Home Technology Buying Groups: Comparing HTSA, HTSN, ProSource, Azione

HTSA, HTSN, ProSource and Azione are considered the leading buying groups and networking organizations for home-technology and consumer-electronics professionals. Should you join one of them?

Given the slim margins on most of today’s custom installation products and technologies, common knowledge would suggest that anyone doing more than $1 million per year in sales should join a buying group.

Why? Because buying groups negotiate very good product discounts for their members. Ranging from 2 percent to 15 percent off dealer cost, these savings drop directly to your bottom line, and for many integration companies, they represent the total amount of net profit at the end of the year, without which you might be breaking even, or losing money.

CE Pro spoke with leaders of the major buying groups serving the custom electronics industry to get an overview and discuss other benefits of joining.

Do the Math

The first order of business in deciding which buying group is right for you is to meet with the different groups to hear about their deals and determine how their vendor line card matches up with the manufacturers you support.

Then do the math to assess whether there is a financial upside factoring in the amount you will pay in annual dues. Sometimes, beyond discounts on products, members get extended payment terms or more favorable freight allowances as well as free marketing or training benefits.

Brand Loyalty  vs. Better Deals

In most industries, how much you save on product purchases would be the only criteria when deciding to join one group over another.

In other industries, there also seems to be a strong expectation that buying group members will completely align their product line mix with that of the group’s vendor deals, but in the custom electronics channel, though brand alignment is ideal, there is less pressure for integrators to stop selling certain lines.

Clearly this is better for integrators who don’t want to significantly alter their current brand lineup, but less so for vendors. They must make tougher decisions when supporting various buying groups since their investment is only justified when they can see significant year-to-year growth within a group that makes the discounts they offer worthwhile.

This is a complex issue because on one hand, integrators can feel great loyalty to certain long-time vendors they’ve used or even to certain reps whose lines they support. On the other hand, looking at discounts on a buying group’s high-volume, low-margin lines or even deeper discounts on high-margin audio products can be very appealing.

Also, owners need to take into account that their team already knows how to sell certain brands that the buying group may not support, so you need to weigh the prospect of higher profits against a steeper learning curve for new products and services.

Four CI/CE Buying Groups  to Consider

CE Pro reached out to the leaders of the top buying groups in the channel: Jon Robbins, executive director of HTSA; Richard Glikes, founder and executive director of Azione Unlimited; Andy Orozco, director of business development at ProSource, and Hank Alexander, director at HTSN.

From those conversations, it became abundantly clear that each group acknowledges the importance of the depth and quality of their vendor brands and how great their deals are. But each director touted the even greater benefits of peer networking opportunities, educational and marketing offerings, and specialized support services to help their members stay ahead of the competition and run more profitable and professional companies.

Different types of people like different kinds of group interactions, and different sizes and types of companies get more from different deals and benefits depending on their strengths, weaknesses and stages of growth.

On the very top line, after assessing the brand lineup, when trying to decide which buying group to join business owners can examine the basic profile of each group to help determine where they might best fit in.

HTSA

Year Founded: 1996

Number of Members: 77

Membership Requirements: Board approved/member voted

Total Buying Power: >$400 million

Membership Tiers: None

Dues/Fees: Contact HTSA

Major Brands, Stand-out Brands this Year: Sony, Control4, Dana Innovations, B&W, LG, Samsung, Savant, Harman Luxury Audio, Pakedge, Leon and more

Hot & Emerging Categories: “Strong growth in all categories”

Annual Meetings: Two major member events – Spring Members Conference, Fall Members Conference; ~10 more sessions on multiple topics per year.


Home Technology Specialists of America (HTSA)

At 77 members, HTSA is the smallest group, by design. Its members are some of the larger companies in the industry, many (not all) with showrooms and some kind of retail heritage, all doing custom integration, most in automation, networks, lighting and shade control, and many trying to revitalize audio and video sales and profits with showroom upgrades and new product strategies.

“We hang our hat on providing stellar business education,” Robbins says. “We are super focused on higher end, performance-based products and technologies and helping HTSA members find better ways to show their clients how better products enhance lifestyle and enjoyment.”

Membership criteria loosely follows a one-per-market selection process, though some larger markets merit more than one dealer and there remain several markets where the group is underserved and looking for new members.

“We are also extremely judicious about choosing vendor partners that share our values and want to support the group,” Robbins adds.

HTSA is a not-for-profit member-owned group governed by an elected board of directors.They have two very-well-attended shows per year and are clearly benefitting from new leadership that has added great energy, new programs and a high level of dealer engagement in all group activities.

They also share an alliance with HTSN (Home Technology Specialists Nationwide) that allows HTSA members to selectively leverage some of Nationwide’s excellent marketing services, enjoy better deals on credit cards, financing and other non-product group deals, and access the Nationwide EXCHANGE Distributor purchasing portal.

