What kind of qualifications do manufacturers typically require for a large purchaser to secure dealer cost? I spoke to a local Shure sales rep and he said, somewhat indignantly, that there needed to be a brick and mortar location, and that the company needed to sell other pro audio equipment. That doesn't quite sound right, so I was curious what other folks' experience was with Shure. Could they be convinced to let a company that is not a pro-audio provider but uses lots of pro audio gear buy at dealer cost?
Dealer agreement flexibility
- Thread starter Daniel Postilnik
- Start date
Silas Pradetto
Graduate Student
Re: Dealer agreement flexibility
Not likely. If every person needing microphones or every production company could get dealer cost by signing a few papers and buying mics for their own inventory, everyone would do it. Most manufacturers have yearly minimums and have a minimum opening order - and that's just to get signed up at regular dealer cost. Often regular dealer cost is very close to what online sellers like Amazon are selling at (and while the online sellers are violating MAP, no one seems to care). To get really good off-sheet deals, you need to buy large quantities. In the case of Shure, the deals start happening in the "hundreds of mics" range.
There are plenty of distributors out there selling at dealer cost to businesses that are just buying for their own inventory. PM me and I'll shoot you a list.
Not likely. If every person needing microphones or every production company could get dealer cost by signing a few papers and buying mics for their own inventory, everyone would do it. Most manufacturers have yearly minimums and have a minimum opening order - and that's just to get signed up at regular dealer cost. Often regular dealer cost is very close to what online sellers like Amazon are selling at (and while the online sellers are violating MAP, no one seems to care). To get really good off-sheet deals, you need to buy large quantities. In the case of Shure, the deals start happening in the "hundreds of mics" range.
There are plenty of distributors out there selling at dealer cost to businesses that are just buying for their own inventory. PM me and I'll shoot you a list.
Re: Dealer agreement flexibility
You cannot purchase directly from most manufactures no matter how large the order. Manufactures don't make just anybody a dealer. You have to prove that you are a "real" company in it for the long haul. Not just here today gone tomorrow.
What you were told is pretty much correct.
You cannot purchase directly from most manufactures no matter how large the order. Manufactures don't make just anybody a dealer. You have to prove that you are a "real" company in it for the long haul. Not just here today gone tomorrow.
What you were told is pretty much correct.
Re: Dealer agreement flexibility
Daniel,
The problem is that Shure already has a large and well established retail network. I am also sure that a large portion of their funds come from retail sales. They would be crazy to screw one of their brick & mortar retailers out of exactly the kind of sales they're set up to handle so they could make a few extra bucks off every live sound guy who wanted their product. That would rapidly wreck their operating margin by forcing them to gear up for onesie-twosie shipping out of their warehouse, not to mention the customer service interactions.
In our warehouse, for example, our shipping department can clear an entire pallet in about the same time it takes to put together 4-5 drop ship items to go by UPS.
Daniel,
The problem is that Shure already has a large and well established retail network. I am also sure that a large portion of their funds come from retail sales. They would be crazy to screw one of their brick & mortar retailers out of exactly the kind of sales they're set up to handle so they could make a few extra bucks off every live sound guy who wanted their product. That would rapidly wreck their operating margin by forcing them to gear up for onesie-twosie shipping out of their warehouse, not to mention the customer service interactions.
In our warehouse, for example, our shipping department can clear an entire pallet in about the same time it takes to put together 4-5 drop ship items to go by UPS.
Re: Dealer agreement flexibility
There is nothing wrong with making a profit-businesses have to in order to stay in business-pay employees-rent-insurance and so forth.
If they are losing sales to people who do not have those expenses-then why should the other people even bother?
Often there are limits to how many dealers there can be in a certain area-again to help support the people who are actually selling product.
The manufacturers do not lose any sales (you would buy the product anyway)-but help the local real dealers make a profit so they can sell more product.
There are often a number of different factors that dealers have to deal with. Part of this is the benefits that come with being a dealer-and understanding that the manufacturer will not be just "selling to anybody" so they will be able to make a profit and stay in business.
There is nothing wrong with making a profit-businesses have to in order to stay in business-pay employees-rent-insurance and so forth.
If they are losing sales to people who do not have those expenses-then why should the other people even bother?
Often there are limits to how many dealers there can be in a certain area-again to help support the people who are actually selling product.
The manufacturers do not lose any sales (you would buy the product anyway)-but help the local real dealers make a profit so they can sell more product.
If you are a legit business and registered with your respected state, etc, then the easiest way to accomplish better pricing and resale opportunities is to get with a distributor. You will still have to have the correct documentation and licenses and abide by MAP policies, etc, but you won't have the minimum buy ins and general upkeep and commitment to a single brand.
It you are not a legit business then you are just asking for someone to sell you gear at cost, which is not a reasonable request.