Reselling A/V Gear

[roussell]

So, what do small integrators do about selling clients A/V gear? I'm just starting out, got a few clients lined up and have been specking equipment for installs but I'm not sure how the resell-thing works for a small business owner.

Are there wholesale places that anyone can recommend, or do I have to go to each company and try to setup an account directly through them? My concerns are since I'm just starting out the big boys won't give me a second look. I know buying from a standard retail-type store won't work because I'd have to resell as "used" and that can't be popular with clients. So to sum, I suppose my questions are:

1. Where do I go as a small business owner to buy, and then resell new audio and video equipment?
2. What are the product warranty implications of the above answer?
3. Do I need to offer support (repair shop) in order to sell or can that be done by another company?
4. What are the gotchas that I need to watch out for.

I've googleed until my fingers are numb and can't find anything definitive and the local shops around here are not willing to help out a new guy with these type of questions (no surprise there). I'm not interested in setting up a brick and mortar store front just yet and will keep little to no inventory until things really get rolling. I would like to offer Denon, Onkyo, Klipsch, Polk, Sonnace, Velodyne, Russound, BreatheAudio, and maybe a few others to start.

I've got the tax ID and all the other legal stuff out of the way (I think) , just not sure what to with the stuff above.

So, what's the best way to approach this starting out to be able to offer a good price to my clients, make a few bucks and keep my butt covered along the way?

Thanks in Advance!

Terry

 

[samgreco]

roussell,

First, thee are usually manufacturer's reps that handle a territory. Sometimes they work directly for the manufacturers, sometimes they are independent and handle multiple brands of products. You should contact the manufacturer directly and ask them how to proceed. They will give you the info on the rep if they have them. (I used to be one :lol: )

Most will have you go through distribution when you are starting. But many times you will still need to be authorized to carry some brands. I know many of the lines you mentioned are to be sold only through authorized dealers.

Finally, check out CEPro.Com. It's the online version of CEPro magazine. You will find many distributors and suppliers advertising there. AVAD and D&H are a couple.

Just remember that you are never going to get as good a price as the bigger competition in your area. Not until you buy enough. So I always recommend that a new reseller/installer not try and carry too many brands early. Try and buy more from fewer suppliers in the beginning to gain some buying power from them. Just be sure they are quality and that they will stand behind you and their product.

 

[Neurorad]

You should spend some time at remotecentral.com custom installers lounge forum.

Here is a relevant thread there:

http://www.remotecentral.com/cgi-bin/mboar...hread.cgi?19969

I posted a link in that thread that may be useful to you:

http://www.customretailer.net/article/at-a...scipline-406225

 

[roussell]

Thanks for the info guys - I'll read through all of what you posted. I've started a small company that actually focuses more on industrial automation but through word-of-mouth I've gotten several people wanting residential installs so I'm trying to gear up to do that correctly without taking too much focus away from the core business. Although IMO I'd be a fool to ignore the requests that lead me in a different direction, after all Yamaha started out only making pianos.

Thanks again,

 

[pete_c]

Terry, I just completed ( a few months back) an audio install in a Dental office for a friend. I put speakers in every room and a distributed amplifier. The amplifier was used and the speakers and keypads were new. Relating to warranty on the used amplifier I gave her a one year warranty stating that I would replace it should it fail in a one year period (no charge - but she's a friend). This endeavor served as an introduction into some automation into her new office. I also had the advantage of working with the contractor, looking a drawings and making a "few" proposals to said design. I've also set up the office for a "few" LCD monitors placed in front reception area and a couple in the back offices.

As it was more of a favor than a for profit endeavor her (dentist) costs were minimal and actually about 1/4 of 4 other quotes for same. I paid a 3rd party to do the cabling. I used plenum rated cabling (cat5 and 16/4) and that piece was the most expensive.

Worked out for her. I am taking her office to the next step by putting in Internet audio. She doesn't want to have recurring costs of satellite (she is already paying for an ISP). Noticed the radio reception is nil in the office so installing an internet radio for her. (its a very slow migration to some automation in her office).

 

[roussell]

Thanks Pete, one of these installs is actually for a friend as well so I had thought about just pointing her to the best deals and letting her order the stuff and then putting it in. She lives in a very affluent part of town and entertains a good bit so a good install could provide some nice free advertising. I had also thought about buying some of the critical items myself and then providing the warranty (either from my own pocket or through something like squaretrade-if that's possible) For the items I'm specing I have a lot of experience with and trust their reliability (Denon, Russound) once past the burn-in period but don't want to do anything that's unethical or illegal. Obviously that isn't something I'd want to make a habit of doing, but I wonder if it makes okay business sense in certain cases. There will be some items that I'll be warranting anyway - things that my company has custom built so I don't think it's too far-fetched, as I mentioned though I want to stay above-board on anything that I do.

Terry

 

[pete_c]

The dentist was on a very tight - showstring budget. Most of her costs involved digital x-ray machines and software.

The cost of said above mentioned infrastructure & contruction (dental this and that) was astronomical; so there was not much left in the "bucket". I told her up front that I would purchase a used amp to keep her cost down - she totally understood.

The entire office is wired for all.

