"Why we like Harbeth speakers" - Users feedback

[Sebastien]

Hi Eric,

Yes, sales taxes are a little bit higher here in Quebec. They are around 13.5% actually.

Incredible the price you can get if you buy from the UK! I also read on a forum that Harbeth has already sold directly to some customer worldwide were they don't have any distributor/retailer. In that case, I'm talking about Australia. Can you imagine how much they save without those intermediary? A lot!

Maybe Alan can gives us precisions about that. Does that practice still exist?

Sebastien

[kittykat]

This is not a simple issue and humbly feel that it goes beyond just the retailer/ dealer, the distributor, but also distributors of other competitive products (through price setting) and even government policies (pertaining to retail protectionism).

Pricing is unfortunately imho very arbitrary when a manufactured item is not considered a “commodity” (in a broad sense). And “hifi” somehow isn’t or hasn’t fallen into this category, unlike say ipods (or what surround sound gear seems to be heading towards).

There are some very valid points here. EricW raises “value add”, and feel that perception of value add does make buyers’ decisions in this day and age a pretty significant deal maker or breaker. The “trouble” for a self importer is minimal and most of the paperwork is done by freight forwarders (at least for the transitional stages) and clearing agents (here in Australia anyway) who charge a small amount. Australia (and NZ) are pretty extreme examples of electronics pricing where premiums over other countries are difficult if not impossible to explain. This is really the boondocks as far as access is concerned (and pricing is after all an issue of access) and if you look at how things are priced, you can imagine a horse and carriage outside the pub waiting to take you down to the wharf where a ship waits to transport you back to the colonial mother.

It doesn’t help either when a government imposes retail protectionist requirements like C-Tick (Electromagnetic clearance, something like CE etc). It just makes things simply much more expensive. Why regulate and price things like they are semi precious objects when they are really only manufactured commodities you use and throw when they break. (Ok, maybe not the Harbeths).

Perhaps this is an issue of technology and information moving at speeds beyond what the current retail and distribution chain can handle. Should we be addressing access instead? It might give the whole 2 channel industry a big shot in the arm.

[hifi_dave]

Thank you Sebastien.

Some years ago, I had a chap in the shop asking if I could service his Linn LP12 as he had taken it to another dealer who had charged him £200 and it wasn't right. I did the job and charged him £10 and he said 'one day I will buy a big system from you'.

True to his word, a year later he came in to order the 'best system you have'. This was followed by several more, one each for every home he owned including an island he owned in the Caribbean.

It goes to prove that you never can tell !!!

[A.S.]

A few posts back someone questioned the role of the importer/distributor. So this morning, we at Harbeth UK did some blue-sky thinking analysing a world without distributors. It may sound appealing to the consumer, but I can assure you that the overall consequence is unlikely to appeal.

Assuming that, overnight, all distributors and overseas retailers evaporated, and assuming that the end-user demand remained the same but now ordering direct, this is how we would have to cope with the new situation:

• We would have to recruit at least two full time, professional sales staff to 'nurse' (I quote) each and every user through the selection process, by email/phone guiding them on what we believe to be the best model/veneer for them without ever meeting them, seeing their room or knowing about their audio purchasing history, tastes etc.. We currently employ no sales staff.
• We would have to recruit at least two, full time logistics persons to arrange the packing, paperwork and despatch of each pair, pair by pair, and call-in various freight companies during the day to collect. This is a part-time function at present.
• We would need to recruit additional staff in the accounting department (currently one person) to handle payments in
• We would need to know about duty rates, commodity codes and the rules and regulations for individual regions as a mistake on any of these details could result in goods being impounded
• We'd need to employ a person to handle the inevitable transit damage, insurance claims and the like
• We'd need a completely new invoicing system of greatly expanded capacity as we moved from forty distributors to thousands of direct sales records
• We'd need a new telephone/email system to minimise on-hold time
• We would be unable to plan production more than a day or two in advance
• We would have to greatly increase our inventory to be able to satisfy any and every ad hoc order we received, regardless of model, veneer or quantity
• We would dissipate our cash over a mountain of inventory
• Our storage space would have to increase - as would insurance costs; we'd need a bigger factory
• We'd need more, flexible production staff who could turn their hand to any model at zero notice
• Maintaining QC would be extremely challenging as we moved from a batch production method to a series of one-offs
• The record keeping system would have to be completely overhauled to handle the volume of data, with ISO9000 implications
• We would have to negotiate carefully with our bank as to how they would handle the increased volume of activity and prove that our cash flow (v. inventory investment) was solid

That's just what we thought of in the first five minutes. It's the tip of the iceberg. None of this would come free. Efficiency would plummet. Waiting times would inevitably increase. Just to cover the extra staff costs we'd need to double our turnover (impossible). So clearly there is a vital buffer role performed by the importer/wholesaler/retailer, in addition to which he manages local reviews, after-care, exhibitions and so on. It looks easy - it may look like a gold mine but it isn't.

