Baumeister Goes Out of Business After 19 Years

There is much more to this story. You dont just up and out, know that I mean? Some serious unknown issues must lay beneath. Typically its family and greed.

Yeah, it all started when The Burgermeister banned all the toys in Sombertown. All the kids had to hide them from him in their stockings. That is why we still hang them over the fireplace today.

I think we have all seen the show and what happens in the end.

This is a sad story for not only the company but all of their employees.  Whatever happens we wish them the best and a speedy recovery!

I would be curious to learn if Baumeister customers were somehow insulated from the demise. Can some other authorized dealer come in and take over their installed systems? Thanks and best wishes.

I’m a former customer and the information flow has been awful.  I haven’t been able to get my code as of yet and I have no idea if they will ever give it.  Without it I’ve been told that another dealer would have to reprogram the entire system.

They really gave the big f* u to customers here.

I think that RANGER HOME, the very first poster in this topic hit the nail right on the head!!

Seems like a singular focus on high end custom projects with an incredibly high cost of development and incredibly long lead time, may have been a contributor. The I only do High End Custom business model takes another integrator down.

Hopefully a more agile dealer that understands diversity and cash flow will fill the void.

SO MUCH MORE to this story. To have been posting that kind of sales and should have been posting strong profits if run with any intelligence only to have this happen is a big F’U to the clients and employees. Owning and running a business brings on a large responsibility and to have this happen makes it look like there must have been some real GREED going on. To have over $6M in sales to just shut down is either GREED or POOR MANAGEMENT. You pick it. But hey don’t worry this industry loves failed business managers. The leaders who ran this will be hired by the manufacturers in no time…...how sad and especially for the employee’s.

There have been several success stories in the high-end-only business, but as they say ... you’re only one job away from bankrupcy. Risky business these days.

I agree with Julie, but the point that is missing in this whole discussion is: In order to be successful in the high end you have to completely, over the top, satisfy all your clients. I know you have to be profitable, and many other factors, but everything stems from client satisfaction. If clients are not satisfied they don’t pay their bills, and if the clients don’t pay the company folds. If clients are not satisfied you don’t get referrals and on and on. My speculation is this all came about because of a lack of client satisfaction.

RIGHT ON RC!

I personally own a high end custom installation business and we just celebrated our 20th anniversary. Not only have our sales increased every single year, we do not advertise in any medium nor do we have a website. We are REFERRAL ONLY-

If you don’t take care of your clients, they will go elsewhere. I love watching the egotistical idiots boast about their sales figures in every dealer magazine and internet forum for years and one day “POOF” they’re gone.

A real company is one that stays under the radar waiting to take the spoils of the so-called “warriors.”

There are a lot of lessons to be learned from this and every failed business. Being one dimensional in anything in this industry is like playing Russian Roulette.

If you only do High-end custom or only do entry-mid level installs and the well runs dry….

Running a company with only large installations is twice as difficult because of the uneven demands on installation labor and cash flow.  You need a highly trained staff to support these types of jobs but keeping these highly paid employees billable is tough when the work is tied to large jobs is frequently delayed.

Doing only new construction fails when housing stops.

Focusing all of your marketing on one tactic is dangerous even if it is referrals. I don’t criticize companies that do quality work and then make the effort to get recognized because PR is just one tool in marketing.  It also creates a sense of pride in your employees and helps you attract talent.

I feel sorry for the dedicated employees who worked the long hours, went to training, and took pride in their work enabling their company to win awards and recognition…only to lose their jobs. I feel sorry for their customers who undoubtedly lost some of their investment when as we know, 95% of us are paid in excess of what we have actually earned. I feel sorry for the companies who still do business in Chicago who may be treated with suspicion caused by someone else’s mistakes.

Michaelapope,
I completely agree with 90% of your well written and intelligent commentary.

However, businesses in Chicago are not the only ones who are treated with suspicion caused by someone else’s mistakes. This problem is nationwide due to the numerous “trunk slammers” and uninformed salespeople, (typically big box store order takers), who consistantly rip off trusting consumers.

