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Why headphone prices are vastly different from site to site

post #1 of 6
10/22/09 at 2:36am
Thread Starter 
Why is it places like Bestbuy and walmart sell headphones and things in general so expensive when they are sold by other electronics stores for nearly half that price.

take the Hd 515 for example, its like $115 at walmart and only 85$ through some amazon stores.

My questions are the following:

-Do these businesses buy direct from sennheiser? If so, do they need to be an authorized dealer or reseller and some of the profit goes back to sennheiser? Or is it they they buy in bulk at much lower prices than direct from sennheisers store and are allowed to sell at w/e price they want?

-Is it costly to become a retailer like that? I'd like to set my own electronics shop up but I dont really know much about how some stores like J&R sell their headphones for nearly half what Sennheiser sells them at through their official store.
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post #2 of 6
10/22/09 at 3:48am
One of the reasons things may be more expensive at B&M stores is because they have to pay more to keep the store running. Things like rent, utilities, labor, etc will cost more for them than it will for a store that sells only online.
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post #3 of 6
10/22/09 at 4:09am
Wal Mart no doubt buys their headphones for the same prices as other etailers. The difference is audio gear has typically HUGE markups. I work at the worlds largest electronic retailer and we have a high end ish department (Magnolia Home Theater) and my employee discount (5% above cost) often brings the prices of a $2,000 MSRP pair of Martin Logans to a little more than $1k. The same applies to headphones but to a smaller degree. People who buy things in store these days usually buy it for the convenience, and higher prices are the charge for the convenience much like shipping is when one buys online. I can only imagine the margin on an $8,000 pair of Bowers and Wilkins.
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post #4 of 6
10/22/09 at 4:49am
Products obviously have a markup, but the reason for the markup and the variance between retailers is mainly relative to what their operating costs are. As squid+ stated, stores with higher costs will likely mark up their products more.

In regards to margins and stuff, just because something costs $1000 and is sold for $2000 doesn't mean that the company will be +$1000 after the sale.
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post #5 of 6
10/22/09 at 4:52am
Quote:
Originally Posted by intoflatlines View Post
In regards to margins and stuff, just because something costs $1000 and is sold for $2000 doesn't mean that the company will be +$1000 after the sale.
I realize that. But the point is that typically anything audio related = high markup. A $2,000 computer, for example, may only have a couple of hundred of dollars in margin. An $800 computer will likely have less than $50 in margin. You will see less of a price discrepancy on low margin items vs. high margin items sold at any given store.
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post #6 of 6
10/22/09 at 11:29am
In Czech republic, many shops have different prices. Big Electronic shops have them for MSRP, internet shops have them for diferent prices, because some of them buy them from germany and then resell(and headphones from germany is cheaper for something like 20-30%)
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