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.”
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.
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. 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.”
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.