Yet, the consumer should also be held accountable for seeking out these people just to get a better deal. We must also put some blame on magazines such as Consumer Reports, (who should stick to evaluating food processors), and some high end magazine writers that will give any company/product a great review providing they are allowed to keep the review sample.

Unfortunately, it also becomes more difficult to educate consumers when they are also bombarded with clever and extremely effective marketing tactics from companies such as Bose & B&O;. We in the business all know that it’s over priced crap, but when Paul Harvey, (is he still alive?), says his “Wave Radio” gives him concert sound, what is a consumer to believe?

Lastly, (maybe it’s my circle of friends in the business), I truly believe that we are NOT paid in excess from what we’ve actually earned. My staff and my distributors work many long hours to satisfy very demanding customers 7 days a week. Hopefully, we all fall into your 5% range of grace.

Dave,
Just to clarify my comment on paid in excess of what we have earned, I meant the fact that we collect customer deposits in advance of earning the revenue.  I certainly agree that my company earns every dollar and then some on our projects. The problem in collecting these deposits is the fact that it is too easy to spend one customer’s deposit money on the completion of another customer’s system. This will work until you stop making sales and are no longer collecting deposits….

As far as the manufacturer/distributor issues, we are having some discussions on LinkedIn on the CEDIA Group that you are welcome to contribute to. Follow this link: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=36745&discussionID=1404230&goback;=.anh_36745

michaelapope,
Peronally, every one of my clients’ deposits literally goes into an escrow account specifically for them. I know that most dealers will use or wait for other people’s money to cover their expenses including using collected sales tax. What you have described is nothing more than a Ponzie Scheme. Having personally turned down Bernie Madoff 9 years ago because I wouldn’t agree to his terms, it is a dealers fault for not setting the stage from day one.

I have no empathy for any dealer that lets a client control the sale or that does not ask for enough money up front to cover all expenses for that specific job within the inital deposit. My terms are 80, 10, and 10. It is also our policy to pay all vendors within 48 hours of invoice so we don’t fall victim to what you have described. I have absolutely no sympathy for owners who bleed their companies dry with unecessary spending and complete and stupid mismanagement.

In my opinion, let all of these people go bankrupt to teach them that they must live within their means and keep their egos in check. I seriously doubt the new Messiah Obama will ever bail out our businesses when the phone stops ringing…

i am a former customer and had some items being repaired by them and have not seen nor heard from these guys.
unfortunately or not, having my equiptment is now a police matter.  i feel bad for the guys/gals who worked there as they were good, but all numbers are disconnected, no email, no cell phones.
another black eye tot he industry

In response to Dave Steven’s comments about Bose, B&O;, big box store order takers.  I find your comments condescending. America is a country of Free Enterprise.  Meaning let the better man win. They have excellent marketing programs that work well and have for ages.  That does not mean that their products are the best on earth.  Also, if their products are not to their customer’s satisfaction it would have killed them off long ago.  Love them or hate them they have a system that works like a charm and that is what it takes.  I just find these off the cuff comments from custom folks very short sighted.  They like you have a place in the industry.  If you are doing your job right then they do not matter.  I worked in the CE industry for over 10 years and found that it was not that hard to educate a customer if those products were the right fit for them or not. I am not a fan of either Bose or B&O;.  Never owned their products and never will.  Most custom clients are educated enough to be able to easily see\hear that these products are not for them.

Kilroy,
I have 31 years in this business, and for a 10 year period I was the only business in the US that offered both Bose & Thiel under the same roof. Why? It takes 2 minutes to sell a Bose product when a customer came in looking for it vs. taking a half hour to educate a client to spend more money on a pair of Thiels.

We are all in the business to make money as efficiently as possible, and any audio system only has to please the listener. Hopefully we get to educate people along the way.

Maybe the only reason you only stayed in this business for 10 years is because you got sick and tired of trying to do the right thing.

