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I was thinking about shopping for new cars and shopping for new pianos. It's nice that when you shop for a new car, you can find out the dealer's invoice (essentially all this info is on-line). Why can't it be so easy to shop for a piano? I assume that there must be a lot of variation between what different dealers pay (maybe because of differential shipping costs, etc..)
Can someone shed some on light on this (for the benefit of a experienced pianist, but one who has little clue about shopping for a new piano -- as I am right now).
thanks!
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Dear soccer,
Although there is some difference between dealers in cost (one may buy more quantity, or discontinued\old stock, etc.) the larger picture is how the dealer treats the piano he has just received. Is the piano well regulated, voiced, and tuned? Is the piano well prepped so that the customer auditions the best possible instrument?
Other differences include the business model itself. Does the store you shop at look to get full retail or do they discount? Is there a set discount policy? Do you have to negotiate just to get ANY price? How is their reputation for service after delivery? Will they be there for you if there is a problem?
Buy and read The Piano Book. It is also helpful to read the supplement. This covers recent changes and current retail pricing.
Also, ask questions. Ask the store, ask here, ask elsewhere. When all the answers match, you've found a good dealer. Then you just have to choose a piano.
Good luck and keep us posted,
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Thanks for the info. That all makes sense, and I understand that the dealers will vary in their level of prep, service, etc..
But I still wonder why a customer couldn't know what the general invoice that a dealer pays -- This way, you could compare the level of service, prep, reputation of dealer etc.. with the markup between the amount the dealer pays with the end price the customer pays. So, yes, I would be willing to pay more of a mark up given I realize that a particular dealer is more reputable, more knowledgable, has a better record of good and prompt service, etc...
But of course, the knowledge of the actual markup between invoice and customer purchase price would be helpful -
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It would be great if the dealer showed his invoices. But I think the customer should wear a sticker showing all his financial assets and income so the dealer knows how much money he really has and therefore can't pretend about what he can or cannot afford.
Sound fair?
Regards,
Rick Clark
Rick Clark
Piano tuner-technician
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I think that is fair. I don't have a problem sharing what I have to spend, if I know I'll have reciprocal honesty. Though many people aren't as willing to share. (on both sides) -pedagogue
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When a car dealer shows a retail customer a "dealer invoice", the profit is NOT revealed, because there are rebates, dealer incentives, quantity discounts etc...
Im not sure I know of any retail product that the wholesale is known to the public... Why should pianos be different?
I also second Rich Glassini's remarks.
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I didn't mean to generate such a hostile response, Rick. But I actually agree with the comment that I myself am willing to share my relevant info (honestly) if I expect that in return from a dealer.
Yes, customers don't want to reveal all pertinent info -- neither do dealers -- it's not in their best interest to do so. However, I would totally upfront if I knew that a dealer were being so as well --
Of course, there's also a difference between _able_ to spend and _willing_ to spend for a customer. Just like there's a difference between _able_ to sell for a small profit and _willing_ to sell for a small profit. I totally understand that and if a dealer said, "frankly, I could sell this piano to you for less, but I choose not to for reasons x,y,z" -- that's cool with me. Up front and honest, and so will I be...
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Could it be that the reason this is such an issue is that most people only buy maybe one piano, lifetime?
I think the lack of frequency of the event contributes to buyers being somewhat uncomfortable about the nature of piano sales.
I think there is enough information out there that you can get an adequate read on how much the wholesale price was. Educate yourself with the resources discussed on the PF and you'll go in well enough informed.
I think the comment about everyone being up front and honest with each other is naive. Take a look at the thread a while back about the group purchase of Kawais.
Piano dealers are trying to make a living too. Offer a reasonable price and you'll likely get a reasonable response. Try to lowball someone, and hey, the game's afoot. But it is, and has been for many years, a negotiation situation.
Frankly, in my experience you can get a better price if the dealer rperceives that you want to be fair, not just get as low a price as possible.
Michael
====
He is so solemn, detached and uninvolved he makes Mr. Spock look like Hunter S. Thompson at closing time.'
