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Velodyne Terminates Reps to Sell Direct to Consumers

Popular subwoofer manufacturer scraps rep network in a move that one rep calls 'draconian'; DIY e-commerce site is live.


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Velodyne scraps dealer network, sells direct to consumers with prepaid freight.

Velodyne Acoustics, a popular subwoofer brand for the A/V channel, is terminating its entire network of manufacturer reps, and selling direct to consumer.

Reps were notified on July 25 that their relationship with Velodyne would be terminated three days later. The company's e-commerce site went live right away.

CEO David Hall tells CE Pro, “After careful evaluation of how we get our products to our customers, we determined that we can be more effective in serving the stereo enthusiast by offering products directly from Velodyne.”

One rep tells CE Pro that the vendor “lashed out in an apparently draconian fashion.”

The rep adds that Velodyne’s “selling online with prepaid freight is the first thing that smacks your face when you get to the site.”

In severing ties with reps, Velodyne is responding to “profound” market changes that are “once-in-a-millennium in magnitude,” Hall says.

He cites two such changes: 1) the shifting of manufacturing to Asia and profit-sharing schemes with overseas factories and 2) the Internet “and its impact on communication.”

“This demands a new business model,” Hall says, adding that the new environment “opens doors of opportunity for Velodyne to reinvent itself as again the most cutting edge and exciting audio company.”

In the statement emailed to its reps, Hall says Velodyne weighed the consequences of this move heavily before making the decision to sell direct. The company thanked its partners for the years of work they put in for Velodyne.

"Our decisions are not made lightly and we are making every effort to balance business priorities with the respectful treatment of our representatives who have made numerous contributions to Velodyne over the years," Hall says in the letter. "Due to our new road map and after much consideration, we are terminating our relationship with all of our representatives."

Addressing rampant rumors that Velodyne president Bruce Hall has left the company, David Hall asserts, "Velodyne is a family owned business and Bruce Hall is still involved in Velodyne Acoustics, Inc.”

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Article Topics

News · Audio · Speakers · Home Theater · Subwoofers · Inc. · Velodyne Acoustics · Consumer Electronics · All topics

About the Author

Robert Archer, Senior Editor, CE Pro
Bob is an audio enthusiast who has written about consumer electronics for various publications within Massachusetts before joining the staff of CE Pro in 2000. Bob is THX Level I certified, and he's also taken classes from the Imaging Science Foundation (ISF) and Home Acoustics Alliance (HAA). In addition, he's studied guitar and music theory at Sarrin Music Studios in Wakefield, Mass.

48 Comments (displayed in order by date/time)

Posted by Jon  on  08/01  at  07:45 AM

I hope all remaining dealers move on to bigger and better business models as well. Let these guys fight for the already taken market of the AVS forum guys. 
HSU and SVS have that market locked down.

This direction will change in 2 years.

Posted by Lightning Prez  on  08/01  at  10:57 AM

Go figure, after signing declarations to not sell velodyne on my website, or use any product images or any other way of actually marketing the fact we carried the brand in a modern electronic world…. they turn around throw us all under the bus and go with an online only business model. Its nice to know dealers put in all this work to build the brand recognition and the product..to be summarily executed by them. 

angry

Posted by Jon  on  08/01  at  12:22 PM

Just don’t have a short memory when they come back to market as a CI only brand claiming this and that.

Posted by Joe Calise  on  08/01  at  12:54 PM

Yet another company “selling out”.  They will come back like the rest who try this model, and they will beg for us to take them back.  Shame on them for doing this to us as dealers, and to the reps.  I want to see how many $18,000.00 subwoofers they sell online.  I am glad I have true manufacturers backing us up, and supporting us, they way we have supported them through the years.

Shame on you Velodyne.

Posted by Chris  on  08/01  at  01:17 PM

Oh well, not as if we don’t have other options available to us. Who recently tried this (not quite to this extent) and then came back saying it was a mistake…oh yeah that’s right, Speaker Craft.  Haha!  It’s funny how a CI firm can be quite like a woman scorned…1-2 years from now, “Velo’ who?”

