Kgerry,
That situation DOES suck. If you spend that much time with a customer it is unfortunate that they are drawn away by the big vendor. However, I don't think this phenomenon is unique to the car stereo industry. Economies of scale say the large retailer will always be able to beat the smaller vendor on price.
Because you'll get beaten on price, you say you need to sell service. Unfortunately, for small businesses like yourself, I feel that the need for you to take on more of a service role will be a continuing trend. With the rising popularity of internet commerce and large retailers, small local retailers no longer have local monopolies over the product lines they sell. Small retailers are competing with the volume sellers like never before. Before the rise of these volume sellers you used to compete because there were fewer suitable replacements for consumers in your region. In a region of 100,000 people there might have been a handful of other stores sold that similar products. Small retailers could differentiate based on the brands they sold. Since this is no longer the case, small retailers simply must find another way to differentiate. Small retailers also used to have a corner on information. With the internet, consumers can take up information faster than ever. Service is a start, it is difficult for even large retailers to sell quality service in volume and impossible for internet retailers to offer the same service.
For consumers, the situation has never looked better. Small retailers are still around offering knowledge and service, large retailers are offering volume wholesale style pricing. We, as consumers, currently get the best of both worlds. Price and knowledge!
I suggest that this won't last. Small business close and the large retailers will continue to grow - for a time. I then believe that small business will adapt as it has hundreds of times throughout history. They will focus on carrying unique items the large stores cannot sell. They will adopt flexible inventory control and ordering methods. They will train their employees like the large stores cannot. They will offer smart advice. They will offer financing packages. They will offer more combination deals. They will start customizing products. They will stop playing games with the prices of products. They need to wake up and realize that negotiating on price simply doesn't work when they can neither compete on price nor differentiate their product. What leverage do they have? Do they expect to leverage the fact that people feel badly for wasting their time?
Those retailers that are unable to adopt, unfortunately, will be out of business. We cannot fault the consumer for this. Fault the distributers for not offering flexible inventory control devices to small business. Fault the large retailers to the extent they are abusing their positions. Hell, fault economics. However, I stress again that we cannot fault the consumer.
$1000 of my system would have cost $1800 had I bought it retail. Add tax to that retail cost and I paid nearly half of retail. I saved nearly $1000. Even if the salesperson would have spend 2 hours with me I sure as sh*t am not going to pay an extra $500 an hour for some guy to tell me what I can learn in 20 minutes on the manufacturers web-site.
For the owners and employees of small businesses the situation does suck. I summarize to say that it is unfair to blame the mentality of the mass consuming public for walking out - even after they demo product for 45 minutes.
* Yeah, I didn't mean for this to turn into such a long post, but I've been studying some of these economic topics in my antitrust policy course and talking about the topics in the context of car audio is more fun than studying it straight up. :-)
New Project: 2003 Pathfinder