A POINT OF VIEW: A new route to market for beleaguered and/or greedy audio makers? Part #3 of 3

So now you know my views. Are they interesting views? How do you feel about them?

While you are pondering this, given that I'm far from infallible it’s worth considering that although I might be right I could also be wrong:

The direct marketing strategy has already worked in the case of Eastern Electric in the US. I know next to nothing about them but apparently its actually quite good valve equipment. Anyway, Bill O’Connell in the US runs the EE brand together with Alex Yeung in HK, otherwise known as Golden Ears. In the US, Bill does not as far as I know sell through any retailers, rather he only sells direct to customers under his company name Morningstar Audio.

He does offer a home trial money back scheme plus will send you special NOS tubes if you ask and is always at the end of the phone if you need help. He has managed to get some good reviews e.g. on Six Moons.

However, when talking about a UK established audio makers this is a different proposition if they already have a dealer network. This is a much bolder proposition and it is questionable whether from a contractual viewpoint whether any audio maker could just terminate their retail network at a single stroke.

Now then, even if an audio maker does break free and abandons its retail network, whilst it may be successful at the outset, in more mature markets the model might suffer. Dell hasn’t had it all its own way and I recall an article some years back in the FT entitled “Patience wears thin with Dell” – or something like that. If I recall correctly, it had just come out with yet another profit warning with its constant efforts to drive down prices in the face of competition eroding its profit margins.

So re my hypothesis, time will tell.

Howard Popeck