Control & Automation

Amazon’s New Custom Smart-Home Service: Who Cares if They’re ‘Sincere’?

Countering the Amazon-bashing, Julie Jacobson says new CEDIA program may or may not work, but don't dismiss it just because Amazon might change its smart-home strategy in the future.

Amazon’s New Custom Smart-Home Service: Who Cares if They’re ‘Sincere’?
CEDIA dealers (with their attorneys and accountants) should examine the Amazon Custom Home Service opportunity on its own merits, not dismiss it outright because Amazon is a bully.

Julie Jacobson · October 16, 2017

It’s silly to spurn potential partners like Amazon just because their business models might change in the future. Industry commentator Chuck Schneider warns CE Pros to do just that – dismiss Amazon’s new custom-installation service because, as any catty Bachelorette on the reality show might proclaim, “They’re not here for the right reasons.”

Amazon is launching a “Custom Home Services” program, promoting CEDIA-certified dealers as potential installers for e-commerce customers who don’t want to do it themselves.

Whatever Amazon actually says about the new service, the company’s motivations should be obvious: It sells loudspeakers and displays and other electronics that cost tens of thousands of dollars. Consumers are likely to purchase those high-dollar products online if there’s a trusted installation partner to go with it.

If we were to say no to every new opportunity just because some day in the future it will no longer work for us … we wouldn’t get very far.

Integration companies with at least one CEDIA-certified employee can participate. It might be a good move for those companies. It might not be. But to categorically dismiss the opportunity because Amazon tends to destroy its competitors, or because mass marketers often eliminate third-party dealers, is a little naïve.

Schneider says Amazon is just using the custom channel until it finds a more profitable way. Say it isn't so!

Just look at DirecTV, Sirius, XM, cellular service providers and so many other vendors who have exploited resellers in this way, Schneider laments. These nefarious companies lured dealers into their traps, only to drop them later on.

Well what company doesn’t shift gears, especially as they transition from start-up to leader of the free world? Our own industry is chock full of companies that brought on reps, and then dropped them; attracted integrators, and then added retailers; started at the high end, and then launched DIY. Recruited too many dealers, and then fired the smaller ones. Started small, then got big.

Do you not serve production builders because they might one day launch a competing integration company? Do you not rep a new line because the vendor might eventually sell direct? Do you not take a sales job because commissions might drop in the future?

If we were to say no to every new opportunity just because some day in the future it will no longer work for us … we wouldn’t get very far.

Sure, Amazon Might Be a Mistake

To be sure, the new Amazon programs may be bad for your business.

Grab your attorney and accountant and definitely do your homework, as Schneider recommends. Examine the terms carefully. What kind of service is required? What happens if clients aren’t satisfied? How can participating dealers target customers after the initial sale?

We can assume that any burden Amazon places on dealers today … will only worsen in the future.

We can assume that any burden Amazon places on dealers today … will only worsen in the future. Amazon loves to change the game for its own benefit, for example, requiring resellers to pay for return shipping whenever a customer is unhappy with a product, or just changes their mind.

Likewise, whatever perks Amazon offers CEDIA dealers today will certainly diminish in the future.

Schneider suggests the mere anticipation of such changes should scare all dealers away from the proposition.

Schneider worries that Amazon’s “intentions” aren’t “sincere.”

Who cares?

Take a good hard look  at the Amazon opportunity vis-à-vis your business today, and the landscape tomorrow. Don’t categorically dismiss it because, as Schneider warns, Amazon might one day sell Sonos at Whole Foods.

NEXTCEDIA Dealers Shouldn’t Trust Amazon as Smart-Home Partner, Says Industry Veteran



  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]

Follow Julie on social media:
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View Julie Jacobson's complete profile.



  Article Topics


Control & Automation · Automation · Business · News · Products · Amazon · CEDIA · Echo · All Topics
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Comments

Posted by Bruno Napoli on November 2, 2017

Sincere or not, it is way too late for that question: it’s no longer in our hands. GAFA and all the others are here, and for the moment, Amazon leads the pack. They are using words that our industry has always struggled to pronounce: “Affordable, service, support, experience, and maintenance.” I know, it’s a simple marketing concept, and it looks like a good old political speech for an election campaign, but it works!

