Not only retailers but also distributors are diversifying as car audio, for some businesses, becomes part of a greater mix of services. But where dealers might add leather seating and vinyl wraps, some distributors are diversifying into completely new markets from WeatherTech mats to yoga mats.
The Wholesale House in Ohio is a prime example. Five years ago, car audio was 95 percent of the company’s merchandise. It has since diversified into an assortment of power tools, knives, portable heaters, Husky floor mats and also yoga mats. “We noticed some decline in sales for 12 volt and started asking our customers what they wanted, and doing research on our own.” The move is paying off. Last year sales were flat but this year sales are up so far in the high single digits, said President Mark Yoder.
The company now has a direct relationship with DeWalt tools. It also sells Gerber, Stanley, Black & Decker as well as about a half dozen knives, from pocket knives to throwing knives to hatchets. “We brought in a knife line that did really, really well, then looked at other good quality brands.” It also brought in Mr. Heater portable heaters.
The Wholesale House is still primarily a car audio distributor with 70 percent of its sales in 12 volt products.
Audio America and the Ring Video Doorbell
About six years ago Audio America, based in Jupiter, FL, expanded into products like Nest and the Ring Video Doorbell as well as home products from LG. It found that traditional car audio products–amplifiers, speakers and decks– were down, as a whole, although it moved into powersports, marine and motorcycle audio, which are growth categories for the distributor. UTVs and ATVs are especially strong. Now Audio America’s mix is evenly divided between home products, car audio and ecommerce (sales to Walmart, Home Shopping Network, QVC and Best Buy).
Audio America’s Sales Manager Shane Mullikin,said, “12 volt is still overall a healthy business. Is it what it was 10 years ago? No. But with some of those other channels [marine, powersports, motorcycle] we’re starting to grab more business. The UTV and off road vehicles and marine is going like crazy.”
DOW Goes Commercial
In addition to car audio and several other electronics segments, DOW Electronics, Tampa, FL, operates a custom integration AV division. It is now expanding that division to commercial businesses, installing audio systems and networked electronics in restaurants, bars and the like. A few weeks ago, it hired a sales manager to focus exclusively on commercial sales.
Car audio is still growing for DOW. It saw a 25 percent increase last year and it expects another double digit increase this year. “DOW has always done what we think is a good job diversifying; from the satellite side to custom integration to the 12 volt side and now the commercial side. Also VoIP. DOW has always believed strongly in diversification and is always looking for the next thing,” said President & Chief Operating Officer, John Yodzis. He added, “With 5G coming, who knows where that business will go. You always have to be constantly changing. If you just stick to one thing, you will ultimately find yourself in a position where you need to diversify.”
