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Panasonic To Use Distributors For Smaller Customers

3/12/2004 09:04:00 AM Eastern

New York - Panasonic will halt direct shipments to any retailer that does not sell over $500,000 of its products annually, and move those accounts to distributors, starting April 1.

According to industry sources the company has decided to stop shipping its smallest accounts with the strategy being that it can reduce distribution costs. Sources also said that this is a way to limit the amount of transshipping of Panasonic products to unauthorized retailers.

In a prepared statement to TWICE, Panasonic did not address the particulars of the new plan. It did say the company "will soon announce new sales policies that are intended to improve the service we provide to the dealer community and increase the confidence that consumers will have when they purchase products carrying the Panasonic brand."

Warren Mann, executive director of the MARTA Cooperative of America buying group, discussed the situation with his members and vendors at the organization’s meeting this week in Orlando. "Too many companies have gone this route and have had problems."

Other sources said that Panasonic is trying to make its pricing structure through distributors comparable to selling direct, with the speculation being that the company will still save on costs due to less paperwork, less travel in the field to service small accounts, and other factors.

In its statement Panasonic went on to say, "We are disappointed that some dealers have chosen to speculate that our soon-to-be-announced new policies will adversely affect their business. But we are confident that they will change their minds after they have given us an opportunity to put these new policies into practice."