By the way, GAFA are just doing their job. In fact, they are doing THE job - the job our whole industry somehow failed to accomplish. We have always somewhat scorned small jobs because there is not a lot of profit. Well, no worries, GAFA and all their friends will take care of it now. GAFA does NOT steal any business from us nor try to kill us. They go into the rooms we left empty and lead the way to create a lot of new opportunities for the most creative of us. Maybe we were too uptight to go there, or maybe it was not “chic” enough to partner with the construction industry? Maybe there was not as much margin for us we thought? How can we make money on a $100 Apple TV? After all, we are the high-end Custom Installers and we deserve at least 45% margin on a $10,000 box or we are left unhappy. Well, all boxes are now under $299. How are you going to survive?

I’m quite sure that just 18 month ago, we all would spit in the face of anyone that dared to suggest that Amazon could revolutionize our industry.  Where are our experts in marketing now? Probably too busy thinking about how to make more money by selling an extra pair of speakers called “The Voice of God” with new, 36-channel audio formats while people now use their iPhone. Busy developing new exclusive-to-our-channel home automation systems with a $5000 in-wall screen that will be obsolete in 2 years to realize that people will use voice command. They failed to realize that we were the only ones that enjoy technology and forgot that people don’t buy technology but an experience.
For all those years, custom installers were the only ones who enjoyed the technology and not really end-users. As the result, we now have a bunch of professionals that are specialized in outdated, expensive technology that can be replaced by any good 17-year-old geek with today’s technologies. Please, do not underestimate the fresh, hungry, young generation. They are born with an iPad in their cradle and consume all the programs on it.

If our industry was better prepared, all this would not have happened to this proportion. CEDIA has been trying to prepare us for this for years, giving us training, best practices, and meetings with industrial partners. I think they pretty much failed on this: Today just 1% of custom installers in the world are CEDIA members where we should be 90% and be one of the most powerful mafias in the world. On the other hand, still today, too many custom installers think that CEDIA is supposed to be their sales rep. Easy money: just pay the fee, put the nice fancy logo on your website & your shirt, and new business is supposed to fall from the sky. Now, custom installers love to complain about CEDIA, but do they really go to training, get certifications, or follow those rules and best practices? Don’t ask what CEDIA can do for you, but what you can do for CEDIA. If custom installers don’t follow the rules, don’t get training and or certifications, and they do not sell a good experience, or service and maintenance, or remote supervision or offer 24/7-support, they are not helping CEDIA. Our whole industry will not get the credit and positive prestige it deserves. CEDIA, with in all its efforts can only have the reputation it’s members extend to the world… We should remember that custom installers represent CEDIA to the end-users, and CEDIA represents custom installer to this industry.

Regarding our bad relationship with the construction industry… They hate us because we’ve never wanted to be associated with “them” and never wanted to follow their rules. We thought, “that industry is way too dirty. We are technology and we are the future. Today we pay the price of our arrogance because the construction industry has partnered with GAFA and not with us… Those millions are not going to fall into our pockets.
For me, remote supervision has been the thermometer of this industry. Ihiji, Domotz, Pakedge, Snap AV, and Krika: we lost our souls to trying to make custom installers understand that experience, service, and support are more important than technology. And an industry where no one is able to sell remote supervision on any single job to provide a better service to its client, where no one is able to sell service and maintenance is a dead industry.

Now what? For the next few years, billions of dollars are going to be spent by consumers in IoT, AV, & Home Automation. The only question our AV industry need to ask for now is, are we brave enough to look in the mirror and change our business model?

Posted by crookedbow on October 19, 2017

Unfortunately, for me, there was a ring of truth in the original article - at a previous position I witnessed Amazon “appropriate” data and expertise from a customer that was selling as a third party through their site, and going into competition with them - the customer wasn’t happy about it, as you can imagine. I was told that Amazon had a reputation for this kind of behavior - “Embrace, extend and extinguish” it was known as, at Microsoft…

Posted by cybermanor on October 18, 2017

Julie - I appreciate your logic and reason as it applies to our custom installation channel over the years – and your counterpoint column on Amazon’s new partnership with our channel is a perfect example of the best of your work.

Posted by Josh Willits on October 18, 2017

Julie didn’t mince words!

Posted by Steve Hoge on October 17, 2017

I like your attitude. smile

Posted by Steve Hoge on October 17, 2017

I like your attitude. smile

Posted by Josh Willits on October 18, 2017

Julie didn’t mince words!

Posted by cybermanor on October 18, 2017

Julie - I appreciate your logic and reason as it applies to our custom installation channel over the years – and your counterpoint column on Amazon’s new partnership with our channel is a perfect example of the best of your work.

