Recent news in the musical instrument (MI) or NAMM (National Association of Music Merchants) industry could potentially influence the distribution of consumer electronics products. Taking a major step in restructuring its distribution, N.Y.-based Electro-Harmonix (EHX) has reportedly ended a relationship with the online retailer giant Amazon.
First reported by Music Trades Online and Music & Sound Retailer, the severed relationship is the result of constant changes to Amazon policies and the retailer's treatment of MAP (minimum advertised pricing) procedures that allow for “alias” companies to sell below MAP.
EHX, a company that dates back to the late 1960s, is well known in the MI market for its guitar and bass effect pedals, and in the greater electronics industry as a manufacturer of analog tubes.
In the Music Trades Online story, EHX's founder Mike Matthews cites a number of issues his company has encountered beyond the issue of subverting MAP policies.
Matthews acknowledges the possibility that EHX's revenues could be hurt, but in the big picture he says the only dealers affected by his move to cut ties with Amazon are the dealers that are engaging in alias business setups.
In all likelihood, EHX's experience with Amazon isn't unique, and if consumer electronics manufacturers take a closer look at their Amazon sales they could see similar situations. The result, if electronics companies reexamine their Amazon sales, could be the same benefits that Matthews sees for EHX — improving sales for dealers that operate legitimate businesses.
Moves like EHX's would, in the grand scheme for consumer electronics manufacturers, go a long way in rebuilding dealer relations that were hurt during the recessionary period of 2008 through 2011.