Benicia, Calif. — Home-speaker supplier NHT, which went on hiatus earlier this year to ponder its future, has returned to the market with an Internet-based business model that combines B to C and B to B marketing in an unusual way.
Under the new strategy, consumers buy NHT products factory-direct through NHT’s Web site or through authorized online and brick-and-mortar retailers and installers. Whatever the point of purchase, the purchased product is shipped directly to the consumer from NHT’s warehouse. “If a dealer wants to inventory product, that’s OK, but we are not finding that to be a priority any longer,” NHT co-founder Chris Byrne told TWICE.
In contrast, home audio companies typically go to market in one of three ways, he said. “There are companies that follow the traditional channel approach, using reps, distributors and trainers, and there are online companies. Some of the traditional companies also sell their products direct but pretty much at retail price so as not to upset their dealer/distributor base.”
“Our path is more of a hybrid,” Byrne continued, “and that makes it a little different than most others because it’s B to B and B to C while still offering the advantage of value-based online pricing.”
The distribution strategy eliminates rep and distributor costs and dealers’ inventory costs, enabling NHT to “permanently reduce the price of our speakers by as much as 30 percent from their original suggested retail,” Byrne said. “We managed to come up with a cost structure that serves the margin requirements of our existing dealers but still allows us to offer really nice savings to the consumer,” he added.
“Shipping direct from here is cheaper for everyone, greener and the product has a much better chance or arriving in one piece,” he added.
NHT previously sold through a number of online partners as well as brick-and-mortar retailers and installers, and “each of our customers has embraced what we are doing and doesn’t feel competition is an issue,” Byrne contended.
For NHT, the strategy allows the company to market directly to consumers as well as through partners, and it frees up resources to develop new product categories, Byrne said. “We can redirect those resources at products in broader applications and market them ourselves through our own site and our network of online retail partners. We can work on desktop, wireless, simple DSP correction, headphones or any new product category that we think we can impact.” The strategy “is like new life for us, and it offers affordable methods that we can actually pull off.”
The same Web site, www.nhthifi.com, serves consumers and dealers. “Dealers are given a password so that they can see reseller pricing. Consumers set up their accounts when ready to buy,” Byrne explained.
The company’s currently available online products are the Classic and Architectural series of speakers. The first new products are due around the beginning of 2010.
NHT began life in 1986 as a co-venture of Byrne and speaker designer Ken Kantor and has been owned by multiple companies since then.