News

NuVo Fires 2 Dealers for Unauthorized Internet Sales

Both violated a “Preferred Dealer” agreement by selling products on eBay or Amazon.com.


A dealer was caught after selling a NuVo Music Port on eBay after registering the system software.
Tom LeBlanc · August 19, 2009

NuVo Technologies has fired two of its “Preferred Dealers” due to unauthorized Internet sales.

NuVo says an Indiana-based dealer sold NuVo equipment on Amazon.com to somebody in Oklahoma, while a Texas-based dealer sold a NuVo product on eBay to a buyer in Ohio.

“NuVo has a zero-tolerance policy with regards to unauthorized internet sales of our products,” says Chris Westfall, NuVo’s vice president sales, USA.

Tough Times Not an Excuse

Westfall acknowledges that “doing the right thing isn’t always easy” during a recession, but that it’s important for NuVo to enforce its standards to protect “the vast majority of NuVo Preferred Dealers who play by the rules.”

Extra inventory can be crippling for integrators, forcing them to get creative in order to unload overhead.

Westfall says that is why “NuVo has one of the most liberal return policies in the industry, including a three-year warranty on our systems. Our speakers carry a lifetime warranty. We try to work with our integrator partners to make sure we do the right thing on returns, within reason.”

NuVo’s Preferred Dealers agreement also prohibits:

… selling NuVo products to third parties that intend, or that the dealer reasonably believes may attempt, to sell NuVo products via the internet, including sales made through auction and reseller sites like eBay. Preferred Dealers also agree not to merchandise or advertise NuVo products below retail price.

NuVo isn’t alone in cracking down on unauthorized sales. Niles Audio, Monster Cable and Richard Gray’s Power Company all have ramped up efforts to deal with “gray market” sales.

How They Were Caught

The Texas-based dealer sold a NuVo Music Port on eBay after registering the system software.

“Since the system was already registered, the Internet buyer contacted NuVo directly to complain that he couldn’t use what he had bought,” Westfall says. “It created multiple calls into our tech support and considerable involvement from NuVo. The end user was put in touch with a local dealer and our tech support gave him the registration code he needed.”

The Indiana-based integrator apparently sold a Grand Concerto system on Amazon.com. Westfall doesn’t indicate how the company tracked that one down, but he does say NuVo is in the process of buying other systems from online sellers.

Selling older products online isn’t just bad for profit margins, Westfall adds, it’s also bad for the custom electronics industry in general.

“All NuVo source equipment and edge devices (keypads, wireless control pads, etc.) are backwards-compatible. So, the best solution for our older products is to install them through traditional means, not sell them over the internet,” he says. “Selling online takes the ‘integration’ out of ‘custom integration,’ and harms our channel and our business.

“If there is a particular challenge with an older product, we encourage our dealers to reach out to their local NuVo territory representative or distributor. Quietly putting gear online and hoping for the best is a mistake.

“With an outstanding retrofit solution right around the corner in Renovia, integrators should hang on to older NuVo source equipment and sell it into Renovia systems jobs. If they need some ideas and strategies, we are here to help. It’s not worth the risk, and it cheapens everyone’s value proposition, when dealers sell inappropriately on the Internet.”



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  About the Author

Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing. Have a suggestion or a topic you want to read more about? Email Tom at tleblanc@ehpub.com

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