Home Entertainment Source (HES), the A/V specialty arm of the AVB/Brand Source buying group, held it first buying fair last week and added eight premium brands to its national warehouse distribution program.
The HES Summit and 30-vendor Buy Fair at the Marriott Marquis, here, ran concurrently with AVB/Brand Source's general buying convention, which featured more than 125 CE, major appliance, furniture and bedding exhibitors.
HES enjoyed sales of nearly $600 million last year and projected 2004 revenues are $700 million. The group, which supports such specialty lines as Klipsch, Marantz and SpeakerCraft, is comprised of some 300 A/V and custom install dealers with annual sales ranging from $1 million to $15 million. HES has added 40 new members during the past six months.
Their combined buying power has made HES the 11th largest Pioneer dealer in the nation for allocation, he noted, and has helped the group secure 1,000 specialty model Samsung DLP displays in 46-inch and 56-inch sizes.
Other HES benefits include electronic online ordering, a forthcoming forecasting program to help ensure appropriate allocations, advertising and promotional tools. HES has also added two national membership managers — Sherry Dantonio, a former buyer at Definitive Audio, and former PARA manager Jeannette Howe — who serve as full-time dealer liaisons.
HES members can also partake in programs offered by the $4 billion, not-for-profit, member-owned AVB organization, including extended service plans, insurance coverage, turnkey store fixtures and store design, and the national Brand Source branding program.
The Expert Warehouse program, introduced six months ago, enables HES to take national account-size shipments directly from participating vendors, and to share the preferred pricing and allocations with authorized member dealers. The group has three distribution centers, operated by a third party fulfillment house, in Atlanta, Reno, Nev., and Hackensack, N.J.
The arrangement, explained HES general manager Jim Ristow, allows smaller dealers to participate in vendor-direct programs with prohibitively high order requirements, while helping manufacturers distribute their wares to qualified retailers in a controlled manner. Dealers also receive free shipping on deliveries of $5,000 or more, and can mix and match their orders to meet the minimum.
"Suppliers want to sell to our guys," said Ristow, "but they just don't have the infrastructure anymore to do it." Conversely, by buying as a national account, "We can then sell goods to members at or below sheet price." This allows dealers to price their products more competitively than distributor-sourced goods, which generally carry a 6 percent to 10 percent mark-up, he said.
The warehousing approach also relieves dealers of carrying costly big-ticket overhead, which can depreciate quickly as marketplace pricing erodes, Ristow noted.
The new line additions include Bose, Hitachi Director's Series, JVC, Optoma, Pioneer and Pioneer Elite, Sharp's SharpVision and Yamaha Concert Series. They join a current brand lineup that includes Apex, Panasonic, Samsung, Sharp and a number of opening price point brands for flat panel displays.