Yes, it's true, my rep confirmed today. As a Marantz dealer I think this is a bad idea, but (I'm stunned) they didn't check with me before they did it.

I'm wondering if there are any main stream electronics manufacturers that are direct-only now and will stay that way in the long-term future.

Press release is below. AVAD isn't DISTRIBUTING Marantz, silly, they're PARTNERING! Anyway, I'm a big fan of distribution (I came from security distribution). Do you know how difficult it is for a company to sell direct to dealers!? Especially low-volume, non-stocking dealers? It seems dealer-direct customers can still go direct, while newcomers, probably lower-volume guys, will go through AVAD.
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MARANTZ AND AVAD ANNOUNCE DISTRIBUTION ALLIANCE

-- Alliance Will Help Expand Distribution for Marantz' Premium A/V Products Among Custom Installers --

Itasca, IL and Hollywood, FL, December 16, 2004 -Marantz America, a world leader in advanced home entertainment solutions owned by Tokyo-based D&M Holdings Inc. (TSE II: 6735) and AVAD LLC, the preeminent U.S. distributor of custom home technology products, today jointly announced that they have established a strategic alliance for the distribution of Marantz products through AVAD's nationwide corps of custom home technology dealers. AVAD will begin distribution of Marantz products beginning in mid-December 2004.

Noted Bob Weissburg, President of Sales and Marketing, D&M Holdings, North America: "As the custom installation market evolves, more distribution opportunities are tied directly to the home construction and home improvement contractor markets. AVAD's proven and successful approach of bringing custom installers together with home builders fits perfectly with Marantz' commitment to provide the best home entertainment solutions to this valuable market segment. Most importantly, through our alliance with AVAD and its vast dealer network, Marantz will have a ready-made sales and marketing channel that will help us significantly expand distribution and gain wider exposure for the Marantz brand in the custom installation sector."

"AVAD has been seeking a high-end audio and video manufacturer with strong brand recognition to become our strategic, full-line supplier," said Joe Piccirrilli, managing director of AVAD. "With its reputation for creating outstanding, reliable products that are friendly to the custom install market, Marantz is a great fit for us. By offering a premium brand like Marantz, AVAD continues its commitment to providing dealers a high level of service. We look forward to having Marantz on board."

This new relationship with AVAD does not affect the distribution of Marantz products through its traditional specialty retailers and dealers.

About Marantz

Marantz America is committed to upholding the tradition of technological superiority initiated by founder Saul Marantz. In keeping with this emphasis on quality, Marantz audio and video components are carried only by the nation's premier independent audio/video specialty retailers and AVAD LLC, the preeminent U.S. distributor of custom home technology products. Additional information is available at www.marantz.com. Marantz America is a wholly owned subsidiary of D&M Holdings US Inc.

About AVAD

AVAD, LLC is the most complete home integration solutions provider in the United States. Its in-depth technology offering of the most trusted names and progressive continuing education programs provide all the support necessary to design and implement complete home solutions. AVAD stocks products for home theater, lighting controls, distributed audio/video, central vacuum, and more for just-in-time delivery from each of its 21 locations nationwide. With complete technical training and certification for industry hallmarks like CEDIA's Installer Level I Certification, AVAD is unparalleled in its commitment to expanding dealers' businesses and profits.

AVAD exemplifies this concept with the Dealer to Builder (D2B) program, which links members of its 8000+ dealer corps with homebuilders across the United States to outfit new homes with in-demand, cutting-edge electronic systems.

Product lines that AVAD distributes and supports include Belden, Bose, Carlon, ChannelPlus, Coleman Cable, H-P Products/Dirt Devil Central Vacuum Systems, D-Link, Draper, Fujitsu, Harman Kardon, Lutron, Middle Atlantic Products, Inc., NetStreams, OnQ Technologies, OpenHouse, Panamax, Panasonic Audio/Video, Panasonic Phones, Peerless, Philips, Polk Audio, ProConnect, ProFlex, Replay TV, RTI, Samsung, ScreenPlay by InFocus, Sharp, SharpVision, Spaun USA, VisionArt, Universal Remote Control, and more.

You want exclusivity?? It's a reciever line...
These manufacturers are all going as open as possible while they can to make the most of the resurgence of A/V industry.
There aren't THAT many mainstream electronics lines available, and they all have aggressive expectations of growth every year.
I think that Marantz will probably get their numbers in '05, what do you think??
Maybe we will get lucky and Marantz will announce a dealer only upscale series at CES a' la Pioneer's Elite or Onkyo's Integra that will NOT be available through the AVAD locations.
Even if the AVAD deal is full line & open distribution, IMO, the individual components aren't that important to the overall sale most of the time, it's you and your reputation that are most important to your REAL customers. If a guy haggles on you because he got a cheaper quote with a lot of the same brands/models, he may not be your guy and he would most likely go with the cheaper quote regardless of what brand names are in it.

Yes, I agree with you on the "it's you and your reputation" line of thought. I'm quite familiar with this philosophy, and practice it.

