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BeoPlay S3 - Why is B&O undercutting its own retailers?

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Tifoso48
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Tifoso48 posted on Sat, Apr 9 2016 7:35 PM

As has been discussed, B&O retailers in the USA are not doing very well as witnessed by the closure of quite a few top locations in critical markets like SFO and DC.

Like most people, I love a good bargain but I was stunned by the discount S3 purchased through Amazon.

The MSRP is $ 399 per speaker - it is available on Amazon between $ 159 - 169 ( black or white).

How is this possible?

One has to assume that even at $ 159/169 the seller and B&O are making a profit - so then how in the world do you justify an MSRP of $ 399.

This really makes no sense at all.

 

 

 

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jk1002
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I think some of these are non licensed retailers, its not B&O themselves even though they do sell some products on amazon.

Since it is a relatively new product, my guess is it flopped beyond believe in regards to sales and they have to get rid of inventory.

Even Abt which is authorized has 250 so does Amazon so they probably will give you that price in their own branded stores too.

JK

 

 

 

 

 

 

Tifoso48
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Well, I thought so as well and called two of their retailers - i franchise 1 company store.

They obviously are aware of it, but no they are not matching or discounting - they are just frustrated!

 

 

Chris Townsend
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eBay is flooded with these speakers, most going for just over £100Confused I can only assume there is a mobile phone deal somewhere where they come as a package, and people are selling them on.

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Millemissen
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Tifoso48:

Well, I thought so as well and called two of their retailers - i franchise 1 company store.

They obviously are aware of it, but no they are not matching or discounting - they are just frustrated!

No real reason to be frustrated.

No regular B&O dealer is dependent on selling these small lowprized speakers.

There is not much earned on that anyway!

On the other hand, a lot of people, who would never have set foot in a B&O shop, now have become aware of the S3 (and B&O).

MM

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Paul W
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Paul W replied on Sun, Apr 10 2016 12:51 AM

I'm don't agree with you on that MM. I'm sure that there are days and days were B&O shops don't sell anything and a £300 S3 sale would definitely help with the finance figures or pay salesman his salary! Although, I don't feel sorry for any of the dealers as they don't seem to be doing too badly for themselves. 

It's worrying for the brand though if these PLAY products are being made incredibly cheaply and then sold at a high margin - that's seriously not a nice way to do business - I guess it proves that there are so many on this forum that will buy anything with the right badge on it!

Rob - Danish AV
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In Australia, the S3 is not available to Bang & Olufsen stores.

 

it too, is being sold on eBay AU at rediculous prices, $230AU, well under half the RRP here, lots of sellers have 20-50 in stock!

Simonbeo
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Paul W:

I'm don't agree with you on that MM. I'm sure that there are days and days were B&O shops don't sell anything and a £300 S3 sale would definitely help with the finance figures or pay salesman his salary! Although, I don't feel sorry for any of the dealers as they don't seem to be doing too badly for themselves. 

It's worrying for the brand though if these PLAY products are being made incredibly cheaply and then sold at a high margin - that's seriously not a nice way to do business - I guess it proves that there are so many on this forum that will buy anything with the right badge on it!

Paul. I personally wondered if these speakers were worthy of the "right badge" but having looked on the Amazon feedback I'd say people are very impressed with the sound. I was thinking they were a bit of a flop as they don't feel they belong in the shop but obviously they are certainly up to B&O standards, just not aesthetically or provenance wise. I suspect they're not made "incredibly cheaply" compared to competitors. The speaker is not a commodity but a product sold for what it's worth to the customer and if it's bought on-line then it would appear to be a surprise how good it is ; hence an uncomfortable position of a B&O bargain. Perhaps an intro or sample ?

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Millemissen
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I bought one as they came out (at a reduced price).

Talked to my dealer (in DK), who told me, that at that price he would hardly earn anything.

I suppose the resellers have to buy a large charge of them to get the 'right' price.

By the way - my dealer said, that he would have done like me, if...

They have one in the shop for display, but only sell them on order (which did happen).

The S3 is in no way a 'cheap' product - I usually call it a little gem.

I bought it 'out of curiousity' - didn't really need it.

Great sound from that little thing - and nicely made.

It is now in the kitchen of my daughter, happily playing. 

Despite that she grew up in a 'B&O household', it is her first B&O product.

She likes it very much.

if I had room and needs for such a speaker, I wouldn't heasitate to buy it again.

I guess they made (and distribute) it this way in order to reach costumers, who never heard of B&O.

I am fine with that!

P.S. As an oldtime B&O costumer, I worry more about the lack of a small/smaller 'Join-speaker' (NL) with no own internal sources.

MM

There is a tv - and there is a BV.

BeoGreg
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BeoGreg replied on Sun, Apr 10 2016 10:19 AM
My B&O dealer (France) never sold S3 speakers.

Always thought it was strange but it seems then that he is not the only one.
Duels
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Duels replied on Sun, Apr 10 2016 11:10 AM
It's very odd. There didn't seem to be as much marketing effort around these speakers when they first came out. Also the promised additional colours never materialised. Never seen one in the flesh, in-store or anywhere else. Just not much effort it seems to me.

Perhaps they were actually conceived as a very cheap entry point into Play and the deep discounting is part of the strategy. It's one way to get the brand into the hands of people who wouldn't normally consider B&O.

Ultimately the play brand is selling well 18% up Q3 compared to last year so something is clearly working. I disagree with Paul W (albeit respect his opinion) that high margin products are necessarily a business evil.
AnalogPlanet
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In all honesty, high margin approach B&O can't execute on S3 obviously if they sell at 150 GBP on eBay now.

On the rest of Play product line maybe (partially), but it was frustrating for me to see that A6 went from 1000 EUR to 900 just one month after the sales started. Same for H8, H7 etc.

I was, of course, the impatient one to rush ahead as soon as it became available lol (but I don't regret as I like it very much).

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