Posted by crookedbow on October 19, 2017

Unfortunately, for me, there was a ring of truth in the original article - at a previous position I witnessed Amazon “appropriate” data and expertise from a customer that was selling as a third party through their site, and going into competition with them - the customer wasn’t happy about it, as you can imagine. I was told that Amazon had a reputation for this kind of behavior - “Embrace, extend and extinguish” it was known as, at Microsoft…

Posted by Bruno Napoli on November 2, 2017

Sincere or not, it is way too late for that question: it’s no longer in our hands. GAFA and all the others are here, and for the moment, Amazon leads the pack. They are using words that our industry has always struggled to pronounce: “Affordable, service, support, experience, and maintenance.” I know, it’s a simple marketing concept, and it looks like a good old political speech for an election campaign, but it works!

By the way, GAFA are just doing their job. In fact, they are doing THE job - the job our whole industry somehow failed to accomplish. We have always somewhat scorned small jobs because there is not a lot of profit. Well, no worries, GAFA and all their friends will take care of it now. GAFA does NOT steal any business from us nor try to kill us. They go into the rooms we left empty and lead the way to create a lot of new opportunities for the most creative of us. Maybe we were too uptight to go there, or maybe it was not “chic” enough to partner with the construction industry? Maybe there was not as much margin for us we thought? How can we make money on a $100 Apple TV? After all, we are the high-end Custom Installers and we deserve at least 45% margin on a $10,000 box or we are left unhappy. Well, all boxes are now under $299. How are you going to survive?

I’m quite sure that just 18 month ago, we all would spit in the face of anyone that dared to suggest that Amazon could revolutionize our industry.  Where are our experts in marketing now? Probably too busy thinking about how to make more money by selling an extra pair of speakers called “The Voice of God” with new, 36-channel audio formats while people now use their iPhone. Busy developing new exclusive-to-our-channel home automation systems with a $5000 in-wall screen that will be obsolete in 2 years to realize that people will use voice command. They failed to realize that we were the only ones that enjoy technology and forgot that people don’t buy technology but an experience.
For all those years, custom installers were the only ones who enjoyed the technology and not really end-users. As the result, we now have a bunch of professionals that are specialized in outdated, expensive technology that can be replaced by any good 17-year-old geek with today’s technologies. Please, do not underestimate the fresh, hungry, young generation. They are born with an iPad in their cradle and consume all the programs on it.

If our industry was better prepared, all this would not have happened to this proportion. CEDIA has been trying to prepare us for this for years, giving us training, best practices, and meetings with industrial partners. I think they pretty much failed on this: Today just 1% of custom installers in the world are CEDIA members where we should be 90% and be one of the most powerful mafias in the world. On the other hand, still today, too many custom installers think that CEDIA is supposed to be their sales rep. Easy money: just pay the fee, put the nice fancy logo on your website & your shirt, and new business is supposed to fall from the sky. Now, custom installers love to complain about CEDIA, but do they really go to training, get certifications, or follow those rules and best practices? Don’t ask what CEDIA can do for you, but what you can do for CEDIA. If custom installers don’t follow the rules, don’t get training and or certifications, and they do not sell a good experience, or service and maintenance, or remote supervision or offer 24/7-support, they are not helping CEDIA. Our whole industry will not get the credit and positive prestige it deserves. CEDIA, with in all its efforts can only have the reputation it’s members extend to the world… We should remember that custom installers represent CEDIA to the end-users, and CEDIA represents custom installer to this industry.

Regarding our bad relationship with the construction industry… They hate us because we’ve never wanted to be associated with “them” and never wanted to follow their rules. We thought, “that industry is way too dirty. We are technology and we are the future. Today we pay the price of our arrogance because the construction industry has partnered with GAFA and not with us… Those millions are not going to fall into our pockets.
For me, remote supervision has been the thermometer of this industry. Ihiji, Domotz, Pakedge, Snap AV, and Krika: we lost our souls to trying to make custom installers understand that experience, service, and support are more important than technology. And an industry where no one is able to sell remote supervision on any single job to provide a better service to its client, where no one is able to sell service and maintenance is a dead industry.

Now what? For the next few years, billions of dollars are going to be spent by consumers in IoT, AV, & Home Automation. The only question our AV industry need to ask for now is, are we brave enough to look in the mirror and change our business model?