Samsung and Sony Enact New Unilateral TV Pricing

Policies could help independents compete against e-tailers and big boxes

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.

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Comments
  • Jim Young

    Smart move if this truly happens and works we know which TVs will be a exclusive for us to offer in our stores,the only challenge now lies with the special TV offers "derivitives " to the big box guys which might apear the same with a change in the model number confusing customers,put all dealers on the same wholesale cost with a strong distributor program to those who qualify would be the next move I say make selling simple bring back selling based on service rather than low price customers would be happier Jy

  • Heynow

    slippery slope towards price fixing and collusion.

  • Jack

    This opens up the door for unauthorized dealers to reap the benefits of these policies. There are (2) unauthorized dealers in particular that have been around for years, have good track records on review sites and the BBB and always have an endless supply of the same top brands and models. These guys have been running rogue w/o having to follow MAP policies. I refuse to list their names for free advertising but most in this market know who they are.

    …and now they will be able to list these UPP models at whatever price they choose while all the legit dealers are stuck. If the manufacturers don’t put a stop to this, these unauthorized dealers will benefit big time. Sony won’t cover their manufacturer warranty for unauthorized purchases but Samsung will.

  • jeffoheir

    Several dealers I spoke with last night did mention the Bose policy and said it has helped them. One dealer also talked about Epson’s recent UPP on high-end projectors, saying it has helped him increase margin (about 40 points) All of the dealers i talked to said they’d like to see more vendors follow suit. None of them seemed worried about price fixing and collusion. I will, however, add that to my follow-up questions. Send me your questions and I’ll try to get some answers. Thanx for the posts.

  • Richard Glikes

    The margin at UPP will not be high but it beats the hell out of 10%……The real question is what happens if the TVs back up or are discontinued.