AL & ED’s Asks 12V Retailers Petition Suppliers
June 15, 2010 by Amy Gilroy
Filed under Car 1
Al & Ed’s Autosound is calling on car electronics specialists to petition their suppliers to stop authorizing online discounters who sell below MAP (Minimum Advertised Price).
“Once they sign them up it will be too late,” says Al & Ed’s product manager John Haynes. He claims it is unfair to sign on such retailers after they have spent years undercutting the business of authorized retailers by selling below standard prices (and when an authorized dealer tries to do the same he is fined by the supplier).
Separately, Clarion reported today that it implemented a more aggressive policy against unauthorized resellers and transshippers. (see below)
President of Al & Ed’s Gabi Mashal says. “Two years ago on Christmas we were penalized by Pioneer, probably $20,000 because one of our items was discounted by mistake on our website.” But an unauthorized discounter selling at the same price may not be penalized.
The rub is that now that times are tough, suppliers are actively engaging in talks with the same online discounters they have tried to prevent from selling their products over the past ten years.
“I want all of the other buyers and retail store owners to understand that with many of the vendor partners, these discussions are already happening. If you feel that this is damaging to the industry and your business you should immediately place a phone call or email and let your regional managers know how you feel. We really feel this is so potentially damaging, we’re up in arms about it…Once they sign up it will be too late,” added Haynes.
“Manufacturers are reaching out to [dealers] who were considered the enemies of the industry. Now, they’re considered legitimate because they are selling $20 million a year, but suppliers are forgetting that the $20 million was built on discounting at lower prices than the rest of us,” said Mashal. He claims that when JL Audio and Focal recently took action to stop unauthorized discounting that Al & Ed’s saw a rise in sales.
One discounter, Sonic Electronics, Valencia, CA claims sales of $30 million a year, mostly in car electronics. Sonic is attempting to add installation bays and become an authorized reseller with more leading brands. The retailer presents its side of the story in a complex industry problem here. It has told CEoutlook it would like to add more comments on this issue and CEoutlook remains open to publishing them.
CEoutlook has also attempted to contact a half dozen other online sellers such as Woofersetc.com and OnlineCarStereo.com.
Regarding the transshipping issue, Clarion said, “In recent months the company has been tasked with some serious business decisions and has discontinued business with repeat offenders in both its direct dealer network and its regional distributors,” according to president Tom Hayashi adding, “This industry cannot continue to allow this practice to happen.”
Source: CEoutlook
UPDATE. Some of the comments on this story have been removed because they were personal in nature and we received several complaints.
And MERA in owned by Installnet, trying to put $$’s in the internet retailers pockets and 1/2 the labor in the independents.
Wanna know why customers go to the net? It’s not always about price! Look at your stores, most are dirty and ugly. Most employees are too busy playing on the internet or their phones to actually learn anything about the products they sell. Look at your inventory, you cherry pick the lines because you want to clerk the easy stuff not actually sell anything. Do you actually advertise to the youth in a way they understand or do you just yell “1000 watts amp $99!” Most independents act like the internet. In the words of Eddy Kay “With all things equal, I’ll shop at the lowest price”
Guys you have to stop using the word “ALL” un-true and misleading to other dealers. Not all Manufacturers look the other way. YES there are some of these things happening but we have to figure out how to get past it. We can gripe all we want but what have we done to really try to gain that customer that found that part online for 50.00 less…..
Remember not every customer wants the cheapest thing on the market. You can’t fall up the ladder with a customer. i truly believe the answer is in building a relationship with that customer and selling your service. the internet cant install it for them. the internet cant troubleshoot it either. Fact of the matter we need to stop clerking and start selling
Listen guys i have been involved in the car and home audio industry for over 22 years and know the ins and outs of how it all works. As a previous car audio retail shop owner to a current rep of many major car audio brands i have seen it all over the years. The problem starts and ends with the manufactures and that is the simple and sad truth to this issue. The manufacturers tell you they are anti transshipping and are doing everything they can to stop it but what you do not know is they are giving the green light to these guys to move product under the radar.
Lets take Kicker and MTX for example, they authorized Sonicelectronix for internet sales as an authorized kicker and MTX online retailer. One of the major regulations of being an online dealer is to adhere to MAP or MSRP pricing as the manufacturer requests. Well Sonic has come up with a clever way to go around the MAP pricing required by Kicker and MTX, they have items listed online at MAP pricing with a “make an offer” button next to the item. The customer can then offer what they have or wish. Sonic can then take the offer or make a counter offer and sell the product points above dealer cost and plenty below the MAP that was listed.