[STHLS5]

..... another dealer who had charged him £200 and it wasn't right. I did the job and charged him £10 and he said 'one day I will buy a big system from you'..... one each for every home he owned including an island he owned in the Caribbean.

I am more interested in this guy who could afford an island but not willing to pay $190 extra but got the time to look for better price. Strange world, isn't it.

ST

[weaver]

At this time, the Super HL5 is £2280 in the UK, with a £200 premium for rosewood, my preferred finish. So, £2480 - VAT included. At current exchange, $3761 Canadian dollars.

The price of the rosewood Super HL5s in Canada is $6000 ($5999) plus combined sales tax (here in BC) of 12%, so $6720: almost double the UK price.

Just to check that the other way - how much would you expect to pay for say a Bryston 2B SST2? Current UK price looks to be around £3000 including VAT.

[keithwwk]

I am more interested in this guy who could afford an island but not willing to pay $190 extra but got the time to look for better price. Strange world, isn't it.

ST

Maybe he was just got 10bucks for his TT in that period of time.....Anything could happen after a yr..

[STHLS5]

Maybe he was just got 10bucks for his TT in that period of time.....Anything could happen after a yr..

...or maybe the guy who wanted to charge him $200 already knew about his financial standing. :))

[keithwwk]

Ok..joke aside, I do think the asking 200 may sounded too ridiculous so the owner just did not bother to talk to that service man...I guess of course, but I did encounter such cases many time made me did that and nvr called a dealer again...1 good example:

..I knew a old UK brand which produced one of the best amps for Harbeth when it was still made in United Kingdom.. I called a dealer who stored quite a mumber of these old used amps. He was pretty cheerful and friendly over the phone and happily shared me his view why these amps are so good. I was pretty convinced by him because I heard the pairing before..In the end of convesartion, he offered me a special price: CDP/Pre/Power = 16k. What's wrong with the price? well, it enough for me to buy a brand new SHL5 and P3ES2 with some changes for good LPs or CDs in that period of time (I had seen some used same amp floating in my local used market was less than 1.2k before)...I told him that's expensive and the dealer said those are obsoleted model which still the best for Harbeth, so the price is just right.."ok, many thanks for your time...I need to consider and let you know again."

That's it. The end.

[EricW]

Just to check that the other way - how much would you expect to pay for say a Bryston 2B SST2? Current UK price looks to be around £3000 including VAT.

It would be around £2000 here.

As for Alan's post above, well, if a world without distributors is a utopian fantasy, so be it. I understand the practicalities, and don't object to paying a premium over the domestic price to be able to own a pair of Harbeths. However, I'd like that premium to be fair and reasonable. When the premium on most models is, say 25 to 30%, and on the Super HL5 is more like 75 to 80%, it tells me that it's being marked up excessively relative to the other models. That was my point. The importation, insurance, shipping, storage etc. costs can't be that different, so an undue profit is being taken on that one model. Which happens to be the model I want.

So if there needs to be a distributor, fine. But I'd still like to understand the reason for the very disparate pricing of models within the line.

[Double D]

Just to check that the other way - how much would you expect to pay for say a Bryston 2B SST2? Current UK price looks to be around £3000 including VAT.

Agreed.. I am often appalled when I see north American gear advertised in the UK mags.. stuff like VPI, Audio Research, etc. carries such a stiff penalty in the UK (and I'm sure other countries) that I'm surprised any of it gets sold abroad.

It's painfully obvious that the majority of this is related to currency fluctuations in the global markets. I wouldn't be surprised that many audio manufacturers investment books are tied to the almighty US$ or perhaps the Euro, which in light of recent currency issues would be playing a great deal of havoc with peoples bottom lines.

Let's face it, even without the currency flip issues, a "distributor" is basically absorbing all the additional costs that Alan points out in his "blue sky" thinking note above. They are the ones that have to push out the product, and warehouse it.. and in many cases provide after sale support.