Posted by Dave Humphries  on  08/01  at  01:47 PM

Another old line Audio manufacturer makes a quick buck maneuver by dumping dealers and rep firms. Unfortunately all of the folks above are correct in thier assessment.
We have seen this before . Especially over the last 4 years. The immediate short term move like this bolsters a companies value by saving on rep commissions. Long term with out a sales force and dealer base the sales will drop like a rock . Looks like a move to increase the bottom line so a company can be sold. The dealers do have many options in this category. The immediate action from a rep perspective would be to approach the dealer base customers and present a another line that fit’s the dealer needs and move that business over to a new line. The modern day reality in this day and age with dealers and rep firms working very hard to build business is that a manufacturer who does this will be hard pressed in 2-3 years to get quality rep’s to ever represent the line. The dealers will also react the same way. No one will forget… They will remember thier loyal vender partners.

Posted by 39CentStamp  on  08/01  at  02:20 PM

Velodyne stopped being important in the 90’s. Have you guys heard of focal?

Posted by TDJ  on  08/01  at  07:36 PM

This move is downright laughable….Why would a company that did such a good job remaining a high margin product suddenly decide to whore out its name and product line on the internet….why would you want to compete in such a low margin arena….sounds to me like Velodyne’s family run business is being trashed by a family member that doesn’t have a clue….how sad?  what’s funny is that only an idiot would think that the Velodyne name is strong enough on its own with consumers….anyone that has been in sales for a while knows that consumers only know a few names like Sony etc.  Ask any consumer if they have heard of Velodyne subwoofers and I assure you the only ones that may say yes are those that already own one…Dear Velodyne, I hope you enjoy mediocrity because that is where you’re headed…when you come crawling back to the custom world, I hope dealers collectively tell you where to go and CEDIA does not allow you to have a booth at the trade show….

Posted by Jeremy Burkahardt  on  08/01  at  07:48 PM

SpeakerCraft never fired all our reps our tries to circumvent our dealers.  Our dealers feed us and we can’t live without them.  we had product sold at retail via amazon for a brief while and when it sucked we ended it.  We use all legal means available to whack internet whores. 

Velidyne is a good company.  Who knows the plan.  Look at what b and W did to survive.  Box biz is different than custom.  I sold my fair share of velodyne at retail in 1990.

Posted by David Haddad  on  08/02  at  12:58 AM

To me this smacks of desperation.  Insofar as this isn’t just a policy change that allows some product to be sold on the Internet, it’s a wholesale sacking of their current distribution model.  A manufacturer doesn’t make this type of extreme move unless they are not being successful with their current model.

The article does not address some important questions.  Is Velodyne terminating all dealers?  Are they selling some of their lines direct and others through dealers (their website only shows certain products for sale)?  Are they selling the products on their website at what has until now been retail?  If so, where is the supposed discount to end users that a direct sales model usually claims?

I’d like to see a further follow-up to these questions from CE Pro.

Posted by Paul Collins  on  08/02  at  03:37 AM

“Quality in a product or service is not what the supplier puts in.  It is what the  customer gets out and is willing to pay for.  Customers pay only for what is of use
to them and gives them value. Nothing else constitutes quality.”  -quote from business consultant Peter Drucker

I believe the products and services you offer need to be consistent with your company’s culture, skills, passion and purpose. 

We can choose to align with those who’s principals serve their short term greed or those who serve long term needs.

Your customers have a choice as well; flee or follow.

Posted by Julie Jacobson  on  08/02  at  04:55 AM

David, what is desperation? Trying to keep your business alive? I don’t know the specifics here, but perhaps Velodyne was going down the tubes and was trying “desperately” to stay afloat via a new business model.

Would you rather they closed their doors, lay off their employees and perhaps stiff their suppliers?

Business is tough out there. You never know what you might have to do (or what your investors/owners might force you to do ... JEREMY).

Posted by Robert Archer  on  08/02  at  05:28 AM

To clarify, Velodyne is maintaining its dealership relations. It was only its manufacturer’s reps that were let go.

Posted by David Haddad  on  08/02  at  05:45 AM

Julie, we are in agreement.  They need to do what they think is necessary to stay profitable.  Whether this approach works time will tell.

If all they are doing is terminating reps and selling certain models online, the move seems less drastic to me than I originally thought.

In fact, if they are staying with dealers I’m not sure why it was necessary to terminate reps to sell some product online.  It seems like the two are being tied to each other, but it seems they are really two different moves, one mean to bring in more revenue, and one meant to cut costs.

Posted by chatham152  on  08/02  at  06:13 AM

Do you really think all the reps that were dumped will sit back and watch all their dealers continue being Velodyne dealers?

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