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Why did Bob Carver move to selling direct to the customer rather than dealers?


Ar9Jim

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This is a great question that is asked often. There are many reasons that we would like to share.

 

1) Value added processes - Customer value. When you get down to the fundamentals, a happy customer is our goal. It's the customers money being exchanged. The customers deserve value regardless of income level.

2) The dealer/rep based model is extremely expensive. Often when you buy a product from a dealer, the dealer receives up to 1/2 of the retail price. In other words, less than 1/2 of the retail price goes into producing the product you are receiving .

3) Few dealers offer service. The service falls on the manufacturer. The support once offered by dealers is mostly history, reducing the value added by their part of the process.

4) Some dealers undercut others with their margins, effectively devaluing the product. This undercutting results in a race to the bottom. Some on-line dealers undercut the brick and mortar using the lower overhead advantage.

5) The top 3 dealers that sold 80% of the product, were all on-line dealers, not brick and mortar. I was one of them (although Carver dedicated), and closed my store when accepting this position with Bob Carver. We can market our products on-line ourselves.

6) The customer experiencing our products in their home, often compared to others of higher cost, is an advantage for Bob's designs. Bob knows how to design what sounds good, and designs for synergy with a wide range of products. Head to head we are tough to beat. Selling direct is in our favor. In the customers home, as part of their system, is the true test for an audio products actual value to the customer.

 

Summary:

We can spend considerably more money building excellent products, that offer much greater value to the customer. Leveraging technology throughout the entire process that is Bob Carver Company, provides for excellent products at about 1/2 the price of the obsolete rep and dealer networks. The customer wins and the company wins. It's better to hear audio gear at home.

 

This is why we sell direct. It provides for much greater customer value and also provides more control of our destiny. 

 

It may be worth considering the business models of companies you buy from. Is the dealer adding 50% to the value of your purchase, or should you look at who sells direct and is possibly putting that 50% into the product you receive? Just a thought in a fast changing market.

 

Jim Clark

Director of Operations

Bob Carver Company.

 

 

Edited by Ar9Jim
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23 hours ago, Ar9Jim said:

considering the business models of companies you buy from. Is the dealer adding 50% to the value of what you purchase,

Crazy to think how this applies to the dealer model of Automobiles..., a few entities out there are trying to disrupt this, e.g., www.Cars.com, and others..., but they are still a middle-man.  Seems that Tesla may be selling direct..., others?  I dunno.  But it's ripe for disruption..., separation of service from sales..., (pretty much already separated in most dealerships - just housed in the same building)..., something to ponder.

Edited by AndrewJohn
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This is a press release and update for dealers and reps from over a year ago (3-23-22).

USA Tube Audio continues to run ads for our products and pulls a 'bait and switch', when customers call with interest in our products. Their latest ad was placed just last month, in spite of not having access to the products they are advertising. Guess we should be flattered that they wish to capitalize on leveraging the brand name alone.  Bob Carver Company is the only source for Bob Carver products, period. https://www.audiogon.com/listings/lisa20gf-bob-carver-350-mono-amps-0-financing-3-years-tube

 

March 3, 2022

Dear Bob Carver Representatives and Dealers:

Continuing rapid changes in our business climate have resulted in a review of our longstanding business model. Major changes to our operating model are in the works now. Resulting from this analysis, we will begin selling directly to consumers only. Our new web site will reflect this.

We will be filling the existing back orders as soon as possible. We understand if you prefer a cancellation. 

We apologize for the shipping delays. We expect to have the existing back-orders filled in the next 30 days. 

It has been a pleasure collaborating with you. We appreciate your continued friendship and well wishes as Bob Carver launches an on-line store, coming soon. We wish everyone continued success as the market continues to evolve.

We hope you can understand that changes were necessitated to fulfill Bob’s vision and to remain a healthy and vibrant organization in these modern and ever-changing times.

Sincerely, 

Jim Clark

Director of Operations

Bob Carver, LLC

jim@bobcarver.com

815-985-3557

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6 hours ago, AndrewJohn said:

Crazy to think how this applies to the dealer model of Automobiles..., a few entities out there are trying to disrupt this, e.g., www.Cars.com, and others..., but they are still a middle-man.  Seems that Tesla may be selling direct..., others?  I dunno.  But it's ripe for disruption..., separation of service from sales..., (pretty much already separated in most dealerships - just housed in the same building)..., something to ponder.

Good point about separating of service from sales. Imagine a 50/50 split between the dealer and the manufacturer, and the manufacturer absorbed the cost of design and build of the unit. How much of the customers money is going into the product they will receive? Not enough, imho.. Generally 20% is in the actual product. 5X cost at retail.

Many customers, that have enough money to buy quality audio products, didn't get wealthy spending frivolously.

They often appreciate the increased value selling direct can deliver. 

Edited by Ar9Jim
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19 hours ago, Ar9Jim said:

USA Tube Audio continues to run ads for our products and pulls a 'bait and switch',

 

hi Jim, 

 

Isn't this grounds for a "cease and desist" letter from those legal experts able to file a claim for damages, if not stopped?

 

I imagine that if I used "Coke" or "Coca Cola" in such a way, I would find myself in court, being sued for punitive damages to the degree and extent that I profited off their brand name AND to the degree that it damaged and eroded their brand and confused customers.  Not a small number. 

 

It just sucks that some companies are this slimy..., time for a wake-up call from a lawyer's letter..., or, better yet, since they just re-placed that advertisement, go straight to filing a claim in court pursuing an astronomical number in combined damages.

 

Nope, this is not a time to feel flattered, this is a time to assess damages.  Redirecting prospects that you should be selling to by overtly using the Bob Carver name/brand is not competition, it's technically theft, and there are laws against that.

 

...just how I see it.

 

AJ

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It's the endless complications that make changing the business model to 'direct to consumer', not only good for customer value, but almost a necessity for companies to have control of their destiny. Many dealers are reputable and honest. Many are hardworking people trapped in a paradigm shift and struggling for survival. Many would sell their sister at a discount. Bait and switch is sad. I just put a pair of 350s that are not available, in a shopping cart, and would have had payment collected, only to be steered toward another brand, after the money has been spent. That's a problem we will correct.

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I'm only about 20 minutes from USA Tube Audio.  Is there something I can do?  Maybe go to the showroom and ask for a RAM 285? Pretend to buy a 350?  Request a demo of the Crimson 275?   Let me know.

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1 hour ago, wrf said:

I'm only about 20 minutes from USA Tube Audio.  Is there something I can do?  Maybe go to the showroom and ask for a RAM 285? Pretend to buy a 350?  Request a demo of the Crimson 275?   Let me know.

Thank you!

I sent a nice email asking for this situation to be corrected and included the press release/email from last year, just in case it was missed. Hopeful that a simple letter will resolve the issue.

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