If you think that doesn't cost $$$ these days, then you're deluding yourself. So, in many ways it doesn't surprise me that products outside of their native market are hit with a horrible premium. Whether or not you can stomach the extra cost to get into a product that you find affinity with, is ultimately your choice.

[EricW]

Double D:

None of what you say is responsive to my specific question about relative price variations within the line. I'd appreciate it if someone could provide a specific answer, not just a general one about costs, which we all understand perfectly well. It costs no more to ship one box than another, so that doesn't explain why the markup on the Super HL5 is so disproportionately high. It's far higher than even the Monitor 40.1, which is a bigger and heavier box, and should cost more if it were simply a matter of costs.

[weaver]

Is it possible that there is a bizarre tarif applied to speakers with an output over a given frequency limit?

The SHL5 being the only one with a super tweeter.

[Quite possible spurious - but at least it focusses on your issue!]

[A.S.]

Me too (wanting to understand why SHL5 is prices as it is). There must be a logical reason.

[Double D]

EricW said: At this time, the Super HL5 is £2280 in the UK, with a £200 premium for rosewood, my preferred finish. So, £2480 - VAT included. At current exchange, $3761 Canadian dollars.

The price of the rosewood Super HL5s in Canada is $6000 ($5999) plus combined sales tax (here in BC) of 12%, so $6720: almost double the UK price.


I really don't know... the information posted on the CDN distributors site shows a price of $5,299 CDN for the standard cherry finish.. so, unless there is a huge uptick on the premium veneers ($700 sounds a bit high) from the CDN distributor, then I'm not sure how to explain this.
I would suggest that Alan perhaps contact Gunnar at Planet of Sound Distribution and get some clarification as to what they are adding on top for their distribution markup on the premium finishes here in Canada.
Just for clarity, our new HST (combined GST and PST) rate here in Ontario is 13%

[EricW]

This is indeed the "uptick" - $700. I note it's quite inconsistent with the $200 premium for rosewood on the P3ESR, which is only marginally more than the premium charged in the UK (£100).

Also, I'll repeat it one more time, because people seem to keep overlooking it: the UK prices include sales tax. North American retail prices do not include sales tax, which must be paid on top of the posted price. So when doing a pricing comparison, it is important to keep that in mind. That means, for example, that the $700 price premium for rosewood on the Super HL5 becomes an $800 premium, more or less, once you factor in the taxes. That compares to a $300 premium - tax included - in the UK. A significant difference, and surely not one explained by cost of importation alone.

But let's not focus exclusively on the veneer: the base price is too high as well. I don't see why the distributor needs vastly more profit on the Super HL5 than on other Harbeth models, unless he's cross-subsidizing, but that seems unlikely.

Look, I know it's my choice - buy or not. And I've chosen not to. So, apparently, has at least one other HUG member, who sought out a second-hand pair instead. Maybe that's not a concern to Harbeth, given the state of its order book, I don't know.

If someone is providing a necessary service, I don't begrudge him charging a reasonable price for it. But as a consumer, I don't want to be gouged. If the importer can make money at a roughly 30% markup on other Harbeth models, he surely doesn't need a 70% markup on the Super HL5. Unless, as Alan says, there is a logical explanation. If there is, I'm all ears.

[Double D]

Good point Eric... and I'd probably just assume that it is in fact the distributors cut on top.

If it's any consolation... at least the pricing in Canada is similar to the US pricing.. which typically we get the shaft on.

The only one that can properly answer this would be either the distributor, or Alan who would have to obtain clarity from the distributor.

[Sebastien]

As my question on post 81 wasn't answered, I'll ask it again:

Does Harbeth factory have already sold directly to some customer?

Sebastien

[A.S.]

We do supply and have always supplied to countries where there is no Harbeth distributor. If we believe that the stated destination is not true, or if there is ambiguity about the final destination, we will not accept the order. In these rare cases we insist on shipping directly and not via an agent in the UK or abroad. We must have certificated evidence that the speakers were truly exported to the stated destination to satisfy the UK authorities, who periodically inspect our shipping records in detail as so much of out turnover is exported.

There is a considerable amount of communication with the customer, invoicing, packing and despatch paperwork. It is time consuming. It is not what we are set up to do, but it gives us a very clear understanding of the complexity of the distributor or retailers life. Because it distracts staff from bulk-production work we do not discount. I'm sorry, but that is as much as I can say here.

[Sebastien]

Hi Alan,

Thanks for the clarification. It looks like 11:25 PM in England. I wish you a good night.

Sebastien