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Distributors Riding Full Throttle Into Q4

The stars are largely aligned for brisk holiday sales.

The stars are almost perfectly aligned for the upcoming holiday season, leading tech and appliance distributors tell TWICE in our annual pre-season report.

Low unemployment, surging consumer confidence and a wellspring of cool new products should make for another holly, jolly Christmas they said, led by affordable 4K TVs, pan-platform smart speakers, big and small appliances, and all manner of iPhone accessories.

But they did say almost. Distributors, who serve as a critical link in the tech and majap supply chains, can’t help but worry about the impact of import tariffs as the Trump administration attempts to righten trade-relation wrongs.

See: Appliance Price Hikes Likely After Latest Round Of Tariffs

 While industry consensus points to Q1 2019 as the flashpoint, Almo’s Jack Halperin argues that higher prices could dampen spirits as early as this holiday season, while the mere threat of more duties makes it tough for vendors, distributors and retailers to plan ahead for next year.

But tariffs and the usual margin-crimping Black Friday sales aside, distributors are still gearing up for a successful sleigh ride in Q4.

TWICE: How’s business holding up as we head through the fall? Will the momentum carry into Q4?

Seth Evenson, customer experience management director, AVAD: Over the last year we’ve seen an immense growth in our business and we anticipate that will continue through Q4 for both retailers and independent contractors. The technology available to dealers today has drastically increased in capability and reliability with decreased complexity and cost, allowing a greater audience to integrate control into their homes or businesses.

We continue to partner with new vendors and strengthen relationships with existing vendors to provide our dealers with the best solutions on the market. We’ve added new vendor partners such as Bose, Heos, Samsung, LG and more, to provide our dealers with industry-leading, reliable solutions their customers will find value in.

Jack Halperin, senior VP, dealer channel division, Almo: As we head into the fall, the core fundamentals surrounding the U.S. economy and many of our business segments remains solid. Unfortunately, potential China tariff implications for finished products and parts have become a sizable distraction across our all of our divisions. The uncertainty around magnitude, duration and related product/part inclusions associated with the latest round of tariffs have made it extremely difficult for dealers, manufacturers and distributors alike to plan for Q4 and the start of 2019. There is a strong possibility consumers could be seeing sizably higher prices for many products this holiday season versus this time last year. We’ll ultimately have to wait and see what impact this has on Q4 business.

Andy Zeinfeld, global president, Brightstar Echo and Gear: I believe this is the most exciting time of the year as far as the wireless business is concerned. That’s because new products are introduced in the fall. It’s also the time of year when accessory sales get strong, and that strength continues all the way through the holiday season. Frankly, most lines of business get a lot busier around this time.

In short, this is the time of year when wireless creates buzz, drives greater interest in the category, and generates greater opportunities.

Curt Hayes, president/chief financial officer, Capitol: Business is strong and growing every day. The advent of new products that tap into the potential of the connected home is giving our customers a whole range of new opportunities for building business with new and existing clients.

Helge Fischer, executive director, Catalyst AV: The Catalyst AV business over the summer has been brisk and in the past year we have added territories and warehouses to our distribution network. We have aligned new lines, constantly improved our service level and the technologies we offer, and we work hard with our vendor partners to offer solutions and price points. All these initiatives establish the foundation for a very upbeat beat fourth quarter.

Trevor May, executive director, vendor management, D&H Distributing: We’re getting indications from D&H customers that this holiday will be strong. Economic indicators would lead us to believe that the critical selling season will produce good results. It was also just announced that consumer confidence is at an 18-year high — another strong indication the holiday selling season should be healthy. The one concern on the part of dealers that might affect retail holiday enthusiasm is around the new tariffs.

John Yodzis, president/CEO, Dow Electronics: Coming off the heels of our first Annual Dow Elite Dealer Retreat, 2018 MEA [Mobile Electronics Association] Distributor of the Year Award, and recently expanded territory with Samsung, we feel that this will be the busiest holiday season that Dow has ever experienced. We are continuing to add more and more customers every day [and] are very excited about the momentum continuing into Q4.

Fred Towns, president, New Age Electronics: Business continues to be good due to high consumer confidence and a strong economy, and we expect this momentum to carry us through the end of the year. While the industry isn’t quite ready for the next wave of innovation around areas like 5G, AI and improved AR/VR offerings, there’s enough buzz around other categories to make for a successful holiday season.

Tate Morgan, president, Petra Industries: Moving into Q4, Petra continues to see steady growth. Omnichannel customers in our traditional brick-and-mortar sector, as well as e-commerce, continue to drive business.

One of our strongest areas of success has been promotional opportunities. Our sales organization has worked hard to create many great promos leading into the holidays that will set up our customers for success and create savings consumers will not want to miss out on.

Dennis Holzer, executive director, PowerHouse Alliance: Business continues to be very strong across all product categories we carry, and we are anticipating a strong fourth quarter for all members in the alliance.

We recently added new product categories to our A2V house brand, including HDMI cables, subwoofers and outdoor speakers, which has drastically increased the scope of our product offerings. The response to A2V has been extremely positive and orders for all A2V product categories, plus our tier-one branded products, has been consistently strong across the country. We have plans to continue introducing both branded and A2V high-quality products in Q4 and into 2019 in order to meet the needs of our dealers and integrators.