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Good points Rich, and Rick.
Certainly the "invoice" you see at a car dealership is not what the dealer actually pays for the automobile. The car industry has done so well at promoting this idea, that people actually believe it. There is no way a dealer could stay in business selling cars for $500 or $1000 over his actual cost. The cost of sale is simply more than that... and it can't be made up "in volume".
Secondly, to answer the original question, there is a lot of variance in what dealers pay for pianos depending as Rich said on the store, and also on the manufacturer. Some manufacturers have a set wholesale, and a set retail price. Others have a wholesale pricelist similar to the retail price list, then give 5% for a larger order, and an additional 10% if you order today, and an additional 5% because you have a technician on staff, and on and on.
It's really difficult to know what the dealer paid for the piano out of pocket... but in the end who cares?
You either trust the dealer you're working with or you don't.
As Michael said, "you can get a better price if the dealer perceives that you want to be fair, not just get as low a price as possible."
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Rich, Rick, Michael, Jonathan, Points well taken -- Yes, I wouldn't want to lowball a dealer, and I do realize that they must make a living like everyone else.
You're right that it comes down to whether "you trust the dealer you're working with or you don't". Maybe that's the problem I'm really trying to convey -- My feeling so far as I've been to just a few places is that I don't really feel that trust. I'm _sure_ there are many honest, fair and trustworthy ones out there, but I live in a fairly small market so the options are less.
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Totally understandable. It's also understandable that you want to find the best value you can. Don't think for a minute that I think you should have to pay an unfair price for the piano/prep that you receive.
It can be very difficult when you don't feel you've established a trusting relationship with a dealer. You don't trust the value of the instrument you're seeing, and you don't trust the price asked for it, and then you certainly can't trust the quality of the prep included with it. I think it's so important to find a dealer you have a repoire with, just for these reasons. Everything else seems to work itself out if the relationship between dealer and customer is sound.
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Let me give you an example. A particular grand piano had a wholesale price of $9300. I consult a number of dealerships who sell this line of pianos.
One dealership is in a smaller, albeit growing market. They sell about 100-125 pianos a year, grossing about $500,000-$650,000 a year. In thier growing market they pay about the same rent as in more urban locations as demand for good retail space is high. The same goes for their payroll expenses. Because they are a not a large dealership for the supplier, yet not very small, they get a 5% discount bringing the grand's cost to them to $8835 + fgt = $9000.
Another client is a very large metropolitan dealership. They sell about 1500 pianos a year grossing just over $8,000,000 in 5 locations plus outside sales. They sell from warehouse locations and their rents and payroll (per employee) is about the same, if not a little less than the smaller dealership. They buy pianos from the manufacturer in containers and receive a 25% discount. The example grand costs them $7,200.
The breakeven point (selling price needed on the average sale to meet all annual expenses but make no profit) for the smaller dealership is right on the industry average of ~41%. They need to sell the example piano for $15,300 just to break even. They ask $17,500 for the piano, but will sell it at about $16,000 if needed.
The larger dealership also needs to make 41% to break even. They break even at $12,200. They ask $14,500 and will take $13,000 if needed.
Thus one dealership breaks even at $15,300 while the other breaks even at $12,200 a ~20% difference!
Don't think that the price advantage always goes to the volume buyer. For example, one of my other clients in a small market. He only sells about 50-60 units a year. However he is in a small piano rebuilding shop with a small showroom and he owns the building. He only needs about a 28% margin to break even. While he pays the full wholsesale price of $9300 he can sell it at $12,900 and break even.
In addition to these factors, some dealerships have higher overhead due to their willingness to do more extensive pre- and post-sales services.
The bottom line...a shopper should explore all the options in their local market. Comparing prices nationally inevitably leads to bad feelings. People think that because one particular dealership sells for less that those selling for more are profiteering.
Unless you have deep experience and knowledge of the particular market and dealership it is nearly impossible to determine what a "fair" price for that dealership is. Knowing the regular wholesale price (generally 1/2 of Ancott) doesn't mean much.
