't think they really qualify anyway). If you can't find it local, everybody sells used gear online now or you can hit the auction sites. I'm all for going direct and skipping the dealers to save 20% or more markup on used gear. and so far it's been about 99% successful.

Mike

Dot · Post by **Dot** » Thu Mar 10, 2016 9:19 am

I've actually been doing more research on the business model of manufacturers selling and servicing direct vs going through distribution and retailers.

Just wanted to see if anyone else could pipe in here with your thoughts, ideas, and experiences.

Jim Williams · Post by **Jim Williams** » Thu Mar 10, 2016 10:35 am

It's a triple heavy lift as you are responsible for sales, advertizing and everything else a distributor does.

markjazzbassist · Post by **markjazzbassist** » Thu Mar 10, 2016 10:44 am

I used to work for an audio manufacturer based in LA called Tascam. They have both live sound products and audio recording products. I worked in Sales to Dealers.

For us the Live sound component (as mentioned above) was always strong because churches, buildings, etc always need sound and stuff breaks and needs to be replaced/upgraded. Also these costs are standard in building price so it's not like people are taken aback that a sound system is expensive.

Conversely our pro audio products were very very difficult to sell. Mostly because the studio market is not growing, it is shrinking at a very rapid rate. The studios that are already up and running don't need more high end gear, they either have it and once a year buy something or don''t have it and work around without it. The market is just not there, the consumer and prosumer markets are alive and well, but pro audio stuff just wouldn't sell (so invariably it was not marketed or R/D'd, we had a couple products and that was it). On top of that the dealers we did have were mostly living in the 70's expecting profit margins of 20+ percent on each piece. In the modern age of Amazon, 5-10 points is generous. So they would bitch and complain but the reality is there wasn't much money in this market.

As a consumer myself (not longer working the sales industry) I can say I would rather buy something used or new and have it shipped to me and try it out personally. If it doesn't work for me, I just flip it for cost and try something else. In effect I have become my own retailer, i just don't make a profit, i exist to try gear, if that makes sense.

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Are pro audio dealers becoming obsolete?

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