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SELF DISTRIBUTION FEATURE


New DPA Reference Standard Series


DPA 4099 Instrument Microphones


Clockwise from top: Gary Sharpe, Brian Wampler, Gavin Mortimer and Jay Henson.


Someone has to pay for marketing, someone has to support the product. Even a high-end product gets the odd problem that has to be resolved. You get to a certain level and you will never go beyond that because someone needs to have a finger on the pulse knowing what needs to be done in this market – something which some dude sitting in California is never going to be able to figure out on his own. You can only go so far with a direct to dealer policy. “It’s a risk. If you believe your product has the potential to be a multi-million pound product then maybe you should go down the distribution route from day one and take the hit on margins, because if you decide to do it later on, where is that margin going to come from?” But what about the all-important


retailer’s perspective? Jeff Pumfrett’s World Guitars has established itself as one of the UK's premier top-end retailers and he has several US brands which he imports directly – not least, one of the longer- serving US boutique amp lines, Matchless. “The bottom line is margin. A major


distributor wanted to do Matchless in the UK around 2005 and there was simply no margin in it for him. The way it works is that I pay US dealer price – there isn't an export distributor price, which means there is absolutely no margin available. A


mi-pro.co.uk


distributor needs to put 30 per cent on to make it work and once you do that an amp becomes mentally expensive. “The arrangement we have with Matchless is exclusive for the UK. Divided By 13, on the other hand, will supply anybody, and we buy those too.” The downside, he freely admits, is that he doesn’t widely advertise the brands he imports, which does bear-out Gavin Mortimer’s comment about a brand owner needing to make a very hard decision when he opts for the direct model. For all its potential problems (and we


haven’t even touched on the long-term product support issues on electronic products) it seems the direct model can only grow, particularly if the guitar market remains fascinated by boutique brands and distributors have to contend with the power of the Internet, which means their margin is completely transparent to any potential customer who can find a US retail price – as everyone now can. While the direct to retail model isn’t


new, it is growing and for the right retailer and the right brand it can be very successful. It won’t spell the end of MI distribution as we know it, but it is yet another pressure on a sector already being squeezed by the growing number of self- distributors at the top.


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 February 2012 25


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