Regional Dealers Provide State of the Industry
Bright spots include tablet sales, high-end housing starts, wireless speakersDecember 4, 2013 By Nancy Klosek
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.