When it comes to inventory other than radios, should dealers buy in heavily for this coming year or play it safe?
Will sales slow down this year? Will prices fall?
Last year will be a tough year to beat. Some retailers were up by high double digits, over a strong 2020. Most tell us they expect sales to fall at least slightly this year.
Then there is the issue of price. Higher car audio product prices are leading some retailers to buy more cautiously in 2022.
A top of the line amplifier that once sold at $1,300 is now up to $1,800. Low end radios are up by about $40 and some radios are up by $200.
Three-store chain Audio Express in Richmond, VA is keeping a lid on buying because of recent price increases.
“It getting to the point where people will be less likely to afford it,” said CEO Andy Bagwell. So he’s ordering the same as last year but also bringing in some lower priced lines.
“Do I feel like the demand will be as high as last year? I think it will be a little bit off because of inflation. Customers are paying through the nose everywhere they go. Demand is a little bit less.”
On the other hand, inflation is also helping sales because of high car prices. “Probably on a daily basis we have customers coming in and upgrading older vehicles because they don’t want a new car and can’t get one now anyway, and used car prices are so out of whack…” Bagwell said.
Some retailers say sales are strong but traffic is down. Nate Kubicz of Car Tunes Stereo Center, MI said, “We have seen over the last 60 to 90 days, store foot traffic is down compared to the year ago. The sales results have stayed great but foot traffic is down. We have a lot of inventory and we have concerns about 2022. If you pay attention to gas prices, they are up; grocery bills are up. At some point, we will hit a breaking point with this consumer.”
The good times have barely slowed for The Specialists, AZ. “We’re still banging them out. Maybe there’s been a little drop off, but the bays are still full,” said Pete Riker. Perfectionist Autosound, AK also has seen only a minor slowdown. It is buying what it can and is booked into April.
Ricky Smith’s Audio in Louisiana says some amplifiers and speakers are still hard to find so it’s still ordering what it can get. As for this year, “We’re expecting a bit of a decline but we haven’t seen it yet,” said Alan Benit, Manager of the Lafayette store.
Higher product prices are causing Avenue Sound, NY to buy more cautiously. “We’re going to be a bit more conservative. The worry is the vendors, because of the fact they had to increase their pricing, that they’ll price themselves out of the market. We’re starting to get some consumer push back already,” said Vikas Moolchandani.
Among larger dealers, Custom Sounds said that it is expecting a 7 percent increase in sales for the coming year “over the massive growth last year,” according to Mike Cofield. Another buyer of a large retailer said, “We currently plan to curb our buying only on amps and speakers where we already got a little ahead of the demand. We aren’t expecting a slowdown…”