Sherbourn to Sell AV Components Direct to Consumers


By Jeremy J. Glowacki February 26,2013


Reacting to what it said are the realities of a changing custom installation marketplace, audio-video component manufacturer Sherbourn Technologies has completely overhauled of its distribution model. 
Dan Laufman
Dan Laufman, president of Sherbourn Technologies.
 
The Franklin, TN, company is bypassing the traditional model of distributor and rep, and moving to a direct-sales model for both consumers and systems integrators, with a special discount for dealers, in addition to a new, lower pricing structure.

The company previously sold only its “two-channel audiophile, home theater enthusiast” Emotiva brand direct to consumers. Sales analysis from 2012 indicated growth for those products, but not for Sherbourn.
Sherbourn’s new pricing structure:
PT-7030
 $2999$1799 
PA 7-350
$4999 $2799
PA 7-150
$2499
$1,499
PA 5-200
$1,999
$1,199
SR-8100
$1,199
$899 
PA 2-160
$899
$579 
PA 2-250
$1,699 $999 
PRE-1
$899
$529
CD-1
$899
$499
PA 12-45 $1,099
$599
PA 4Z-75
$699 $549 
PA 2-50
$499
$269
PA 18-45
$1,699 $799 
C-12 $199
$99

Company executives also observed that there were a growing number of do-it-yourselfers that were building “amazing home theaters,” complete with dedicated room acoustics, large-scale front projection, theater seating, and advanced control systems. And yet, those customers had been cut off from Sherbourn’s “mid/high” CEDIA channel AV receiver line, solely because of what it referred to as “an outdated distribution infrastructure.”

“We still want to embrace the dealer, but we just think there is a different paradigm in place moving forward,” said Dan Laufman, president of Sherbourn Technologies and Emotiva. “Instead of sticking our heads in the sand, we chose to embrace it with a model that works for our customers and the installers.”

Despite the lower prices made possible by direct sales, Laufman said that Sherbourn’s products will be built to the same standards as before, with the same design focus on longevity, integration connectivity, and reference-quality audio and video performance. They also remain backed by Sherbourn’s 10-year warranty, complete technical data for complex installation scenarios, and the company’s technical and customer support team.

Laufman contended that the company’s new distribution plan also provides benefits for its dealers. “I think that the small custom integrator, who has typically been the Sherbourn customer, have been buying from distributors, so used to very slim margins and getting shopped online by customers,” he said. “Our new Direct Dealer Program allows professional installers to make better margins than they would by selling mass-produced consumer brands. Plus we ship for free and provide all of the service we provide for a normal dealer. It’s just in a slightly different business model. And they can still do well with us.”

While maybe not popular with integrators at first, Laufman believes the change, will also benefit dealers that lack a dedicated storefront, by eliminating the order minimums and display requirements often required in the older distribution model.

“They may not be wildly happy about it, but they recognize that they won’t have any sunk investment in the brand, and only have to buy for a particular project.”

21 Comments

  • avatar

    Another company sells out - have fun with customer service calls.

  • avatar

    Another nail in the brick and mortar coffin...

  • avatar

    Are you kidding me? It's the same crew that runs Emotiva, and their customer service is top notch. I expect no less here.

  • avatar

    Dealer cost published online for everyone (end-users) to see. Interesting business decision.

  • avatar

    We, as integrators, really appreciate your support. NOT Good luck dealing with your "do it your self customer"! LOL You'll get what you have coming to you....

  • avatar

    A Lot of Custom Installers are combing their lines for the least problematic products related to direct internet sales. A move like this is not in the well being of custom installers and their businesses. Hope Sherbourn's move helps them, but don't count on custom install to spec any product for them. As I see it.

  • avatar

    Sherbourn's next step will be to go out of business. They are obviously desperate. Bye bye.

  • avatar

    Sherbourn? I have been in this business for over 30 years and I know nothing about this brand. What in the world makes them think that the consumer will make a choice that is in their favor? DIY'ers? For home theater? Someone at this company sold his bosses on a very stupid idea. The next time you hear this brands name in the trades will be the announcement of their demise. Bank on it!

  • avatar

    Better set up a "1-800-Bite-me phone line" for all of the questions/returns/damaged product/warranty issues.

  • avatar

    If any of you knew anything, you might be aware that the other company (Emotiva) that is owned by the same people has had this business model for years and is doing just fine. They have great customer service and deal with questions/problems all the time. At least people will get a decent bargain without paying through the nose for some "integrator" to install a plug and play system.

  • avatar

    How long before they start Wal-Mart as a distribution channel?

  • avatar

    I have been a loyal supporter of Sherbourn for years. That is now over as I cannot support a company that cares more about the DIY rather than the custom integrator. What a tragic mistake. Too bad. I suspect you will lose the entire CI channel and by the time you realize the mistake, it will be too late. Oh well, good thing Ron got out when he did.

  • avatar

    Are they nuts? The CI channel will move to other brands and they will limit their exposure. They are working on a price model here which will see Internet sales go up sure...just like Emotiva which sell ok because they are cheap in comparison to other brands, but not everyone buys on price. But the 2 channel DIY market is far stronger than the home theatre market DIY for decent products. How can you just discount the services that the CI channel provides?

  • avatar

    Anyone that uses the dated dot.com term "paradigm" can't be taken seriously.

  • avatar

    Anyone who rejects a concept because he disagrees with a semantic decision that in no way inhibits the message can't be taken seriously. That's a paradigm doomed for failure, lol!

  • avatar

    In all my years doing custom a/v work (I started in 87), I have never made a significant part of the profit on a deal off the hardware - it's always my expertise, knowledge and installation skill that my clients pay for. Any client that only wants to buy hardware is not for me - I refer then to a store. My only bias is against fixing failed DIY installs - If they try to scope the work for me, I politely suggest that they seem to have the problem very much under control and that to hire me would be redundant. If they want me to take over the project, I ask for detailed documentation of the existing installation. When they can't produce that, I explain why it would likely (always let them decide what actually is cost prohibitive) be cost prohibitive for me to "fix" it, and how happy I would be to execute the entire project from start to finish - salvaging what ever parts of the failed install would fit the new project plan. With no promise that any of it would fit.

  • avatar

    The world is changing. The CI channel is changing. Change and adapt or die.

  • avatar

    Serbourn made great products and Ron was a great guy. When he left, I told him he sold out and he was extreamly offended. We stopped selling Sherbourn when they removed the discount percentages and went credit card only for purcahse; right after Ron left. Ron, you did sell out and now they have ruined what you took so long to build. We started selling Sherbourn when no one knew who they were. "DIY home theaters". Yeah, customers can deal with HDMI and all the other nonsense compatibility issues that the accompany current technologies. "Plug & Play"; there is no such thing. There is ALWAYS something that just doesn't quite work well with something else in the system. People buy IPADS and IPHONES just to say they have them. Over half of them either don't know how to use them or aren't using them to anywhere near their potential. These are the people you are selling to? We made the right decision. We saw the writing on the wall. Ask Velodyne how their sales have been Dan.

  • avatar

    This is a tough decision for any such company to make. The question is why the change? Probably they have had insufficient support within their existing 'dealer' to survive. If so, whose fault was that? Inadequate marketing, bad service. I think the brand is too 'specialist' to survive retail-direct. I am quite sure that many other similar brands will be watching this space.

  • avatar

    Sad to see so many negative comments. Why are people in the US so negative when they have it so good? Why cant people support eachother. I wish Sherbourn the very best.

  • avatar

    I love my Pa-250. I wish I could have bought it for $999.00 instead of 1699!

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