The Pros and Cons of Factory-Direct
Sales
Last month,
I talked about the do-it-yourself (DIY) approach, and the impressive value one can get
from kits such as those sold for the Kepler loudspeaker from Exodus Audio. Not all of us
want to build our own audio gear, but most of us do want to get the best bang for the
buck. Luckily, there’s another alternative.
An increasing number of audio manufacturers sell fully
assembled, finished components direct from their factories, which means that they can
often offer impressive products for substantially less than what you’d pay for them
at a dealer. Take the Axiom Audio M60 v2 loudspeaker, which Philip Beaudette reviews
this month. It sells through Axiom’s website for under $1000 per pair. Philip was so
impressed with the M60 v2 that he called it "one of the best speaker values on
the market today" -- and part of that value has to do with Axiom’s
factory-direct approach.
The main benefit to consumers of factory-direct sales is
lower retail price: The product goes straight from manufacturer to consumer, bypassing all
middlemen. At minimum, the retailer is removed, but often the distributor as well, along
with the markup in price charged by each. This can reduce the final price by as much as
half. If the M60 v2 were sold in stores, I wouldn’t be surprised if it cost
closer to $2000/pair.
Another benefit of buying factory-direct is product
customization. Because each consumer directly interacts with the manufacturer, it’s
easier for the latter to offer each buyer a uniquely configured product -- something that
would be harder to do, or even impossible, through the usual chain of retailers and
distributors. Axiom offers a selection of custom speaker finishes that include one-off
stains and veneers to match your own décor -- something far easier to handle via direct
sales than when the consumer must go through one or more middlemen, each of whom will not
only have to pass along the information accurately, but make some money as well.
However, Axiom’s customization options are the
exception, not the rule. Most manufacturers who currently sell factory-direct don’t
yet offer this degree of customization. Furthermore, many manufacturers who don’t
sell factory-direct do offer a range of custom options. But factory-direct sales and
product customization are such natural partners that I foresee them becoming more and more
common.
But while the key benefit for consumers buying
factory-direct will always be lower price, money isn’t everything, and the
factory-direct approach has some definite downsides. Most important, the factory-direct
shopper can’t see, touch, or hear the product in a store before buying it.
Factory-direct sellers are confined to their websites, catalogs, and ads to showcase their
products, which consumers usually purchase sound unheard, performance unknown.
To offset this problem, many factory-direct sellers offer
money-back guarantees -- if you’re not happy with the product, simply return it with
no questions asked. For many, that’s enough to overcome their fears of buying an
unknown product. Others might still prefer to try it out in a store first.
Another downside of factory-direct sales is that it’s
impossible to compare a product with another from the same or a competing manufacturer, as
you can in a store. While shopping for my latest TV, I visited a store that carried all
the major brands -- I was able to see the competitors side by side. Likewise, good audio
stores have listening rooms and a plethora of products, and usually give the customer as
much listening time as he or she needs before laying any money down. Even with a
money-back guarantee, buying factory-direct isn’t conducive to this sort of
comparison shopping.
Then there’s the fact that when you buy a product in a
store, you can usually take it home right away -- it’s part of the fun of shopping in
person, as compared to waiting for your mail order to arrive. With factory-direct, the
product arrives days or even weeks later.
Finally, there’s service and repair. Retailers now
make more of a selling point of these, to persuade customers that buying in a reputable
bricks-and-mortar shop is still the best way to go. Such stores usually have service
departments in which they fix faulty products. Often, however, factory-direct sellers
eschew not only the middlemen, but local service technicians as well. If something goes
wrong with their product, you usually have to send it back to the factory to be repaired.
Whether or not buying factory-direct is the right choice
will vary from consumer to consumer and from product to product. It’s not unlike the
DIY approach I talked about last month -- a perfect solution for some, impractical or
undesirable for others.
But based on our experiences with Exodus Audio’s
Kepler speaker kit and the factory-direct-only Axiom Audio M60 v2, both are credible
ways of getting yourself a pair of speakers of tremendous value at a considerable savings
in cost. In my opinion, each method should be seriously considered by anyone who wants the
best bang for his or her buck. Consumers have many choices these days; they should take
advantage of the situation by exploring all the alternatives.
…Doug Schneider
E-mail comments to the editor@goodsound.com.
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