Special Benefits & Accomplishments, 2017

Jon Robbins, HTSA

  1. Dramatically Increased Level of Communication for Best Practices Sharing. Expanded opportunities at every meeting and event to gather best practices and share them group-wide.
  2. In-Depth Educational Offerings Every Two Months. The group has had great success offering a series of in-depth management workshops on category specific topics that help owners take a deep dive in a particular area of their business. HTSA also partnered with Maverick Technical Institute in Nashua, N.H., to train technicians.
  3. Introduced EOS (Entrepreneurial Operating System) for Owners. HTSA launched a comprehensive program for CEOs to learn how to run better companies. Several members have had great early success implementing these new practices.
  4. Hired Tom Doherty as Special Projects and New Business Development Manager. As a well-respected industry visionary and innovator, Doherty has been brought on to help HTSA identify “the next big thing” so to speak, and develop management education programs and practices around these new initiatives.
  5. New Online Marketing Program. The group is about to announce a progressive marketing program designed to turbo-charge the marketing prowess of members in conjunction with HTSA vendor partners.

Azione Unlimited

Year Founded: 2011

Number of Members: 179

Membership Requirements: 3 years in business, desire to grow and share

Total Buying Power: Sales were >$600 million

Membership Tiers: All members are equal

Dues/Fees: $750 a quarter

Major Brands, Stand-out Brands this Year:Sony, Sonance, Access Networks, LG, Samsung, Integra, Liberty, Meridian, McIntosh, Seura, Leon, Middle Atlantic, Corebrands, Triad

Hot & Emerging Categories: Networks, control, wireless anything

Annual Meetings: At least five, spring and fall, key leaders, the science of selling, CEDIA

Azione Unlimited

At 179 members, five-year-old, fast-growing, forward-thinking Azione is the only group composed primarily of custom companies doing roughly 85 percent of business in residential and 15 percent in commercial and not much online business.

The lion’s share of the group’s education and benefits focused on the business side of running a custom integration company.

Less than 10 percent of group members have showrooms, though many have very tricked out conference rooms to demo automation, lighting control, motorized shades and more

They are a for-profit group and the only group that welcomes manufacturers as full-fledged members with five vendors on the board.

“We like to thinks of ourselves as the most focused business group of the bunch with that focus being on running a successful systems integration company,” says Glikes. “We don’t think dealers should be in the business of collecting so many brands. We only offer 45 vendor deals, but they are the right deals for our members.”

Two annual meetings are completely free for members to attend. Annual dues are $750/quarter or $3,000/year. Vendor members pay $6,000/year.

Richard Glikes, Azione

Special Benefits & Accomplishments, 2017

  1. Launched a Custom-Designed Virtual Show House (VR) App. Azione’s Virtual Reality Show House app shows a virtual 6,000-square-foot house in which Azione members can drop in more than 100 products from 30 brands from an easy-to-use dropdown menu while in the customer’s home. Members can customize the virtual showroom in myriad ways.
  2. Introduced SLAK Chat-based Communications Tool to 70 Percent Participation. Azione rolled out a group-wide SLAK initiative as a new platform for members to communicate with each other on a daily basis, for dealers to communicate with vendors, and for members to use in their own companies.
  3. First Middle Managers Meeting in Chicago. The group held a dedicated meeting for operations and sales managers to learn from experts in their fields — and from each other.
  4. First-Ever Planning Meeting with Vendors. Glikes met with 30 Azione vendor members to figure out new ways to structure programs that drive new business, motivate salespeople and improve dealer level marketing efforts. They also spent time identifying strengths and weaknesses of working with the group.
  5. Group Contest: Winners Get Free Trip to Turks & Caicos. Azione held a contest with various categories for integrator and vendor members to win a free trip at a luxury Caribbean resort.

Next page: ProSource, HTSN, PSA{pagebreak}

Previous page: HTSA, Azione

ProSource

Year Founded: 2014

Number of Members: 555

Membership Requirements: Minimum $1M in annual sales, a non-residential location, 2+ years in business

Total Buying Power: $4.5 billion

Membership Tiers: CI, Power, PRO

Dues/Fees: Tiered starting at $895 per quarter

Hot & Emerging Categories: Premium Audio & Video, Networks, Lighting, Shades, Automation, Commercial

Annual Meetings: Two (ProSource Summit, ProSource Spring Meeting)


ProSource

At 555 members, ProSource is by far the largest and most diverse buying group in the industry.

The organization has dedicated regional managers in each territory, and featuring their exclusive member-owned Expert Warehouse program that expedites product shipping at group rates and helps members order “just-in-time” to achieve higher inventory turns.

It is the only group with three tiers of membership based primarily on size such that all three subgroups benefit from volume deals based on the whole group’s sales.

The Pro Dealer Level is primarily for bigger companies doing more than $10 million/year in brick-and-mortar retail or online sales or both. Members must be voted in by the Board and membership is not guaranteed.

The Power Dealer Level is for specialty custom, retail or hybrid companies doing at least $5 million in sales per year. Membership is not market exclusive though penetration per market plays a part in acceptance by a board vote.