On the other hand, you (the dealer) cannot hand a prospective client a proposed system that is perfectly shoppable without running an increased risk of losing the job. A certain % of clients _will_ shop, and the more shoppable your package is, the greater your chance of looking bad compared with another dealer that either has lower costs than you, a lower expectation of income from the job, or (most likely) not a flippin' clue what the cost of completing the job will be. You, the smart dealer, increase your chances of going up against #3 by promoting products that anyone that can fog a mirror can get.

You, the dealer, owe it to yourself to maxmize your batting average. Widely distributed products erode that average.

That being said, I use distributed products often, with a different mindset than those that are factory-direct only. The companies that support me and my kind get support at every reasonable opportunity. Those that support everyone that can open a distributor account get my support when it is convenient for me.

Avad doesn't automatically equal open distribution. The Infocus 777 is distributed through them and it's closed, Polk has an open line and a closed line through Avad. I'm pretty sure the new Netstreams Digilinx is authorized dealers only.

I, for one, would be happy to see the CE world look more like the networking world where many, many high-end, restricted products are sold through distribution. I'm an Avaya IP Office dealer, for instance. It's a pretty rigourous dealer process (I think there are 4 other dealers in the whole bay area) - I buy through distribution...Avaya doesn't sell direct.

-Aaron
www.al.net

I see your point, but read the press release.

At this point Integra hasn't made this jump... we chose Integra over Marantz even though in my opinion they were not quite up there. Integra has been a joy to deal with and provides my clients with a reliable, easy to use good sounding product. Now we will just see Marantz in the homie hookup bidding process instead of Denon. We'll have to get familiar with that line and tell our people why Integra is better.

Someday if Integra is at AVAD I guess we'll cry in our beer and get over it somehow.

Press on people!

" Most importantly, through our alliance with AVAD and its vast dealer network, Marantz will have a ready-made sales and marketing channel that will help us significantly expand distribution and gain wider exposure for the Marantz brand in the custom installation sector."

They're a publiclly held company. They have to say this to make shareholders happy.

I am an authorized dealer for Fujitsu and Netstreams Digilinx through AVAD Metro East.

[edited: My initial thoughts were based on an assumption I had considering how other high-end brands are distributed through AVAD]

I will say that personally I am excited about this announcement as my Denon receivers always get shopped (as did my plasmas before selling Fujitsu) and Marantz makes a pretty good sounding piece.

My $.02 worth...

This message was edited by ejfiii on 12/17/04 10:22 ET.

That's hard to imagine ejfii, I think if the "alarm guy" is large enough they will bow down to them. Like here in Houston I bet if Ranger or HSE went to them and said we want to buy Marantz, AVAD SW will give them the okay.

Don't anybody fool themselves...these "protected" lines at the distributor are a bunch of c--p. Once the line makes it into the distributor anyone who is a customer of the distributor can get it. They tend to let other "dealers" purchase it for the "non-dealer".

To be a customer you need a business license (not a contractor's license) and a pulse. We met a builder while skiing and when we pitched our services to him he just informed us that he buys directly from AVAD... waits till the electrical is signed off and wires it himself.

I guess this pisses me off but I'm luckily too busy to worry about it knowing that my tiny squeaky little voice will not make one iota of difference. Instead of worrying about Marantz or next weeks new jumper to distribution I'll continue to try and promote the one brand I know won't be sold there... ME! And even though I disagree with some of their methodology I've got to admit that their convenience and service is definitely a boon to my business.

I agree. It goes without saying that once a brand goes to distribution any dealer can buy from the distributors. Of course, I have my lines that I'm direct for that I always push ahead of distributed lines; nonetheless, this announcement is great for smaller dealers.

Heck in a few years AVAD will have control of our business.
They'll have a control system to offer soon, I'm sure.
They'll sell it all directly to builders and installers will be employed via the lowest bid.
It's all about moving boxes. (imagine that!)

Don't minimize the fact that as others have said, old Marantz dealers don't have the edge they had. To have a thriving installation business, some protected products are a necessity. Don't be so pro-distribution that you neglect to see that reality. Please.

I think the concept that is lost is that , like Julie said, these are publicly traded companies.
They are in the business of increasing sales and making more money, period. I can guarantee that whether or not we are "protected" or make full margin is not discussed at shareholder meetings...
If they feel that they can drive business by catering to the independant dealer exclusively, then this is what they do. When that approach fails to get the job done, or done well enough, they open up distribution. As we know, some manufacturers, Onkyo, Pioneer, Sony, etc. have a seperate line for the indies and help them promote that as a better product. Denon and Yamaha, among others sell a different model number to the national chains and distributors, and do not have versions of their top models for that segment of distribution, leaving the best models for the reps to sell through the independant guys.
Marantz has historically been an independant retailer friendly line since the 1960's, and has been bought and sold more often than any major name I can think of. Maybe the better distribution can give them the stability that they need to ensure the longevity of the brand.
Ultimately, I am glad that this premium brand name is still a premium brnad name... have you seen the CRAP that bears the Sansui name these days?? $99 TV/VCR combos at Wal-Mart... $19 boomboxes at Walgreens... That's not the same company that built some of the coolest audio gear you could find in the 1970's... but they own the name.