I purchased all of the equipment needed. In that she was just starting I asked her to pay me at her discretion when the time was right.

 

[drvnbysound]

From my experience, as far as payment is concerned, most companies who do home or commercial A/V work collect a percentage upfront (for a couple of reasons including some money to assist funding equipment) and them the rest upon completion of installation. I assume on bigger jobs you could even have it broken down to a lower level with specific Phases designated.

It's certainly an eye-opening experience when someone you know pretty well doesnt pay up. There was a group of jobs I did 4-5 years ago for 2 families that included 2 homes and 2 commercial facilities - simply doing 5.1 in the homes and multi-zone audio (8 zones, 1 source) in the commercial installs. The first man referred me to the second and I thought I had a good relationship with both of them. I got paid 100% for the first home and both commercial installs, but only a percentage for the second home. I think the guy still owed me somewhere around $450 - which was mostly all labor. It would have cost me that or more to take him to small claims court over the money and wasnt worth all the effort I put into trying to collect over the next 2 years. I finally gave up and moved on

 

[pete_c]

Is that a typical 1/3 depo, 1/3 in the middle and last 1/3 upon completion (30 days?).

Many years ago the first 1/3 paid for HW costs, 2nd paid labor and third was mostly profit....that was with a 35-40% markup in wholesale HW costs.

 

[opie]

Worked out for her. I am taking her office to the next step by putting in Internet audio. She doesn't want to have recurring costs of satellite (she is already paying for an ISP). Noticed the radio reception is nil in the office so installing an internet radio for her. (its a very slow migration to some automation in her office).

Pete, It's been a while since I've dealt with this so I'm a little fuzzy on all the laws but it is possible you friend will need to pay ASCAP fees for paying music in her office. One of the thresholds is the number of speakers in a room, but I don't recall the exact limitations off hand. XM for business is one way to take care of this but I'm not sure how Internet Radio would play into this. Just something to look into so she doesn't get a surprise later.

 

[JoelAs]

AFAIK you can buy the gear (haggle to get the lowest prices), sell it to the customer at a slight markup, charge them for install (pure profit), and then tell them that the install work is covered for 6 months and the hardware has the manufacturer's warranty.

If the hardware dies within 6 months and it's at all related to the install, you take it on the chin and do all the hardware warranty/install work free. If it isn't related to the install then you charge an hourly rate to do the warranty, and be very up-front about it, leave the customer the option of doing the install work themselves and hand you the hardware to warranty for free.

If the hardware dies outside of 6 months you bill for your time, and any warranty related charges like shipping/handling. If it's out of the hardware's warranty date, you sell them something new/better and charge them a discounted install fee as a kind gesture.

Never had any problems with that.. ?

Worked out for her. I am taking her office to the next step by putting in Internet audio. She doesn't want to have recurring costs of satellite (she is already paying for an ISP). Noticed the radio reception is nil in the office so installing an internet radio for her. (its a very slow migration to some automation in her office).

Pete, It's been a while since I've dealt with this so I'm a little fuzzy on all the laws but it is possible you friend will need to pay ASCAP fees for paying music in her office. One of the thresholds is the number of speakers in a room, but I don't recall the exact limitations off hand. XM for business is one way to take care of this but I'm not sure how Internet Radio would play into this. Just something to look into so she doesn't get a surprise later.

 

[samgreco]

AFAIK you can buy the gear (haggle to get the lowest prices), sell it to the customer at a slight markup, charge them for install (pure profit), and then tell them that the install work is covered for 6 months and the hardware has the manufacturer's warranty.

The only issue you may have with this approach is if something happens to an item they purchased from you, on your invoice, and they take it in for warranty repair and you are not authorized to sell that product, they may not get a warranty. Not all manufacturers are that strict, but some are. I think that Russound and Denon do that. I know there are others.

And if that happens you will have an unhappy customer.

 

[drvnbysound]

The only issue you may have with this approach is if something happens to an item they purchased from you, on your invoice, and they take it in for warranty repair and you are not authorized to sell that product, they may not get a warranty. Not all manufacturers are that strict, but some are. I think that Russound and Denon do that. I know there are others.

And if that happens you will have an unhappy customer.

That is something that you would really need to be upfront to the customer about - and will really depend on how you acquired the item in question. It is possible to purchase equipment from a distributor and still not be an authorized reseller of that product. However, in those cases usually the distrubutor handles any warranty issues and you can send the equipment back directly to the distributor and get a replacement - and they deal with the warranty with the manufacturer themselves. If this is the case, you just need to be upfront with the customer and be sure that they contact you about any warranty issues - and usually they will anyways, assuming the installation went well and the customer is happy and satisfied. Usually when they have issues, you will be their first phone call, and you will likely be the one doing the troubleshooting anyway.

That said, if you are purchasing from a distributor who may sell out of their territory (up to them to risk) and to a non-authorized dealer, and a end user contacts the manufacturer for a warranty issues, many times the manufacturer can and does track serial number to that particular distributor and may give them a slap on the wrist for doing so or may even go as far as moving their business to another distributor. I can see where all of this can get very touchy, in which case it's always best to be upfront about any such details. Assuming you are providing the customer with a product they are happy with, along with a good price on that product, it's rare that you will get many complaints.