Sure the consumer can shop nationally to find the best price, but it isn't a "fair" comparison, and often leads to ill feelings when both parties are actually acting ethically and within good business parameters.
Piano Industry Consultant
Co-author (with Larry Fine) of Practical Piano Valuation www.jasonsmc@msn.com
Contributing Editor & Consultant - Acoustic & Digital Piano Buyer
Retired owned of Jasons Music Center Maryland/DC/No. VA Family Owned and Operated Since 1937.
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Wonderful post Steve.
It helps to see real numbers, and how a 10% margin isn't possible to stay in business (as the auto industry would have us believe).
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Steve, Thanks for your excellent post. Again, I agree and see your point about comparing across markets.
Here's the one part that still gets me a bit uneasy -- if one particular store has a big variance in what they'll agree to sell at for different customers. So, pianos_are_us sells a certain new Steinway B to one customer for a drastically higher amount than they sell an identical new Steinway B to a different customer in the same area.
Now, maybe this doesn't occur that much and I'm just paranoid -- and others can shed light on this. Do many dealers have a fixed price (no haggling)?
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Thank you for the insight into this Steve. Having folks like you on this forum makes it an excellent resource.
Ralph The Third
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Originally posted by us_soccer: Steve, Thanks for your excellent post. Again, I agree and see your point about comparing across markets.
Here's the one part that still gets me a bit uneasy -- if one particular store has a big variance in what they'll agree to sell at for different customers. So, pianos_are_us sells a certain new Steinway B to one customer for a drastically higher amount than they sell an identical new Steinway B to a different customer in the same area.
Now, maybe this doesn't occur that much and I'm just paranoid -- and others can shed light on this. Do many dealers have a fixed price (no haggling)? If you read my post you will see that the "asking" price and the "best" price are different. This is to allow for trade-ins, floor samples that are a little shopworn, discounts to avoid floorplan interest and for those shoppers who haggle for better prices. When you shop negotiation is still generally part of the process. However, dealerships cannot compete with out-of-state dealerships that have signicantly lower costs.
Piano Industry Consultant
Co-author (with Larry Fine) of Practical Piano Valuation www.jasonsmc@msn.com
Contributing Editor & Consultant - Acoustic & Digital Piano Buyer
Retired owned of Jasons Music Center Maryland/DC/No. VA Family Owned and Operated Since 1937.
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I like this discussion - congratulations to the professonal tone by all! And Rick's suggestion the customer better show "his" - after we show "ours" - gets tops in my book... ] Another little, often overlooked factor is also *how* the piano is being sold and by *whom*. Without trying to belittle the honour of our piano salespeople [provided they are *honourable*... ] commisssioned sales staff simply is a another major cost factor especially for the larger department type stores. As a small business owner, I belong to the fortunate few owner-operators who are able to run their business in this industry without the added cost of sales people. Which can be dangerous. Sometimes your emotions can get the better of you! web page norbert
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The dealer really makes the difference. We have been shopping for a replacement of our old grand for some time. There were several pianos that I wanted to play based on reading great reviews of them here. Everytime we visited that shop the pianos were badly out of tune, actions were poorly adjusted including sticking keys, dampers hangin up, etc. It was really hard to tell if we would like that piano. Based on Fine's book and postings here, that dealer was charging above average for his pianos. The big chain outfits had similar problems. The shop we bought from had every piano there tuned and very well adjusted. From the Bosendorfer to the George Steck every piano was on the floor showing it's best stuff. This guys prices were also more in the range of what I had come to expect.
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Also keep in mind that there are honest dealers whose price is meant to be the purchase price. Most dealers will discount this if necessary to make a sale, but many times the price on the piano is considered fair, and meant to be a "no haggle" price. In other words, the pianos that sell for less than this are under priced, rather than the ones selling for higher being over priced.
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Good work by a store - as usual - has its own rewards! Enjoy your new piano - bought at a place that obviously *cares*..... [Besides simply being smart! ] norbert
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