Regional Dealers Provide State of the Industry

“In the independent channel, it’s about our ability to help consumers understand the differences in wireless audio, from Bluetooth to Wi-Fi, to content provision from the variety of sources in the home and to some degree, having multi-room audio involved with wireless technologies.”- Andy Kersey  

“No one understands what 4K is, even if you try to explain it. It isn’t easy to do.” Ed Robinette, electronics merchandising manager, Morris Home Furnishings, Fairborn, Ohio

“The upper end (of the market) is hot, and getting hotter. Our installation staffing this year versus last year is up 35 percent to be able to handle it.” Alan Guyes, principal, Audiotronics, Roanoke, Va.  

“A lot of accessories are doing very well, because they’re MAP so you’ve got the bigger margins there.” Albert Liniado, president, Datavision, New York, N.Y.  

Bright spots include tablet sales, high-end housing starts, wireless speakers

Regional CE dealers are having a tougher time than ever in predicting the future. They expect rapid price drops of 4K UHD TVs during the holiday season and they’re pushing audio and other profitable peripherals to bolster whatever margins they can. But factors such as uneasy consumer sentiment and the rocky rollout of the healthcare law make it harder for them to predict the early months of 2014. Some bright spots that will carry into next year include record tablet sales and the high-margin accessories that accompany them, as well as an uptick in upscale housing starts, which is boosting their integration businesses. Here are their views on the categories or singular products that are delivering better-than-average-margins for you? Stay tune to Dealerscope.com for more.

Albert Liniado, president, Datavision, New York, N.Y.: If you ask me about tablets, I’d say yes, you’re going to sell about a million tablets this holiday. But on a $5,000 TV, people aren’t running to jump on them, that’s for sure. As for other categories, tablets’ margins are okay, not great but do-able, and they’re lightweight so it’s not like you’re paying a fortune in shipping.

A lot of accessories are doing very well, because they’re MAP so you’ve got the bigger margins there. Of course, Apple is still huge, so anything to do with Lightning cables or anything to do with Samsung’s Galaxy. All those are doing well, and a lot of the companies are MAP, so you’re making 20 or 30 points, which at the end of the day helps you out. I think it will be even stronger next year because more of the companies are moving to MAP.

Alan Guyes, principal, Audiotronics, Roanoke, Va.: A margin is important, but you can’t put margin in the bank. I get a little less excited about margin than I do about how many of these can I sell versus margin that I will obtain on that product. Look, for example, at Sonos. The big knock to those guys is ‘no margin.’ It’s not as high a margin as other products, but if you’d have told me five years ago what kind of volume I’d be doing with those guys this year I’d have looked at you like you were from Mars. Although the individual margin dollars per item have diminished over more conventional electronics brands, I can’t complain.

Ed Robinette, electronics merchandising manager, Morris Home Furnishings, Fairborn, Ohio: The higher-end 1080p TVs are still doing well.We’ve had extremely good luck with F7100 and F8000 Samsung higher-end models this year in the 60- and 65-inch sizes. I think that that category helps you with margins; at least you’re not down in single digits; you get up into the 20 to 30 percent margin area. Ofcourse, then you have accessories and mounts and audio, where you have to go to try to make some margin. As far as the larger volume of our sales and the higher ASP, that’s got to come from the TVs. Samsung sales are way up; they have a super-bright, beautiful picture, but also have a lot of features that people like, (such as) voice command.

Andy Kersey, vice president/operations manager, Hamlin & Kersey Home Center and A/V Systems, Corbin, Ky.: Wireless audio is expanding tremendously. In the independent channel, it’s about our ability to help consumers understand the differences in wireless audio from Bluetooth to Wi-Fi to content provision from the variety of sources in the home, and having multi-room audio involved with wireless technologies. We set up a complete wireless display, and we use $49 wireless speakers so that we can show them to the consumer and say, ‘Here’s what Bluetooth is, and here’s are the limitations.” And then we can show them what happens when Sonos and the Bose Wi-Fi speakers are introduced, where you’re stepping up the level of quality in the audio. The consumer confusion is addressed. That’s the part we feel that we do better than others, and I’d like to think the independent channel as a whole does that.

Related story: Best Buy Starts Pushing 4K This Weekend

Editor in chief of Dealerscope
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