Becoming a Dealer?

Jeff Lelko

Active Member
Hi all,

Lately I've been tossing around the idea of becoming a dealer for a handful of brands that I commonly buy/rent/use. I own my company (a real LLC), and while sales wouldn't be my primary focus I'm sure I can pick up a few leads here and there in addition to myself. I know that brands vary significantly in terms of initial buy-in, annual sales, and saturation of dealers, but to those here who are equipment dealers along with actually working production, is it worth it?

Chauvet would be one of my first potential ventures, and knowing that we have both dealers and even company reps posting here - any words of wisdom you're willing to share publicly?

Thanks!
-Jeff
 

TimMc

Well-Known Member
Premium Member
Hi Jeff-

From the audio side, "it depends" on the brand and how seriously they take their dealer protection and saturation. One "not USA 3 letter brand" will set up a dealer across the street from you if they have a mail drop address somewhere else. We gave that one up. Some brands are very adamant about your hitting annual purchase commitments (Harman, QSC). Last time we were Crown dealers the annual was well into six figures. If you do installs, you can hit those numbers but at retail? Uh... probably not.

LX? Not my side of the warehouse... but I know Chauvet is good about not flooding a territory with dealers and having very good support for their dealer network.
 

JohnD

Well-Known Member
Fight Leukemia
Over at the other forum there seem to be quite a few smaller providers who are also dealers. Mike Pyle comes to mind as perhaps the largest.
Then there are quite a few who only handle a few lines. So it does work for some.
 

TimMc

Well-Known Member
Premium Member
Over at the other forum there seem to be quite a few smaller providers who are also dealers. Mike Pyle comes to mind as perhaps the largest.
Then there are quite a few who only handle a few lines. So it does work for some.
Mike is a full time dealer, not a noize boi supplementing his gig income with retail sales (although he may have started that way).

The lesson to be learned is that the brands you see *everyone* a dealer for... means they'll set up anyone as a dealer, including your competitors. Just something to think about if one is serious about doing some pro audio retail. From PSW take a look at Jamin Lynch, who set up a "real" pro audio store and found that most of what he had wasn't retail-friendly. You'll sell 20x cheesy powered speakers for each 'quality' unit. I think he quietly closed his store a couple years before the pandemic becasue he couldn't/didn't wish to compete with Banjo Depot for the low end sales.
 

JohnD

Well-Known Member
Fight Leukemia

Jeff Lelko

Active Member
Thanks for the input John and Tim. I've been a customer of Mike's many times and think I bought some dimmers from Mr. Lynch back in the day.

I agree that running a storefront isn't particularly viable and that being a dealer for installs is where the profit is to be had. I posted this question over here versus PSW as I know we have more brand reps here versus there, but it's the same discussion regardless. My interest in becoming a dealer for select brands is more than just to have access to dealer pricing and sales potential but more so for the service and resources.

An example was when a Prolyte order of mine got caught up in the company's restructuring - it would have been nice to have a direct line to the distributor for updates versus having to bug my dealer for a status, not to mention that regardless who I buy from it's all coming from the same warehouse. The same goes for troubleshooting a fussy moving light that I'd like warranty service on.

Many companies have great customer service and work directly with the end user which I really appreciate - I'm just trying to see what I can streamline for the brands I regularly buy/rent/use...especially since it's usually just a dropship request considering that I don't need dealer installation services or anything. Thanks again!
 

Pie4Weebl

Well-Known Member
Fight Leukemia
It's a mixed bag on how quickly people will open you up. I think we had an easier time than a lot of people knew of our work before we wanted to become dealers for brands. $50k/yr is what I have seen from some lighting companies while a certain Italian brand told me I need to do a million in cash before they would open me. No thanks to them. If you do consistent buys it can be worth it, but we still buy through some dealers for other brands. YMMV
 

Kristi R-C

Well-Known Member
When you sell enough of a product, the manufacturer may make you an offer. Sort of our version of “if you build it, they will come.”
 

Craig Hauber

Active Member
I do mostly integration now and we use a lot of wholesale supply houses that don't sell to the general public or sell advertise online themselves. The overhead they add is well worth not having to maintain your own dealerships. On some items their markup still nets a cost equal or lower than the first column price you get stuck with (because you may only need that particular product once a year and can't be saddled with an inventory of it)
I also don't want to force products I really don't care for onto clients just to maintain a minimum order amount. I want to pick and choose quality products from multiple different manufacturers that best fit the overall system for the benefit of my clients. Having to keep up with all of their quotas would force me to become an aggressive high volume salesman and not stay within the scope of what I'm really good at (and prefer doing) So I let someone else take that burden and pay a tiny bit more for that privilege.

This also ties in with the "if you build it, they will come", if you start moving a ton of a certain product the manufacturers suddenly start noticing you, then the wholesaler doesn't want to lose you to them so they start passing on even more savings.

However, since design, labor, logistics and service contracts are where the real profit is, the amount you make on having dealer pricing suddenly doesn't seem that important in the whole project cost.
 

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