ICE Parts Ways With Transhipping Retailers

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ICE buying group

The In Car Experts (ICE) car audio buying/marketing group said it is launching a zero-tolerance policy against retailer members who transshipping product to other retailers.

This week, it will begin notifying offending retailer partners that they must stop or leave the group.

Chris Cook, President of the Mobile Electronics Retailers Association, (MERA), which recently purchased ICE, said, “Retailers will either cease transshipping or no longer be part of the group.”  “Try to find another industry where you can get their products on the Internet for half the retail price,” he said, noting it’s relatively uncommon, and the car audio industry should not accept it.

Cook said of ICE’s decision, “It will be a little painful, but that’s okay.”

“There needs to be a higher standard for ICE members,” he continued. “This policy is part of our new membership profile to assure that all of our members are truly In Car Experts.”

Transshipping is when a dealer authorized for a certain brand, resells products to an unauthorized retailer, often leading to discounting of the products, and reducing profitability for all retailers.

ICE is currently speaking with supplier members and evaluating current programs.  It will announce new partners and programs in the near future.

Source: CEoutlook

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7 Comments

  1. Posted on behalf of Ray Windsor, President of German Maestro:

    It is nice to see some action on transshipping when it is identified as a problem. Apologies in advance if my observations offend some readers. BUT; industry leaders PLEEEZZEE!

    ONE: The retailers are not the cause of the problem. Transshipping does not happen (on a significant scale) without the knowledge of and often the participation of the brand. Brands can stop and prevent transshipping with the use of simple serial number tracking technology AND a disciplined execution of a transshipping policy. That is a fact. I submit the groups should apply the ZERO tolerance policy to the brands. BUT that takes chops. Never the less, a clear eyed look at the situation will reveal the problem and the solution.

    TWO: Most everyone knows the secret: The authorized retailer receives an order from the unauthorized retailer. The authorized retailer places the order with the brand. The brand fills the order sending the invoice to the authorized retailer and often dropships the inventory directly to the unauthorized retailer. Certainly the brand knows that the authorized retailer with one or two storefronts cannot sell fifteen storefronts worth of inventory out the front door. BUT at best the brand is terrified to turn down the order. The brand therefore complies with the order and pretends to be shocked when the inventory is offered for sale by the unauthorized retailer.

    THREE: Transshipping in and of itself is not good OR bad. The evil (cannibalism) comes from the surprise. The brand articulates a transshipping policy. The retailer believes the brand’s claim. The retailer is then embarrassed in front of his consumer by the brand being offered for sale at the unauthorized retailer. Often at an absurd price. The retailer must then work twice as hard to regain the trust and business of his consumer. Retailers just gotta do some homework.

    Over the past thirty five years there has been a good deal of noise, complaining, gnashing and sucking of teeth, apologizing, recommitting and forgiveness about transshipping. Precious little productive actions have actually been taken by the offenders or by the offended.

    Ray Windsor
    German Maestro

  2. It’s not just transshipping, as defined, it’s also other illicit acts that violate vendor Dealer Agreements. So much of the beaten down value of product is from authorized dealers who then have some incognito e-commerce site on one of the several “marketplaces” via the internet. The products are sold for just several points above cost, which covers the dealers handling, and the backside business program becomes their easy profit. All this, at the expense of everyone else. So really, there are two fronts, at least, that are the total of the problem. Good job, Chris. Contact the vendors and ask who it is they have cut off for such activity.

  3. InstallerNet HELPED a lot of independent retailers. Yes, they built a business and needed help in return, but I am personally very happy tobe an InstallerNet member. If you needed additional parts or labor they usually paid for it. They were sending you FREE customers. What you did with those customers was up to you.

  4. I totally agree. Good job Chris, we as an industry need to self police this and end it once and for all. We not only loose the possibility for profit but also credibility when our products are given away on the internet.

  5. I think it is funny that ICE, also know as MERA, also know as INSTALLERNET!!!! has a problem with middlemen. Its odd how the people that own this buying group built their company on the backs of our industry installers, slashing the labor rates across the country for their own gain, and suddenly they have a problem with others doing the exact same thing.

    I don’t necessarily agree with trans-shipping, and i think it hurts our industry, but the hypocrisy is too great. These people are not looking out for your best interest, they are just protecting their own.

  6. If all the manufacturers and distributors would get on board with this the industry could get back to good profitability.

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