The rules of engagement for selling head units are shifting due to their new-found popularity and, unfortunately, scarcity.
Retailers who wouldn’t think of doing so before the pandemic are selling at suggested retail price rather than the minimum advertised price (MAP). Retailers are turning away customers who walk in with their own radios because they are too busy with other full-paying customers. Conversely, when a customer wants a large system and the only thing blocking the sale is a radio the retailer doesn’t have in stock, he might tell the customer to pick one up online.
Some dealers are reserving a few key models in the backroom for those special clients or high end builds.
In fact, Nate Kubicz of Car Tunes in Detroit, MI asks why manufacturers are still posting MAP pricing on their websites. “We’ve asked them to put suggested retail pricing on their site. It doesn’t make sense to advertise MAP and not have any product to sell.”
He added, “A month ago, I spent a day and a half determined to find radios. I didn’t care how much I had to spend. I called the 12 biggest distributors in the country attempting to buy hundreds of radios and I was able to get 8.”
Car Audio Express in San Jose, CA is now selling at MSRP with no discounts. “We were MAP before the pandemic and if someone bought a large system, they got a discount. Now it’s full price MSRP,” said Bashir Assi.
Street Smart Automotive Solutions, Flowood, MS is so short on decks, it won’t sell one unless it goes into a full audio system.
The shop is also moving more deeply into digital signal processors (DSP). “We’ve had a record-breaking DSP year. We’ve sold one every week this past year…We’re the only one in the state that’s skilled in how they are supposed to sound. We’ve gone from a car audio shop as a whole, to a high end DSP shop because that’s pretty much all we do,” said President Rick Arnold.
The shortage is helping Arnold and other retailers move customers into high end radios and DSPs because supply is simply running dry in low- to mid-priced radios.
Santa Rosa Cartunes, CA now requires customers to buy the mounting kit and speakers when they buy a head unit over the counter.
Joey Knapp, Owner of Pinnacle Autosound, Lake City, FL now limits over-the-counter sales (althout it allowed them prior to the pandemic). “My worst fear is for people to come in and we don’t have something to sell. I’ve tried to stay on top of inventory, our inventory is five times what it was pre-COVID.”
Retailers are also reserving some radios for specials builds. “Before Christmas, we were able to get a small amount of Maestro-based radios. I don’t put them on display and I don’t talk about them. I pull them out if needed for a full system that requires Maestro,” said Westminster Speed of Sound’s Mark Miller said, referring to the iDatalink Maestro that can retain factory features such as OnStar or Sync. He added of the coming months, “It’s going to be an interesting world.”
Bucking the trend is Tom Sweere of Beach Autosound, CA. “Maybe I’m missing the boat; I’m selling stuff for MAP and I’m not going to mark it up if someone comes in with money. …. As far as profitability goes, our margins have eroded enormously over the years. We’d all like to get some of that back, but right now, during a pandemic, it’s taking advantage of people.”
I do not understand. MAP = Minimum Advertised Price, MSRP = Manufacture Suggested Retail. The whole purpose of these pricing (guides) strategies are designed to maintain profit margins for the retailer and to create a certain level of product loyalty from the consumer. During times like this when there is uncertainty and limited inventory available and in our stockrooms it is important to maintain our profitability. Selling at MSRP or more for that matter is not taking advantage of people. Especially if your store has the ability to add value to the sale that is over and above their competitors. Not to mention that procuring inventory during these time takes longer and is costing more money. There are radios and other products that I am purchasing without my normal discounts, and I am paying shipping fees that I would normally not have too. I designed my store to support MSRP and I have no problem getting it. Especially at this time. In regards to referring customers to the internet to purchase a radio, in my opinion this is not good for business. If the radio is on the internet and available I will buy it and my customer does not know any difference. The last time I tried to purchased shoes at Nordstroms was 10 years ago and they were out of my size. The sales associate told me to go onto the their website to purchase them and I will have them in 3 days. The moral to the story- I have not purchased another pair of shoes in a brick and mortar store since. We are in the customer service business embrace it and exploit it. It pays you back in ways that you never thought of! Keep in mind when you go out to eat sometimes we go out for fast food and sometimes we will pay more for the WHOLE experience!
NY is overpopulated with clowns who give things away and do garbage installations. There are very few shops who understand and deliver quality and value. I earned the right to be an “expensive” shop and I am proud of this. We are also consistently booked around three months out.
it is about time the margins come back. MAP is a joke. The only people that can make real money at MAP pricing is large multi store retailers and chains or some very high volume shops. The little guys barely stay alive at map. Maybe if shops stop selling at MAP as the norm then they could pay employees a good wage and we all would benefit from a better life instead of just scraping bye.
Feels nice to have a 50 percent markup again..thats the way it makes sense to be in business in this industry.
You should look at where Tom’s shop is. What he considers cheap most would consider high end.
Well stated GDUB
MAP is for clerks……
Retail is for salespeople.
Way to go Tom Sweere of Beach Autosound. Nice to see there are still some good people with a conscience.
Tom Sweere has got it all wrong and is atypical of the retailer mentality to sell cheap. It isn’t “ taking advantage “ it’s common business sense, If demand is high, costs are high, product is scarce then what is the logic of selling at what you guys call “ map “ versus retail? This is why when supply finally comes on line retailers will just go back to the normal practise of giving away profit, This is also why other industries look at ours and shake their heads in disbelief.