Heeding The Call
A $10 million minimum annual volume required for a dealer to buy direct in 2009—try that CE vendor threshold on for size.
After several years of steadily rising minimum annual volume requirements—$5 million is the new norm among major video brands—the rumors began circulating in late February: One major video vendor was informally telling retailers about its plans for a $10 million threshold in 2009. No retail executive wanted to identify the vendor on or off the record, and no one seemed really panicked. One did remark, “How many $10 million dealers are there? For a single line?”
Why the raised bar? Speculation is easy: Increased commodity prices; squeezed profit margins, especially in flat-panel display; rising production and transportation costs; reduced vendor sales forces, and a desire to make a P&L balance sheet work in one’s favor. The specter of $4 per gallon gasoline prices probably didn’t help “cost to service” calculations either.