NAD and PSB going factory direct!

[frenchmon]

http://www.twice.com/article/467638-Lenbrook_To_Go_Factory_Direct_For_NAD_PSB_Tivoli.p hp

[Ajani]

If I'm interpreting the article correctly, it means that NAD and PSB will be selling direct to dealers and not customers... So essentially just eliminating one layer of middlemen in the process...

It will be interesting to see if that results in lower prices being passed on to the consumers...

[frenchmon]

Yeah thats the way I understand it as well. But the the store can still charge what they wish I assume?

[Ajani]

Yeah thats the way I understand it as well. But the the store can still charge what they wish I assume?

Maybe not... Manufacturers appear to determine the final price (though retailers can give discounts) via MSRP... But, even so it doesn't mean Lenbrook will choose to lower prices, they may just opt to pocket any savings...

[Woochifer]

Yeah, I don't see this having much, if any, effect on customers since it only impacts how the wholesale transaction is done. When I saw the headline, I thought NAD and PSB were going to a direct sales model, as in direct to consumer. That actually would have been newsworthy. But, the sale itself is still conducted by the retailer, so from the consumer's view, they don't see any change even if the behind-the-scenes distribution channels changed a lot.

Among the specialty audio brands, NHT's the only one that's trying to go to a direct-to-consumer sales model while still retaining a dealer network. My understanding of NHT's operation is that NHT's dealers provide space for demos, but even if the customer goes to a B&M store, all of the sales are handled online with the product delivered to the customer. Remains to be seen how well this works.

[Ajani]

Yeah, I don't see this having much, if any, effect on customers since it only impacts how the wholesale transaction is done. When I saw the headline, I thought NAD and PSB were going to a direct sales model, as in direct to consumer. That actually would have been newsworthy. But, the sale itself is still conducted by the retailer, so from the consumer's view, they don't see any change even if the behind-the-scenes distribution channels changed a lot.

Among the specialty audio brands, NHT's the only one that's trying to go to a direct-to-consumer sales model while still retaining a dealer network. My understanding of NHT's operation is that NHT's dealers provide space for demos, but even if the customer goes to a B&M store, all of the sales are handled online with the product delivered to the customer. Remains to be seen how well this works.

I would love to know how the NHT model works... Do the stores get paid a commission for the online sales made by customers from their store? Do they just get paid some kind retainer for maintaining a demo room?

The second idea (question) intrigues me... The concept of a store that has no intention of selling you anything, but exists solely as a demo area...

[Woochifer]

I would love to know how the NHT model works... Do the stores get paid a commission for the online sales made by customers from their store? Do they just get paid some kind retainer for maintaining a demo room?

The second idea (question) intrigues me... The concept of a store that has no intention of selling you anything, but exists solely as a demo area...

I don't know the particulars of how this arrangement works. I recall that NHT made quite a stir when they announced that they would convert to a direct mail order model, after years of going only through authorized B&M dealers and prohibiting any mail order sales. I only recently checked and found that they once again have dealers, and read something about how NHT products could be ordered and demoed at these dealers, while the final product gets shipped to the consumer.