Kicker and MTX both know very well that Sonic is participating in this unethical practice and have both had dealer complaints from all over the country regarding this mattern but yet they refuse to do anything about it. Simply put Sonic has been given the green light by Kicker and MTX to undercut every single authorized dealer in this country because they simply have the power and means to move quantity for them and pay them on time.
To verify this fact just visit the Sonic site and you can view the make an offer button on Kicker and MTX products. Now Kicker and MTX will tell you that they had no idea about this practice but the truth of the matter is simple, they have known all along but will allow it because they like the numbers it produces.
Another example is Alpine, they have a zero tolerance policy for transshipping and authorized dealers selling below MAP pricing. Yea right!!
Gabi Mashal’s Alpine products have been found all over the electronics district in 11th st. Los Angeles to Canal st wholesalers in New York. Gabi’s Alpine has been traced to dozens of ebay sellers selling just above cost for years but why does Alpine allow this? Again it goes back to the fact that these guys move volume like no other dealer can even come close to and they pay on time.
Next example of how Alpine had decided to look the other way and allow another authorized online retailer move product for them. Not to long ago Alpine authorized Pacificstereo.com as online Alpine dealer, not long after Pacificstereo listed the entire line of Alpine products far below MAP pricing, when complaints started rolling in from every corner of this country Alpine requested they take the prices to MAP. Pacific Stereo then decided they would match the lowest price the consumer could find online for any Alpine product, as a matter of fact they took it to the next level and even show you the lowest price online from an unauthorized Alpine seller and offer to match it. Below i have linked an Alpine product listed at MAP then you will notice the price they have listed from an unauthorized source and the offer to match it.
http://www.pacificstereo.com/alpine-cda-9886m.html#pricematch
Bottom line folks is that the problem is with the manufacturers, they want to move product and these are the ways they do it.
Jeff – I couldn’t agree with you more…. Maybe if some of these other complainers would just close up their business’s -instead of waiting for the 80′s to come back – Realists like us could help revive the Fun, Personable, and Knowlegable experience that only a specalist can provide.
Politicians these people are… the ones that petition to make the laws are the ones who break them.
OF COURSE no one is going to admit to trans-shipping products and for the grey market with one eye open. And – that one eye open is only there to count the money as it comes in.
OF COURSE manufacturers aren’t going to reject hundreds of thousands of dollars of orders especially in this economy because they know that somoene might be transhipping.
OF COURSE no one will admit to screwing the small mom and pop brick and mortar shops that run legitimate business practices to stay in business.
OF COURSE who would spend almost double the price at certain places to buy the same exact product if someone else sells it for cheaper?
Let’s face it the line that separated the Swapmeets from the legitimate Business has been gone for a long time. But who is to blame? We are all in it because of the bottom line. We can’t point fingers when everyone has something to do with it.
Any problem with the dilution of profit, identity and predictability that comes from the “transshipping” and “discounting” issue lies squarely at the feet of the manufacturer.
We all have serial numbers on our products. We all record those serial numbers on the invoices that we send to retailers and distributors. We all therefore have the ability to know to whom we sold a specific serial number or a group of serial numbers. Therefore; when a serial number turns up in an “unauthorized” place we have the ability to know where the “leak” is.
Blaming retailers, reps, distributors or supply & demand for this condition is like blaming the can of spray paint for grafitti when we all know it was the tagger who did the deed.
While I do not defend the practice just because the manufacturer “winked and provided significant discount” when taking an order from a retailer that is ten times the retailer’s annual front door capacity, that is where the control or lack thereof, resides. I assure all who read this note that better than 90% of all transshipped goods are transshipped with the FULL KNOWLEDGE of the manufacturer. There. Now it has been said.
I believe the solution is fairly obvious… If you patronize a restaurant and you know that the owner of the restaurant is going to use the proceeds of your patronage to buy poison and then put that poison in your next meal at that restaurant… Would you eat it?
