Samsung and Sony Enact New Unilateral TV Pricing
Policies could help independents compete against e-tailers and big boxesFebruary 26, 2012 By Jeff O'Heir
Independent CE retailers and buying group directors hailed new unilateral pricing policies (UPP) by Samsung and Sony as a positive step in leveling the playing field against online retailers and big-box stores. The move, some said, could increase profits on certain TVs to 30 percent.
"This will help to bring some sanity and stability to pricing," said Jim Ristow, executive vice president of Home Entertainment Source, during the opening reception for the HES and Brandsource 2012 Summit this week in Orlando, Fla.
Samsung and Sony, which recently announced the changes to its dealer base, will impose UPP on the higher-end models of specified TV lines and some of Sony's high-end projectors. The policies essentially set fixed prices of certain products, mainly TVs, across all consumer sales channels, including e-tailers and big-box retailers. Independent dealers said similar policies by Bose and Epson have stabilized prices and help them to compete more effectively.
"I have to applaud Samsung and Sony; they're both courageous for doing it," said Tom Priola, owner of Primetime Audio/Video in Rockford, Ill. "The policy will help stop price erosion and allow us to start making some margin on TVs."
Executives from the TV manufacturers could not be reached for comment last night. One source said margins on the TVs will range according to their model series. He said margins on the new line of Samsung TVs, for example, will run between 15 and 28 percent, while another dealer said margin on a higher-end Sony set could hit 30 percent.
"If the policy increases margins, than it's a tremendous benefit," said Vance Pflanz, CEO of Pflanz Electronics, Sioux City, Iowa. "What always happens in this industry is price and margin erosion, and I don't think this industry can stand any more of it."
Unilateral pricing on Samsung TVs will start with the release of each new 2012 series, the first of which is expected to hit the streets in April or May, sources said. Sony's 2011 XBR series will have unilateral pricing beginning March 1, while new Sony models will also carry UP as they're released this spring, sources said.
"I like it. Now the question is whether they'll be supportive of it," said Bjorn Dybdahl of Bjorn's Audio Video in San Antonio, Texas, about UPP, echoing independent retailers' general suspicion of any promise made by TV manufacturers. "If it's not all about pricing (to the consumer), then we'll have a better shot at winning the sale."