Nortek AVC Group Consolidates Elan, Niles, Xantech Reps

It’s been more than a year since Elan Home Systems, Niles and Xantech joined forces under one umbrella, The AVC Group, LLC, a division of Nortek's (OTCBB: NTKS) Home Technology Group. The three companies are finally formalizing a new structure of collaboration, starting with a consolidation of rep firms from 45 down to 15.

We’ve seen some collaboration from the entities in the past, but it has been little more than a bunch of handshakes and a commitment to help each other.

Today, The AVC (Audio Video Control) Group is announcing a reorganization of its independent rep force. Previously, 45 partners represented different AVC lines, including Elan (home control), Niles (multiroom audio and control), Xantech (IR and other home-control problem solvers), Aton (one-wire multiroom audio) and Sunfire (speakers, subwoofers, components).

All of these reps are being let go, but 15 of them (see page 2) will be brought back on to represent all five AVC brands.

“For dealers and distributors, there are many benefits,” AVC president Mark Terry tells CE Pro in an exclusive interview. “There is a single point of contact for all of the brands, so it takes less of their time. There’s only one phone number to call to get a bunch of issues resolved.”

More importantly, though, it allows the reps to offer bundled and tiered programs across all of the AVC brands, Terry says: “They can’t do that if there are separate reps repping separate brands.”

Rebates, Other Programs to Encompass All Brands

With the new structure, individual dealers who patronize several or all of the brands become more important to AVC.

“Most dealers want to have fewer vendors,” Terry explains. “This gives them clout with a number of brands but a single vendor.”

Likewise, each of the re-upped reps will have more clout with AVC. For this reason, “some of the rep firms have agreed to discontinue lines that compete with us,” Terry says. “Because we represent a more significant portion of their income now, they’re more comfortable with doing away with some lines.”

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One of those reps is Tandem Marketing, based in the Chicago area and serving the Midwest. Due to the changes, Tandem will lose its Niles representation in Minnesota, but gain Xantech in Illinois, Wisconsin, Indiana and Kentucky.

“Unfortunately,” says Tandem principal Wally Whinna, “to implement the new program, many good representatives will experience negative effects.”

In the end, though, “It will create an opportunity for dealers to have access to what is a very diverse and strong mix of products,” Whinna says. “The efficiency will make vendor management easier and provide profit opportunities otherwise not available.”

Despite the rep consolidation, AVC won’t foist all of its brands on dealers who only want one or a few of them, says Terry: “We’d like dealers to carry all of the brands, but if they don’t want to carry them all, that’s fine.”

Often, with other multi-product organizations, he says, “they want you to buy everything they offer, even if it’s not the best solution.”

At the same time, each AVC brand will maintain its own identity. Factory reps will be responsible for a single line, as always.

Terry explains, “We’ll have the same direct sales force. We believe the rep firm is the point of consolidation. Up to that point, we still have specialists per brand that work with the rep.”

Why Have Reps at All?

The landscape for independent reps is changing. Velodyne and Lenbrook famously dropped their reps recently, to mixed reviews.

“The rep model is an old model that’s going through a lot of changes,” says Terry. “It started when flights were expensive and information was not so readily available.”

That has changed with the ubiquitous Internet – readily accessible via smart phones – and flights so inexpensive that factory reps can easily fly out to remote sites if necessary.

At the end of the day, though, “it’s still a people business,” says Terry, and the AVC group has no intention of abandoning the independent rep: “A lot of companies are. They have the misguided idea that they can save money by doing it themselves.”

Independent reps can cover an entire territory, including smaller cities, and they speak the local language.

As Terry says, “Every area has a different kind of barbeque.”