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Will TV Shortage, OLED Bring Back Margins?
ADI’s Randy Blanchard, in his booth during EHX, speculates that the TV production shortage could help bring back dealer margins on TVs.
The shortage is now hitting the channel, giving even more importance to buying group membership and exclusive partnerships between key manufacturers and distributors, such as the ADI distribution deal with Sony announced last fall, that guarantee product for dealers.
But could there ultimately be a silver lining to this turmoil? Randy Blanchard, ADI’s business development manager, residential A/V, thinks so.
“The shortage of flat-panel TVs is more acute than ever,” Blanchard said during EHX in Orlando. “At some point, there has to be a better solution for everyone - manufacturers, distributors and dealers - to make money.”
“TVs cannot continue to be a loss leader for dealers to get into the home. Now that the supply has been cut down, economics says that the margins should come back. Although, it will never be the traditional margins we still see in audio or even what we saw before in video,” he adds.
Blanchard also thinks new technologies will help. “From what I saw of OLED from LG and Samsung, I think it will come to market sometime in 2013, which will also hopefully help bump up the prices and margins on LCD and plasma,” he says.
Blanchard notes that the security industry’s response to Sony flat panels from ADI has been “huge,” and that Sony has authorized “a lot of new dealers” through the partnership. “Sony is an easy brand name to use in a sales conversation, and it gives the dealers more credibility,” he says.
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3 Comments (displayed in order by date/time)
I think the biggest thing that will turn things around is Sony and Samsung, two of the biggest names in displays, protecting their upper end product with a Universal Pricing Policy. I am VERY excited to see this roll out! Not only do custom installers have the ability to actually make a few hundred dollars selling a 40” panel (what a concept, right?), but they now have the ability to promote their company and pricing with confidence! Sure, there will be some customers who get upset that they can no longer buy at Costco for below dealer cost, but for the vast majority of dealers, this is a very, very positive move! I am also hoping that this becomes a trend in our industry. We have been letting the “gray market” internet dealers have their way with our customers for far too long! Time to take back our industry, people!
I have been buying a good amount of Sony from ADI over the past couple months and the margins are very good. Now with some of the displays being end of life the margins have come down, howver new models have come in already with decent margin. If I can make 18-20 points on a TV I am happy.
Nothing will bring back margins to televisions, or many of the other items we used to expect them from. If a large percentage of your business is not coming from services, managed or others you are going to be a dinosaur.