We are running this letter from Gary Woodward, of McLean, VA-based Hurley’s Auto Audio, Northern Virginia’s oldest car electronics store. It’s opinion’s are not our own. We offer it in case it fosters some healthy discussion between suppliers and dealers, both of whom are challenged by the car audio market and a still rough economy in many areas of the country.
I’m calling you out….
We all are aware of how competitive the car electronics business has been for the last several years. I want to discuss some of the competitive pressures that we, at Hurleys Auto Audio deal with daily:
1-The aftermarket factories cannot keep up with technologies in today’s cars. I have let $500,000 in business leave here in the last three years because the Chinese/Japanese product resellers cannot spend the money to properly evaluate the newer high line cars. In the race for sales volume there seems to be no money left for research and tech support. A wait of an hour is becoming the average with some of the leading companies. The world does not all drive Toyota and Chevy…Stack it up, move the numbers. Tech support controls profits.
2-The products that we have offered seem to have no market research as to whether there is a market for the product. I’ve got at least four dead dogs in the showroom to remind me. I guess no one hears on the exit interview “what the heck were we thinking?” or were they even thinking?
3- Delivery dates, even when stated are often missed. Yeah, we will ship next day-but the order won’t go out for two days. You call the company and you get a “deer in the headlights” kid on the phone who has no authority. “We’re sorry” does not put money in the bank for payroll.
4-Your product blows up in the market place leaving me the dealer and my customers (that I have to face and make good on the deal) holding the bag. One major radio/GPS brand sells units with Bluetooth that does not work if more than a foot from the unit. Come on! Several vendors have gotten me for several thousand dollars in unfix able, unsellable goods. They have no shame as they slither back into my store a couple of years later trying to “make it up to me” for 10 cents on the dollar lost; but not the customer goodwill that I lost.
5- There is no go to market strategy. A couple of major lines sell their product on the net at their own web site at MAP (Minimum Advertised Price). MSRP (manufacturer’s suggested retail price) is gone. This effectively puts a ceiling on the price that product is sold at. Low prices are tolerated and probably encouraged on the Internet, effectively putting downward pressure on the price. The factories have this designed to hit price points that they feel increases the volume of sales. Do you know the meaning of minimum and maximum price fixing? There is an “invisible hand” controlling pricing in the marketplace.
6- Distribution is out of control. I can purchase one brand of electronics from two authorized distributors and three wholesalers who are unauthorized, but tolerated as they can move product at low prices without any costs of support. Product is being sold on the Internet that is just several dollars above my wholesale costs. One distributor of product, who is authorized to sell in my territory does not support the full line (leaving me with gaps in product needed to sell). The distributor that does stock the full line and has trained sales and install support cannot sell me due to territorial limitations.
How does this make sense?
7-The associations seem to just want to give each other awards and get their pictures taken at a cocktail party. Where is the “service” in member services of the associations? Do I call the teamsters?
8– Now our Chinese manufacturers are selling direct on the Internet (Amazon). Do any of you need me?
I call for the participants of the electronics business, who can, to try to clean up the business. Act like you want my store and others like mine to prosper in the business. Suppliers, I’m waiting out on the sidewalk! Come on out!