Conquering the Squeeze
The consumer electronics industry is experiencing unprecedented growth. Total industry revenue from factory to dealer sales hit an all-time high of $145 billion in 2006, an increase of 13 percent over 2005. This is the largest year-over-year increase ever recorded by the Consumer Electronics Association. At the same time, the industry is experiencing an increase in consolidation of CE sales on the retailer front. For instance, CEA research shows that the top five CE retailers are gobbling up an ever larger piece of the CE pie.
Today, the top retailers are able to exert more market influence in their supply relationships with manufacturers. The independent sales reps and distributors, which may not have the same market leverage, often focus on smaller, regional or independent retailers. In this increasingly competitive market, the smaller retailer is also challenged by consumers motivated primarily by price. The bottom line is the independent sales reps and distributors find themselves sandwiched between the competing demands of manufacturers and retailers. So what are the independent sales rep and distributor to do?
In late 2005, CEA conducted in-depth interviews with more than two dozen independent sales reps and distributors to see how they view their place in the CE supply chain, and what they are doing to stay competitive. The study shows how to conquer the challenges presented in today’s competitive marketplace.