When someone buys one of my $899 headphone amps, they expect and deserve to receive a new product. Not a demo model or a used product. So I cannot sell a returned amp and claim it’s new. I’m an honest man and run my business accordingly.
The cost of new packaging is pretty small (about $10-15). But that still brings the product to “demo” or “reconditioned” not to “new”. If the chassis has been scratched, the relevant bits will need to be replaced. Those bits cost money. They take time to replace. Time = money. The amp will need to be tested. This requires calibrated equipment (= money) and the time of a skilled operator (= money). There’s also an opportunity cost. I could be doing something to grow my business during the time it takes for me to recondition a product. And after all that, I still have to sell the amp as “factory reconditioned” for a lower price, which means I lose money. That’s why I charge a 15% restocking fee.
You can certainly claim that “returns are just the cost of doing business”. That’s a completely valid approach. And, in fact, if you read my original response to you, you will find that I did consider that approach.
To reiterate: Any “cost of doing business” will need to be rolled into the price of the products. Money does not grow on trees - at least not at the latitude I’m at. There is no free lunch. I think it’s pretty reasonable that those who return their products get to pay the costs associated with those returns. I do not think it is reasonable to wipe that cost off on those who keep their amps.
I make more measurements and detailed specs available than anyone in the industry, so you know exactly what you’re getting. If you prefer the sound of a tube amp, you will likely find the HPA-1 to sound too revealing. If, on the other hand, you prefer the amp to add as little as possible to the sound, you’ll likely enjoy the HPA-1.
“Costco takes returns and operate on 10% margin”. Good for them. They also move significant volume of consumable goods. I don’t. People don’t “use up” their headphone amps and have to buy new ones every week. They don’t panic-buy and stock up on headphone amps in a pandemic, just in case they run out. Different business model, different market, different margin.
You may also have noticed that Costco’s return policy on electronics is considerably shorter than it used to be. Some figured out that they could return their 1.99 year-old TV “no questions asked” and buy a new TV with the latest features. Who do you think paid for those returns? Clearly, Costco decided that serial returners drove up costs and they put a stop to it.
Comparing with shoes? Really?! A pair of shoes costs a few bucks to make. In that market, what you’re paying for is the distribution cost. A high-end headphone amp, such as mine, costs hundreds of dollars to make. Would you care to elaborate on how you find that comparison even remotely reasonable?
I see returns as a short-term rental. I consider $135 to be a very reasonable rental fee for a two-week rental of a high-end headphone amp.
Audio Precision charges $5k for a short-term rental of one of their $30k audio analyzers, so really… $135 is pretty small potatoes.
You may see things differently. That’s fine. If you believe I’m engaging in price gouging or that my return fees are too extreme, just shop elsewhere. Or - better yet - start your own business and compete with me.
Or you can arrange a loaner tour for the HPA-1. Let’s say you get ten people together in a loaner tour. Have everybody pitch in $50 + shipping. Offer that one of the ten will get to buy the amp for $500 at the end of the tour, and you get to make a cool $100 for your trouble.
Alternatively, you can meet me and listen to the HPA-1 in person at the next audio show. I was planning to attend RMAF and CanJam/Chicago this year, but they’ve both been cancelled. It looks like CanJam will be in June next year. There might be a show in Seattle around then as well. I could do the Florida show again (in February).
Tom