Pricing, Pipeline Still Volatile

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TWICE:Are you anticipating shortages in any categories? How will you compensate?

Rob Eby, director of purchasing, D&H Distributing: Possibly gaming consoles, and there is no way to compensate from the distribution end, since the manufacturer controls supply. We anticipate high demand for both PS 3 and Wii, which in turn will result in inventory shortages. There will be at least some shortfall in most of the hot categories. However, as a dealer, if you plan and forecast, you should be able to get most of what you need — with the exception of the consoles, where only a limited supply is expected.

Henry Chiarelli, senior VP, marketing and merchandising, DBL Distributing: Our manufacturers have been very responsive in working with us, as we have prepared for the holiday buying season. We have taken advantage of some extraordinary special purchase opportunities and we have created “one-of-a-kind” deals for our customers, which are exclusive to DBL. We have added significant pick, pack and ship capacity in our warehouse and we are prepared for a very robust holiday season. Other than several specific allocation issues related to flash memory (2GB Micro SD and Memory Stick Micro product), we do not expect any significant shortages.”

Rob Kalman, VP, U.S. marketing, SED International: We are not anticipating any shortages.

Fred Towns, senior VP, New Age Electronics: Last holiday season we saw big shortages in flat panel products. I think everyone learned from that experience, and suppliers have ramped up capabilities on certain products for this year. We expect to see a shortage in the availability of notebooks, even with the delayed release of Vista, because the consumer demand is so strong. We're working with customers to set expectations for availability, so they have accurate data on what to promote.

Kevin Kelly, VP sales and marketing, Stampede: There will be shortages on flat panel displays for those retailers and dealers who have not already secured goods. To compensate, we have already placed large orders last quarter with our suppliers to guarantee a steady supply for our retailers and dealers.

Warren Chaiken, president/COO, Almo: Right now, we do not anticipate shortages in any of the major categories. However, availability on plasma panels has been hot and cold all year. There is no way for us to be certain that either a change in the demand or the supply could tighten up availability as we get further into the fourth quarter. We plan to be in a good inventory position for the fourth quarter, but no one wants to be long in this market given the opportunity for severe pricing changes.

Bill Stewart, president, Petra: The whole flat panel market will be tough this year. These significant price drops definitely cause a spike in demand, and the market will certainly feel the shortages. Satellite radio and GPS might be another place you'll see some difficulties. We sat down a few months ago and forecasted our fourth quarter in all of our categories. We shared our forecasts with our suppliers, and have already booked orders through the end of the year to make sure we cover our customer base of more than 30,000 because it is important to us to have the products immediately available when our customers need them so they can have a successful fourth quarter.

TWICE:Are you anticipating any further price moves by vendors?

Kelly: Yes, often times in reaction to moves made by competitive manufacturers. We will continue to see price drops on value oriented flat panel displays and projectors — especially for Black Friday.

Eby: As the pipeline continues to fill, we anticipate that prices will drop to move product. Once supply increases, pricing for standard technologies tends to erode as the new technologies come to market. Manufacturers will probably make at least one more move to get their pricing in line in order to be competitive for Q4.

Chiarelli: Pricing is stabilizing… we do not anticipate much upward or downward price movement for the balance of the season.

Kalman: On HDTV's, with significant drops across all vendors.

Towns: The supply of flat-panel products is very strong this year, based on the shortages from last season. There may even be an abundance of products in larger screen sizes, and if consumers don't buy at the current price point, I expect that prices could fall by the holidays.

Chaiken: If panel capacity remains high, we will see further price moves.

Stewart: Prices continue to move, and we hope to see even more vendors lower their pricing so we can pass along the savings to our customers.

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