The CI Level is for custom integration companies doing $1 million in sales per year or more and companies for whom the math works vis a vis the groups’ vendor deals. Members must work from a non-residential location and have been in business for at least two years.

Special Benefits & Accomplishments, 2017

Andy Orozco, ProSource

  1. One Quarter Dues Rebate. As a member-owned group, accrued operational excellence and increased revenue production created a scenario where ProSource could rebate one quarter year’s dues to every member in the first quarter of 2017.
  2. Twice-a-Year Business Review for Members in Every Tier. District managers reach out to every member twice a year to go over how they are doing brand by brand, offer suggestions for improvement, programs and services, and perhaps suggest some shifting of business to group brands.
  3. Access to CI Edge Light Commercial Buying Group Deals. ProSource has created a working alliance with CI Edge, a sister buying group in the commercial A/V space that offers members group pricing on many light commercial products.
  4. Big Push for Digital Marketing. Group-wide efforts to help CI and Power Members develop websites and make use of group SEO and SEM tools.
  5. Remote Network Monitoring Initiative in the Works. A group committee is actively pursuing a program to help members reduce truck rolls and create new RMR streams.

HTSN

Year Founded: 2015

Number of Members: 300

Membership Requirements: In the CE/CI business with a confirmed business address. No minumum annual rev. requirement

Total Buying Power: Nationwide is $15B. HTSN is $1.3B

Dues/Fees: $250

Major Brands, Stand-out Brands this Year: LG, Sony, Control 4, Nest, Google and AudioQuest

Hot & Emerging Categories: Connected home and audio as a category

Annual Meetings: Two + PrimeTime

Home Technology Specalists Nationwide (HTSN)

At 300 members, HTSN is a subset of the much larger appliance, CE, furniture and mattress Nationwide buying group (doing $15 billion in sales annually).

Formerly known as Specialty Electronics Nationwide (SEN), in May 2015 the group basically dissoved and rebooted to solidify their dealer base and refocus benefits to best serve the needs of custom installers.

The revamped group would benefit both new business owners, as well as or more mature dealers who recognize the advantages of leveraging the group deals and marketing programs offered by the bigger Nationwide group affiliation, as well as higher-end Nationwide appliance members.

“We can really help owners who are new to the CI business get set up with affordable websites, marketing tools and great rates on credit card swipes and other business services,” says Alexander.

HTSN is a for-profit group. There is no minimum size requirement. Members are part of a regional Nationwide chapter with a local field rep.

They pay Nationwide dues of $250/month ($750/quarter) but don’t pay extra to be part of HTSN. HTSN is also affiliated with HTSA (hence the name change) and offers its EXCHANGE distributor program and some of their marketing services to HTSA members.

Reciprocally, HTSA allows some HTSN members to take advantage of select HTSA educational offerings. 

Special Benefits & Accomplishments, 2017

Hank Alexander, HTSN

  1. EXCHANGE Distributor Purchasing Portal. Nationwide and HTSN have negotiated partnerships with eight national distribution partners that their members can access through one streamlined portal.
  2. MemberNet TV and Complete Media and Marketing Services. Access to Nationwide’s MemberNet TV affords HTSN members the ability to demonstrate 4K content and solutions in their showrooms including first access to film releases and hot sporting events. Members can also leverage a wide range of marketing services from the Steve Bryant facility in Georgia.
  3. PrimeTime and First Ever Dedicated HTSN Group Meeting. HTSN members can attend either or both of the two annual Nationwide PrimeTime shows. In April HTSN will host a show exclusively for HTSN members in Chicago.
  4. New Audio Initiative. HTSN is organizing a series of member visits to key audio vendors’ facilities for product and demo training and tips to help members learn to sell more audio.

PSA Group 

For custom integrators who are more security-minded or want to integrate more security, there are several security-oriented buying groups, namely, the AIN Group and the PSA Security Network. As of last fall, PSA, said to be the world’s largest electronic security cooperative, announced it was expanding its market footprint to include the professional A/V and communications market.

The expansion will offer qualified systems integrators in the A/V, communications and physical security industries access to more than 170 industry-leading product lines through PSA Security Network.

 

“We are seeing more and more crossover between the physical security and the audio-visual market on a daily basis,” says PSA president/CEO Bill Bozeman. “The decision for us to expand to the A/V market that we have offered to the security market for over 40 years was a natural evolution for our company.”

The group, which along with physical security has also addressed cybersecurity of late, particularly at its annual spring PSA-TEC Summit, says the market expansion will allow all its members to be more competitive on A/V and security projects with discounted vendor pricing, the ability to streamline their order processes and gain access to education and training resources.

PSA currently offers products to cover audio, audio and video conferencing, cabling, digital signage, displays, projectors, intercoms, mass notification and life safety, furniture and mounts, paging/public address, power needs, and other A/V accessories.

In memory of Michelle Benaim (with husband Avi, Azione 2014)