After 3 ½ years of effort, Sony Mobile said it has reduced Internet discounting of its car audio products for specialist retailers.
The company was issued a mandate by corporate headquarters to reform and reshape the 12 volt business and it responded with a focus on cleaning up discounting on the Internet for its specialist products, said Rick Kojan, National Sales Manager of Mobile Electronics. It also moved to a minimum advertised pricing (MAP) program in 2010 on head units over $129 and all GS series amplifiers, speakers and subwoofers.
“Everyone has the drive to do more sales….that pursuit is one thing that fuels all of consumer electronics’ race to a dollar and Sony was in it. We’d wait for months’ end for our orders…,” said Kojan, adding, “The decision was made…to cultivate a profitable marketplace for our dealers and for Sony.”
It consolidated its product line and got rid of similar models, some in only $10 or $20 step differences, so there was less overstock and less deal making at the end of the month.
All in bound shipments of car audio products received in Sony’s California warehouse were scanned for serial numbers on head units and amplifiers for tracking to deter transshipping.
In the past 3 1/2 years two retailers and two distributors have been deauthorized. Seven dealers have had their product accounts temporarily on hold for a violation. Sony has attempted to buy back transshipped goods in 50 cases and successfully traced 9.
Sony also established a “fair and equal” buying opportunity on sale specials made available to all distributors “so when there was an instance of an overstock, we made sure everybody played on a level field and everyone had an opportunity for said deal,” said Kojan.
Sony maintains a company-wide compliance committee that rules on MAP and transshipping issues. A first time violator gets a 30-day hold on product; a second time offender gets a 60-day hold and a 3rd time offender gets a 90 day hold on product. After that the offender is cut off completely.
The company now limits the online dealers who can carry the brand. The only authorized online-only sellers for Specialty GS Series are Crutchfield, Sonic Electronix, Amazon, Car Toys and Sony. All are bound to MAP.