Regarding both companies having excellent marketing programs, so did the Germans in 1944.
It doesn’t make it right.

By the way, I have enjoyed your other posts…

Dave, Personally I do not care for Bose.  To me they are more of an marketing company then an audio company.  For years I hated them since it seemed that they took advantage of the customer.  But I came to a conclusion that they like all the rest of the mfgs. have a place. With audio, beauty is in the eye or ear if you will of the beholder. I felt that sometimes our willingness to “educate” the customer sometimes got in the way of things. Your comparison of Bose’s marketing to the Nazis is interesting but I think a bit much. BTW, I didn’t leave the business because of getting sick of trying to do the right thing.  It was for health reasons I had to stop working. If not for that I would still be in the business.  Thanks for the comment about my other posts.

Kilroy,
First off, sorry to hear about your illness and it’s a shame that this industry has lost an intelligent person like yourself.

As a professional comedy writer for many years, my writing style is designed to always go over the top to make a point. It will either make a person laugh, or make a person angry. The point is that it will be remembered in either case.

I used ####’s as an example because I have personally visited the Bose factory when they sent an open invitation to its dealers in 1992-1993, (I can’t remember the exact date).

In any case Bose higher ups were like the SS to its visitors. I specifically remember orders were given that no photos were allowed to be taken inside the facility. I had no problem with that and understood.

However, a group of us had our photo taken outside of the Framingham building with the huge Blue Bose logo in the background. When we all got back on the bus to go back to our hotels, 2, (for lack of better words), storm troopers would not let the bus leave. Then these 2 idiots got on the bus, removed the person who took the photos, and confiscated his camera and all film he had in his possession.

Inside the facility, it seemed almost “cult-like.” The Bose logo was on every phone, every thermostat, every pen, every room, etc. I was suprised the Bose logo was not grilled into the hamburger I had in their cafeteria which also displayed every product the company had ever manufactured. Brainwashing at its best.
The robotic manufacturing on their asssembly line
was far beyond anything I’ve ever seen in those days… very impressive.

As the tour went on, we visited the wire room… I have never seen so many different colors of 22 and 28 gage wire lined up on racks. Next, we visited the “blind listening” test room. These idiots had a pair of B&W;801’s under a sheet and were comparing them to an Acoustimass 5 system. They tried to convince us the AM-5’s were far superior.

Then we were off to the “bunker” which is a large room with about 100 drivers playing 20hz at full volume. To enter the room, we had to put on their noise cancellation headphones so as not to suffer long term hearing loss. Even though the room had concrete walls, you could feel the floor rumbling under your feet in the hallway and smell the ferro fluid cooking up a storm.

I’m sure your bored by now of my inside tour, but what amazes me to this day that they still use only 4 different cheap paper drivers in almost everything they build… just different configurations and more drivers in a cabinet to create different model numbers.

It also pisses me off that Bose is blatantly price fixed. Their dealer agreement is called a “Unilateral Price Policy” but it is price fixing. I dare anyone to show me an advertisement from any dealer who does not have an “*” next to a Bose product when they announce a 10-20% off of all speakers… *Except Bose” is always in the fine print.

Summing up, at the very end of the tour Amar himself parted the waters and took Q&A;from about 500 people. When I rasied my hand, I asked, “With all of the technology you have at your finger tips and all of the people who work so hard, why can’t you make a speaker that sounds good and why do you price fix your product line?” I was immediately escorted from the building as half of the audience began applauding to the question posed. I was happy to leave early, and was joined by another 3 dozen people who got up and left with me.

Kilroy, I’m very passionate about my business and will do my best to expose crap. Their are too many smaller companies that make great products and don’t stand a chance against these corporate giants. It is nice to know that Bose has lost a huge market share over the years and most of their business now comes from old ladies buying Wave Radios.

If you’d like to speak to me personally, contact Julie Jacobson and she will give you my e-mail address. I don’t feel it’s fair to take up CE Pro’s posts for personal communications as I just did.