How SnapAV Keeps Prices So Low
Extreme number-crunching puts SnapAV on target to sell $50M of A/V peripherals in just five years. Surveillance cameras coming soon to the SnapAV line card.
“How do they do it? How is one manufacturer able to keep its prices so low and its dealer margins high?”
Those are the big questions many in the industry ask when they look at SnapAV, a manufacturer/distributor that was borne from an integration company. In just five years, the Charlotte-based company is on track to record $50 million in revenues with just 64 employees by providing integrators with an alternative to brand name products in several “low tech” areas including screens (Dragonfly), mounts (Strong), racks (Strong), cable (Binary) and loudspeakers (Episode).
So how do they do it? In a word: technology. Everything that can possibly be automated at SnapAV is, leaving little room for error and lots of margin for its products. The company’s goal is pretty simple: Provide comparable product at a lower cost than name brands in certain high-margin categories for dealers.
The formula is designed to allow integrators to sell products at similar price points to name brands while boosting their margin. With the recession, the timing was certainly right. But in order to do what it does, SnapAV must be super efficient in everything, and I mean everything.
Photos: How SnapAV Keeps Prices So Low
Vice president of marketing Adam Levy is an admitted data hound. He pores over spreadsheets that give him precise ordering patterns on a lifetime, annual or, most importantly, on a rolling 90-day timeframe. Levy uses SAP software that is incredibly flexible in its ability to create instant reports on purchasing patterns among any of Snap’s product categories.
And that data is paramount because it enables SnapAV to operate as a Just-In-Time manufacturer. The company doesn’t need expansive warehouse space at its Charlotte (50,000 square feet), Dallas (40,000 square feet) and Fresno, Calif. (40,000 square feet) locations because it is able to order product precisely from its 27 factory partners in China. That efficiency also enables SnapAV to have just a two-person purchasing department to handle its 970 SKUs while maintaining 98.9 percent of products in stock when ordered.
“We need that level of efficiency to keep our prices low,” says Levy, noting that each factory partner in China builds and delivers at different speeds. “Without this technology, we would need 10 people to manually handle purchasing.”
Out in the warehouse, products that are purchased most frequently are placed nearest the loading docks. Again, to save time. Workers use a sophisticated bar code scanning system that directs the employee to the proper product bay and to the proper product to fulfill orders with 99.92 percent accuracy. In Charlotte, 450 orders per day are processed with two FedEx pickups daily.
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at [email protected]
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