The controversial distribution network has everyone in the industry talking. Here's what some movers and shakers have to say.
By Joe Paone
Look up "lightning rod" in the C-business dictionary and you'll find a big picture of the AVAD Distributors logo. If there's one subject that perks industry ears and elicits opinions—often passionate ones — AVAD is it. In a changing CE landscape, AVAD is one of the most potent symbols of change, and its emergence as a business force has been especially polarizing for manufacturers, C-tailers and integrators alike. Many custom businesses have been genuinely empowered by AVAD, while some established retailers are angry and frustrated about it. Some manufacturers are reaping benefits, while others are caught in a sticky situation with their direct dealer customers. Some are even in both situations.
AVAD's very existence elicits many opinions, pro and con. We interviewed manufacturers, retailers and AVAD itself, to get both sides of the story, and found that both sides had a story to tell.
AVAD STATES ITS CASE
An alliance of manufacturer's reps founded in 1998, AVAD is a network of 12 distributors that has an active customer base of about 8,000 dealers, says Managing Director Joe Piccirilli. Piccirilli and AVAD's supporters in the industry say that AVAD, simply put, is expanding the market for home theater and other CE products by reaching a growing custom installer market that the manufacturers couldn't effectively serve before.
AVAD was born, and has prospered, as a result of its group of reps recognizing a significant shift in the CE distribution model. They realized that the demand for home theater and home networking was creating a new class of dealer that was selling services more so than products, and that often wasn't anchored at a retail storefront. Many dealers in this shift don't have showrooms or stockrooms to speak of; there is, for better or worse, a growing preponderance of independent contractors and installers that simply operate out of their homes or their vehicles. For the manufacturers, this represents a potentially chaotic shift, as control over their distribution could slip out of their grasp.