MiTek, maker of MTX car audio, is changing the way it sells to retailers, essentially moving to a hybrid online/retail model.
As of January 1, 2013 MTX products will be purchased from mtx.com so that most retailers will not stock inventory. Retailers, however, will receive commissions from products sold.
All prices at MTX.com can be up to 40 to 50 percent off the manufacturer’s suggested retail price. All orders are shipped directly by MTX to the dealer or consumer.
Dealers can also set up their own portals on MTX.com.
The change in policy is MTX’s attempt “to help increase a dealer’s reach, improve the customer experience and lower costs,” said the company, which is also implementing a strict unilateral pricing policy.
Some larger retailers will remain direct accounts. Others, if they choose to stock MTX in the traditional way will still buy it at MTX.com.
All MTX channel partners will be required to maintain pricing that does not fall below a minimum price or they will lose their ability to sell MTX products, said MTX.
Additionally, “in order to demonstrate the quality of its products despite its aggressive pricing strategy,” MTX will offer a 5 year limited warranty, the longest in the industry. All products starting January 1, will carry a 2 year warranty against manufacturer defects and in years 3-5, consumers will receive a prorated credit towards the purchase of new MTX products.
Mitek CEO Loyd Ivey said the company is making the radical changes in policy because car audio is a ” brutally competitive, rapidly changing business.”
“Competition, both at the manufacturer and the retailer levels, is fiercer than ever before. Online retailers are grabbing market share at an exponential pace, consumers are more educated than ever, and technology is changing overnight. In addition, everyone seems to be in a race to zero profitability. Despite these market shifts, many in the industry are clinging to what are fast becoming antiquated business models. We believe this new model can help specialty audio dealers better compete in this new reality,” he said.
Benefits of the program are the elimination of inventory buy-in quotas and stocking requirements, as well as no freight charges, no credit card processing fees, no processing of returns and warrantees, and no losing customers to “showrooming.” In addition, dealers will have the ability to sell the entire MTX catalog, will receive a guaranteed margin based on street price, and will be able to compete with both online and brick and mortar competitors on both price and selection, said MTX.
A display program, point-of-purchase materials, and participation in the MTX installation network will also be available to qualifying dealers.
Mitek is announcing the changes at CES this week in Las Vegas. It is exhibiting is in the North Hall, LVCC, #2401.
Source: Mitek Corp.