Ray Windsor
President
German Maestro
The mobile electronics industry needs to wake up and realize that no one can control the internet and online merchants selling products. No matter how hard the industry tries to control it, it’s all about the law of supply and demand. There is HUGE demand for electronics online and because of that there will be someone there to fill it and sell products to the people. I realized that years ago and decided if I wanted to stay in this industry that I am passionate about than I needed to get my feet wet and join in the online merchant business. Many people in the business hate the fact I sell online, but you know what? I’m still in business and thriving while others who complained and didn’t make a change are gone. The days of huge car audio package sales and big ticket item sales with huge margin are gone. You can thank a number of things for that, online sales being one of them, but changing industry practises and offshore manufacturing that reduced both quality and product costs most likley played and continue to play a MUCH larger role. Its time to wake everyone up and stop bitching about this fact and put your head into things that will make you money, like using skills and knowledge that you gain working on very complex current vehicles and putting them to use on other areas and other niches that need to be filled within our industry. We live in very exciting times, technology that we could have never dreamed of only 10 years ago is now common place and guess what, this technology is being integrated into vehicles at such a cutting edge pace that this industry has the capability to make huge amounts of dough! Just look at the majour software and computer companies like Microsoft and Apple, they are all looking at the automotive market with huge grins and salivating at the profit potentials of connecting people to technology in the mobile environment. I’m ranting now, but the point of my comment is this: Online electronics sales will continue to steal the thunder from bricks and mortar stores and there isn’t a thing that can be done about that fact. Wake up to that and use your heads to think outside the box to service the needs of your customers, stay cutting edge and guess what? Your phones will ring off the hook and your inbox will be full of customers wanting your services!
Looks like some whining caused a can of worms to be opened up here.
RE: AL & ED’s Asks 12V Retailers Petition Suppliers.
I Agree with all that is said here. We try to only sell products that Do Not sell on the internet. We only sell Memphis Car Audio for amps, subs, speakers and wire. Also we sell Clarion for head units. We stay with the 2 companies just because they protect us against internet sales. Now some how Woofers Ect still gets Memphis by the way of trans shipping. Trans Shipping is against the policy of Memphis. We have shut down 1 dealer in 5 years that trans shipped to Woofers Ect. They still seem to get the new product trans shipped from another dealer. The dealer that sells to Woofers Ect. is taking sales from all the other dealers across the states. I contacted Woofers Etc myself. They were rude and very blunt about this issue. They Dont Care. The BBB should also look into this and take some kind of action. I also think the goverment should step in and fine companies like Woofers Etc for trans shipping. The facts are that the small businesses are what keep this country going. I think that internet sales are what can hurt a company like Memphis. If a company sells online to a customer that dosent have the know how to hook the product up correctly, they could burn up the unit or even worse burn their car down with people in it. The customer sends back the item he fried and it is returned to the seller and the seller has to replace it. There are many reasons that the economy has spiraled downward, and these types of companies and the people who allow them to cut down small business are to blame for part of it.
I think it will be impossible to shut down unauthorized vendors. i think manufactiurers will look the other way to these unauthorized on line sellers instead of making a deal with them. if they make a deal then it will just piss off the authorized seller. Maybe manufacturers should sell there own products on line on thier own website and maintain a margin that doesnt hurt the retailers and the retailers can adopt a drop ship program with the manufacturer. or maybe on the scifi side create an encryption process that does not allow the product to work unlees it is “unlocked” by an authorized dealer, and the unlocking proces is the only thing that will legitimately register the product for warranty.
For years dealers have had to toe the line with manufacturers that presented us with horrible programs and worsse order fill but the internet discounters always seemed to be well stocked. I have complained for ten years but no one really cared and still don’t. I havent seen a rep all year and if I did he wouldn’t know anything anyway except you should buy this program no matter how tough times are.\
In short, after thirty years I have had enough and am selling the business to some youngeer guys who maybe have more patience than I do. Good luck to all
Mark Dixon
Southern Sound and Cinema
In an industry that eats its young, the battle rages on. I firmly believe that the “big manufacturers” will not give up the sheer numbers afforded by the internet, big box, and trans-shippers. There are a few exceptions, but I wonder how long before they too must succumb to the need for numbers. The specialist will survive on smaller specialty brands that can focus on the needs of independents, and protect profit margins. The specialist will survive by providing a level of service and expertise not available elsewhere. The specialist will survive by better making the consumer understand what we do, and how it can enrich the driving experience.
I have fought the fight with the manufacturers for many years, as have others. It is a cold reality that we will not control their business model. But we can decide whether or not we will support it, or them.
i think its all lie!!!!!
I am shocked, shocked to learn that transshipping to unauthorized dealers is happening and that brands are doing nothing to stop the process rather, they are seem to foster it…
Ray Windsor
President
German Maestro