Manufacturers Battle Illegal Internet Sales - ResidentialSystems.com

Manufacturers Battle Illegal Internet Sales

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Hebron, KY -- NuVo Technologies has terminated two of its Preferred Dealers for unauthorized Internet sales. One dealer based in Indiana sold NuVo equipment on Amazon.com to an end user in Oklahoma, while the other, based in Texas, sold a NuVo product on eBay.com.

This decision illuminates a growing and increasingly vexing challenge facing manufacturers and their authorized resellers in the CEDIA channel who often see product pricing undercut by illegal discounts not only from authorized dealers who break their dealer contracts, but the even more troubling unauthorized reseller sites who typically acquire products illegally.

Another industry manufacturer, Proficient Audio, recently announced a major effort to eradicate unauthorized sales on the Internet. This effort has resulted in the removal of Proficient products from all but a few unauthorized sellers that recently popped up.

"In order to uphold the integrity of our brand, we have invested hundreds of thousands of dollars over the last four years in an effort to get our products off of unauthorized websites and to take down unauthorized auctions on eBay," Keith Marshall, president of Proficient Audio, said.


"The custom install industry has an enormous problem with brands getting killed on the Internet. We were getting hit too, and after complaints from our dealers, we started to address the problem. But we are now at the point where Proficient may be the most tightly protected home audio brand on the Internet. Proficient takes this very seriously and we will continue to invest our time and money to eliminate future unauthorized sales as quickly as they arise."


Marshall pointed out that consumers purchasing Proficient Audio products through unauthorized dealers have no idea where those products may have come from. Unauthorized Internet sellers often claim that product carries full warranties, when, in fact, they don't. He added that Proficient Audio warranties only products sold through dealers that are trained in the proper installation and servicing of Proficient products and can assure a positive experience for the customer.


As clearly stated in the dealers' agreements with NuVo, Preferred Dealers are prohibited from selling NuVo products over the Internet. They are further prohibited from selling NuVo products to third parties that intend, or that the dealer reasonably believes may attempt, to sell NuVo products via the Internet, including sales made through auction and reseller sites like eBay. Preferred Dealers also agree not to merchandise or advertise NuVo products below retail price.


"NuVo has a zero-tolerance policy with regards to unauthorized internet sales of our products," Chris Westfall, NuVo's vice president sales, USA, said. "Although it is difficult for us in this economic climate to terminate dealers, doing the right thing isn't always the easy thing. These terminations demonstrate to the vast majority of NuVo Preferred Dealers who play by the rules that we will continue to take aggressive steps to protect their businesses and their margins."

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