The Value of Buying Groups

edit selogo 0410

edit-selogo-0410The concept of a buying group is an old one. There is power in numbers, especially when those numbers are holding fistfuls of money. And in this economy, AV buying groups are more popular than ever – for obvious and not-so-obvious reasons.

“Stocking a large amount of inventory can be financially crippling to a smaller dealer,” says Jeannette Howe, executive director of Specialty Electronics Nationwide, a division of Nationwide Marketing Group. “But consumers like selection so you must look like you’re in the business.”

Specialty Nationwide caters to the brick and mortar dealers in the consumer electronics marketplace who also offer custom integration services. Specialty Nationwide’s 475 members have access to special training and educational opportunities, as well as marketing materials like online catalogs and shopping cart technology for their own web sites. There are also two member events each year called “PrimeTime!” where members can meet, mingle, and attend training.

“The goal is to level the playing field for the brick and mortar dealers,” says Howe. “It is about camaraderie; not rivalry. You don’t join a buying group to be predatory. You join to improve the bottom line.”

Home Technology Specialists of America (HTSA) is a 15-year-old buying group that takes a slightly different tact. According to David Berman, HTSA’s director of training and public relations, they try to keep their membership number below 75 firms. “Currently, we have the top 60 system integration firms in the U.S. as members,” he says.

edit-htsa-0410HTSA members work on residential and commercial projects, but some requirements for membership approval include at least one showroom or demo space and having a top three position within your local market. Members must be located at least 200 miles apart (or less, depending on the market and client base.) There is a strong focus on selling lifestyle systems rather than pieces and parts.

The firm also has 40 vendor partners including projector manufacturer Digital Projection. “This is our first year as a preferred vendor for the group, and we have been happy with the partnership. They include outreach opportunities via both their HTSA quarterly publication that goes directly to their dealer network, as well as their quarterly HD Living publication, which is sent to their end user database,” says Michael Bridwell, DP’s marketing manager. “Other additional value includes a very proactive PR initiative. We partnered with a small collection of other HTSA preferred vendors including Samsung and Control4 on a recent demo in New York as an example. HTSA chooses a central location, coordinates with the dealer who will host the demo, handles PR both pre and post demo, and staffs the demo with representatives from both HTSA corporate and their PR agency.”

In addition to education and training, HTSA member can also use group power to procure services like advertising, financial analysis, or professional photography. “As the economy goes down, we become an even greater value,” says Berman. “We also become more attractive to firms who may not have joined in better times, but who are now looking to consolidate their lines and get better pricing.”

Another buying group is Home Entertainment Source (HES), the electronics division of the much larger Brand Source group. Its membership is comprised of 500 custom electronics dealers in the U.S. “We are unique in that we have a full staff of in-field consultants working one-on-one with our members to keep their businesses profitable,” says Andy Orozco, director of communications for HES. “The member-owned Expert Warehouse solution is by far the biggest differentiator.  Our members can purchase audio and video products at or below factory cost.  In addition we pass through all manufacturer-sponsored promotions such as display programs and sales incentives.”

edit-hes-0410And for those looking closer to home, another group movement is happening at a grass roots level. Home Electronics Specialists Association (HESA) is a very small group of four companies in the Houston area who have banded together not only for buying power, but to also share labor and expertise. HESA was founded less than a year ago, but the group has big plans for the Houston area.

“We meet once a month for planning and information-sharing,” says Joe Travis, HESA co-founder and owner of Caveman Home Theaters. “We each have our own expertise and can help each other out on projects.”

Linda_Seid_Frembes-0909Travis sees HESA exercising their power with buying, group insurance, as well as agreeing on local standards for AV projects. For now the focus is on the Houston, but Travis sees this type of group expanding across the Southeast and beyond.

Linda Seid Frembes is a rAVe columnist who covers AV technology, installs, market trends and industry news. Linda has worked with high profile AV manufacturers, trade organization, systems integrators, rep firms and dealer/distributors in the industry including John Lyons Systems, Eastern Acoustic Works (EAW), Northern Sound & Light (NSL), and InfoComm International, among others. Reach her at