Thats been a rumor for quite a while. When Guitar Hero and Rock Band blew up I read reports that it increased actual instrument sales by 30%-50% at some music stores. But that's waned since, and I just can't see BB going that route. They have sold instruments on their website for years though along with scooters, fitness equipment, garage accessories, CCTV, and multiple other things they don't have in most stores so ya never know.
I don't think they'll drop their car department anytime soon. They already run with a minimal staff and give it minimal space so it doesn't cost them a bunch to operate it. As long as people continue to go there just because they're Best Buy they'll always have some kind of customer stream.

 

I saw the writing on the wall a couple years ago, and made my exit. I've been into car audio since the late 80's, and here are some of the major things that have changed...

New cars have much better sound systems than they have in the past, and they keep getting better. Factory nav is quite common, and with just about every smart phone having quality navigation, aftermarket nav is going to suffer big time. Add to this the fact that vehicle profits are down, which is moving more dealers to do their own AV work, for the few areas that the factory can't service.

The internet. It has certainly leveled the playing field, especially in the area of price. Shops in higher income areas can't get away with some of the price gouging they used to. While it helped in some areas, it has hurt in others. Back in the day, you built a brand on reputation and following. Now, anybody can bring out an amp, or speakers, or whatever, put up a way cool website, and look like they know what they are doing. The web has also gone a long way toward educating the back yard installer...sometimes, this is a good thing, sometimes, not so much.

Price. Sort of goes with the above. Now that car audio is no longer a huge margin business, it just isn't as interesting, from a bottom line perspective. And with price driving everything, innovation has slowed, and quality has suffered.

And then there is the economy. Right now, lots of 'disposable income' businesses are suffering. As Matt and Luke have pointed out, this is not necessarily a bad thing. The shoddy guys will cease to exist, and the really good shops will hopefully survive. I still don't see a bright future for car audio, though, at least not like I knew it. I watched a lot of guys move to home audio / theater a few years back, and I'll bet that hasn't panned out like many had hoped, either.

Like I said, it was becoming a field I no longer wanted to play in. If I couldn't do it the way I wanted to, I'd rather not do it at all. I'm probably going to do some sort of super stealth system in my Harley, and I still get involved in some wiring issues up here, but other than that, I've pretty much stepped away from mobile audio.

I do admire you guys who are still trying to make a go of this, and wish you the best of luck.

oh yeah, BB up here is talking about carrying electric vehicles.

Toby

 

Good statements Toby.
This quoted part is the key to the current situation in car stereo, I think. Sure, stuff is cheap now. But a lot of it is junk. I wont throw any brand names out there because I dont want to offend anyone, but a lot of people are buying this cheap trash and getting burned when it blows up soon after. Then they're tired of wasting money so they go buy things other than car stereos, even though they really would like to have great tunes. One main culprit is the power wars BS. You've got companies all over advertising 1000, 1500, 1800, 2000 watt amps that in truth can't do 500 watts cleanly, but people are buying them because how do they know the difference? I have people all the time come in and ask for a 1500 watt amp, but don't like the price on a real one. The next time i see them they've got a 300 watt amp with a 1500 watt sticker on it and they're here to ask why it keeps cutting out or sounds so bad. Unfortunately they've spent their money on weak product with lies printed on the box and now they're stuck with it, which stinks for them and for the industry as a whole.

 

Since I was never in business doing this during those years and heydays, this is all I know. Post-internet 12 volt business. Makes it easier for us I believe because I have no past to rely on. Price shopping, and customer mis-education have been a part of this business since I started. So, it is part of everyday life-we know no other way!

And like Luke said, this business has come full circle. While most manus embraced the internet and turned their heads on the billion dollar business of transshipping, they finally have gotten bit by it so bad that they finally realized the profits that came from it were short lived. Now, every manu "claims" heavy internet policing and transshipping violations are something they are coming down hard and heavy on. The big boxes have finally failed miserably with car audio/video and left the manus standing there almost profitless. But here we are, the brick and mortar stores, still plugging along.

The manufacturers have begun to fully support our stores again-realizing the professionalism required to keep their brands alive and well regarded-thus leading to good sales numbers once again. It is bringing customers back into the stores-tired of being burnt by supposed great internet deals over and over again. Or, by purchasing the flea market and WalMart crap only to have it fail or underperform miserably.

I think personally, it is a really good time for the right companies to be in this arena. The good stores are most definately thriving and posting record sales numbers consistently. There is still allot of business out there-it is now just spread out over quite a few less retail outlets. Good for those of us left standing! Off rant...

 

The internet has made it tough for a lot of shops in every industry just because online prices are usually hard to beat and with people that can easily price shop and pull up the cheapest price, thats usually where they buy. Actual stores need something to set themselves apart from the online stores like the same items at good prices and custom/quality work. Simply having a shop that has the same items anyone can purchase online and put together IMO you wont make it.

 

Another big issue with the internet is sales tax, as out of state retailers aren't required to collect it, and I doubt anyone pays it voluntarily, even though it is the law*. This puts the local guy in a 7-11% hole, depending on the tax rate. And there often isn't much more than 7-11% margin available, if they try to match the internet pricing. Not all bad, if you can at least score the install, but many of these customers will either do it themselves, or 'have a friend who does this all the time'.

That brings us to the nightmare of installing stuff you didn't sell. Its big fun trying to get paid when you've spent 4 hours putting in crap gear, and big surprise, it doesn't work right.

Personally, I see a lot of value in dealing with local shops, particularly the independents, even if the price is a little higher. For one, they are there when you need them, either for after sales service, advice, or that Saturday morning parts run. And most of the smaller shops still know what they are doing, and still care. Not to mention, it keeps the money local, which helps us all, etc. Unfortunately, price is king with so many people, that the local guy loses out.

Even in the high end performance business, where I am now, we still battle the internet and 'globalization'. You still get guys wanting to save $400 on a $30k build by getting the latest super Chinese headers from ebay, and then wondering why they don't fit right, don't make power, and eventually crack.

Like I said, more power to you guys sticking this out. You can likely be successful, and make a 'living' at it, but I still question the total opportunity. I don't see much on the horizon that will grow the car audio / video aftermarket, so while you can pick up share, I don't see much organic growth.



*Florida sales tax is actually sales and use tax. So, even if you bought it out of state, if you use it in Florida, you owe tax on it. There is even a form on the department of revenue site, where you can voluntarily report these purchases, and pay the tax. I wonder if that form has ever been used? Seriously though, I wouldn't at all be surprised if this law gets some more teeth in it, especially as states grapple for revenue. Florida retailers are already required to report out of state sales, as a dollar amount. I could see the state making agreements with other states, saying 'we'll give you our data, if you give us yours', and then making retailers submit actual sales records.

 

I can tell ya this if we get taxes like NY state we will all be fucked lol I'll be making like $5 an hour after tax.

 

You are aware the average income New York is much higher than ours, right?

 

That sux that Devine Sound closed. I still need them to check my system out cuz after they installed an aftermarket unit, my amp keeps going into protect if the bass is too high.

Now I have to go to another shop to have it check.

 

Also keep in mind Florida people are spoiled by no state income tax. Our state gets its operating money from tourism taxes, so basically people from other states are helping pay our way. In most states there is a state income tax that is also deducted from your pay each check like your federal taxes.

The sales tax thing is big. It does put anyone local at a disadvantage, but states are losing so much money that it's not going to last like this for long. They're going to come up with a fix for it, I have no doubt. And for some reason I still get customers who think that extra 7% I'm lawfully required to charge goes in my pocket. I suppose it does for a few days or weeks.....then i pay it all to the state.