New Age Electronics Shows CEDIA Cost-Cutting Moves

INDIANAPOLIS— New Age Electronics, the computer/CE distributor based in Carson, Calif., visited CEDIA Expo earlier this month, here, to show custom installers — and vendors — how its sales and supply chain solutions can help cut costs and increase margins.

Senior VP Fred Towns, a 27-year veteran of the CE industry who left Panasonic after more than two decades to join New Age last January, visited CEDIA. He explained to custom installers and retailers that as consumer electronics and computer technology finally converge, there is a role for his company to help profitably sell digital products. As he put it, “It no longer makes sense to display product categories in isolation.”

New Age, which was founded in 1988 and for many years specialized in the computer business, now has 20 percent of its business in consumer electronics and a combined total of around 1,500 retail accounts, which includes 74 of the top 100 CE retailers in the United States.

Towns said that when he joined New Age, “I had a CE industry background, and I wanted to see what the computer side did well, since convergence is upon us. I wanted to know what we could be doing better for the CE side of the business and offer a better solution.”

The strength of New Age is that “we manage the supply chain for our customers,” Towns said. “We take the PC lessons and use that for CE in forecasts. We have weekly conference calls with our suppliers and retailers to discuss trends and share information.”

Towns said that one of the key challenges in the market today is that “digital products' prices change almost daily. It occurs in plasma TV, and retailers must have the proper product mix and pricing. As a manufacturer, how do you do that and still reduce costs?”

He noted that New Age handles “direct shipping, which is a virtual hub for some partners. We can handle product price changes in our facilities and manage that. Retailers are more cautious on pricing than ever before. We are able to change prices and minimize cost on that at our facilities.”

In addition, New Age has weekly “collaborative phone calls” with retailers and manufacturers. “Our conversations are about how to 'sell-through' to consumers, not just 'sell in.' We can provide better information based on our experiences with the many suppliers and retailers we deal with.”

New Age also provides other services such as “remanufacturing or refurbishing goods. We are not just about buying and selling,” Towns noted.

In many cases New Age replaces the manufacturers' and retailers' distribution center, which minimizes freight damages through fewer touches, eliminates the order entry process, decreases overall administration costs and reduces fuel costs. As Towns put it, “The bottom line is that we present solutions to increase margins.”