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UPP And Other Pricing Programs Are Working

3/24/2013 08:00:00 PM Eastern

TWICE: What is the current status of UPPs and other similar types of programs in the marketplace now? Are suppliers expanding the programs? Are these programs succeeding in the marketplace?

Rick Sanchez, SED International: Samsung has enforced the UPP on their higher-end televisions to prevent end users from finding a better cost elsewhere. Sony has also followed suit and done the same.

By enacting this policy, Samsung hopes to slow the HDTV price erosion that contributed to recent record losses by Panasonic and Sharp and lower profits of TV retailers like Best Buy.

Because of this fixed pricing, Samsung is currently the No. 1 volume seller of HDTVs in the U.S.

Tim Coakley, Ingram Micro Consumer Electronics: UPP has been a significant success for [Ingram]. The UPP program has resulted in stabling pricing and creating increased profit potential for [our] dealers.

Jerry Satoren, DSI Systems: I think these programs had some positive impact in 2012, but not enough. If you really look at results, I think it is safe to say the 2012 was a better year for the bottom line. While 2012 was better, I think that these programs fell short of delivering the intended result — that is, provide dealers with a profit that is commensurate with the services they provide to manufacturers and consumers.

With a look to 2013, most manufacturers are expanding these programs, and, of course, that is a positive. In the end though, those with the discipline to execute the programs will be the winners and will garner support. The ones that abandon or fail to enforce when inventory gets a little high, or some other short-term issue arises, will continue to slide.

Dennis Holzer, PowerHouse Alliance: Several manufacturers have expanded their programs, while at the same time, many are beginning to put in UPP and other similar type programs. The programs are certainly helping. The success of these programs remains, that if not adhered to, there must be significant consequences so the action is not repeated. In addition, it also sends a message to others to stay in compliance.

Fred Towns, Synnex’s New Age Electronics and Jack of All Games divisions: Those who have skin in the UPP game stand behind it. Most retailers struggle to make margin. UPP helps set baseline margin and allows retailers’ sales teams to tell a better story focused on the technology of the product vs. price alone. UPP also keeps parity between brick-and-mortar and online retailers.

Wally Whinna, Allnet Distributing, (Catalyst AV member): Vendors are expanding the use of UUP. Dealers like these programs and are encouraging greater implementation. It not only protects their margin but serves to even the playing field vs. online resellers.

Warren Chaiken, Almo: All indications are that UPP and other initiatives designed to create more stable pricing in the marketplace are working. These programs have proven to be especially beneficial for the independent retailer. Manufacturers that committed to UPP last year remain committed going forward, and having seen the success, other manufacturers appear to be ready to follow suit.

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