Mission Statement

In 1996, Jerry Maguire announced his Mission Statement to the world in the hit movie of the same name. I recall at the time every corporation on the planet started to create their own mission statements. I was in the corporate world at that time and I was in the middle of a 'mission statement' in the department I worked in. Eventually the mission statement became passe and everyone moved on...

Everyone at that time created a mission statement as an outline of their goals, be it for their team, or for the company as a whole. But they missed the real point, a mission statement should not be taken lightly, it is not simply an outline of your goals, it is so much more than that, at least it was for Jerry Maguire.

A mission statement as it was presented in the film, was a stake in the ground for change. Jerry had had enough of the way his industry worked, how it cared for profit over the human component of their business. Jerry's mission statement acknowledged his industries shallowness, it's failings, and laid the ground work for change.

For his efforts, Jerry Maguire was ostracized from not only his colleagues, but from his industry. Jerry had a paradigm shift, a moment of clarity if you will, and in doing so, he put everything on the line for his new found beliefs. Like all Hollywood films, good prevailed and his previously ill fated clarity of mind, became the benchmark for his industry. But, that was just a film....

I have been in this industry for several years and Wicked Digital is now in it's sixth year. From day one, we have been an online business as well as a retail store. From the day I started this business it has been a battle with the suppliers and other dealers. I have lost count of the phone calls from suppliers saying something along the lines of: "Dealer X is complaining about your pricing for product Y, can you change your pricing?"

We have had to put up with practices by distributors which by any other name is price fixing, this industry is rife with this type of activity. It is also rife with tiered pricing structures. In recent times we received a new price list for a major brand we sell, and noticed we no longer enjoyed the same margins as we had previously. The distributor decided that because we offer a 10% discount on their products to our customers through our web site, that they would reduce our margins and hope we would not notice.

Late in 2009, a major brand of headphone we stock had it's margin structure changed to those dealers who had an online presence. The margin was almost halved, and if the dealer 'behaved themselves' in terms of pricing, they would get a rebate. Larger 'box movers' on the other hand enjoyed a much greater margin than stores like us who helped to build this brand of headphone, paid on their terms, and regardless of the fact that they have an online presence, did not have to deal with the flawed rebate structure.

So for us smaller dedicated headphone specialist dealers, we had to pay more for our stock upfront and then constantly chase the supplier for the promised rebates which were never paid on time. Even worse, by ultimately restricting our sell price it virtually killed off the sales of this brand for all of us online dealers. What was once our biggest brand, is now insignificant to our business.

In terms of hi-fi components and speakers, we used to sell many more brands than we currently do, brands such as KEF, Marantz, Tannoy, Usher and many more. We lost most of those brands the day we closed our physical store and went online only. (we have since re-opened our store for reasons explained below)

We became one of those nasty online resellers, the scum of the industry, at least that is how online resellers are seen by the distributors. There are online resellers that deserve this loathing, they hold no stock, work from a second bedroom in their house and offer no real service to the industry. Oh and, who allowed those dealers to exist? The very distributors who complain about them GAVE them access to the product in the first place! But we, and a few others are far more than that.

For those who are not up on the legalities of the actions of distributors, it is illegal to price fix, it is illegal to ask a dealer to change their pricing, it is illegal for a dealer to ask a distributor to tell another dealer to change their pricing. But it continues... Proving it is difficult at best, but it exists in this industry, big time, and I for one, have had enough of being told what price we can sell to our customers at and how we can sell it to them, be it in store or via the web.

The reality is, around 75% of our sales are placed online through our web site. Consumers WANT to buy online, distributors do not want to accept that and have continued to put their heads in the sand and tried to ignore the online market. The most common response from a distributor about why a 'real' dealer is better, is that, and I quote: "A customer wants to be able to come into a store and speak to an 'expert' about their needs, and to be able to ask questions about the product they wish to buy, and online can not do that".

The stupidity of that statement is staggering. We have an e-mail account which is monitored from 7AM to around 1AM in the morning. I answer questions from our customers all day every day. A physical store is not available to it's customers outside of normal business hours. But more than that, I tell them over and over again...the consumer is far more savvy than to simply ask the person who is wanting to take money out of their back pocket, if the product they are asking about suits their needs. Walk into ANY AV store in Australia and see if any of them will tell you that product A that they sell, is NOT what you need. Consumers research their purchases online, reading independent reviews and blogs with comments from real users, long before they start looking to buy, FACT.

What they fail to accept also, is that geography is irrelevant to the consumer these days, we are all one click away from losing a sale because of poor pricing.If we do not sell to our customers the way they want to buy and at the price they want to buy at, then an overseas dealer will gain the sale, it is that simple.

Recently it was suggested by one of our distributors to another distributor, that they come and see us to stock their high quality audio components. The owner of that company came out to see us, and I am quite sure he did so to appease the other distributor. He was a nice person, we had a nice chat, but ultimately, he did not give us access to his products purely because we are selling online. Ignorance.

Make no mistake, I am in business to make money, this is how I pay my mortgage, my car, put three children through school, pay health funds, insurance, rent, internet bills and on it goes. We NEED to make a profit to pay for all of those expenses and hopefully have something left over for a holiday once a year. But I am also a consumer, and I, like all of my customers, do not want to pay more than I should for a product I buy in Australia. And that, is what this mission statement is all about.

Wicked Digital is proud to say that we will no longer tolerate price fixing which still plagues the Hi-Fi industry. We are determined to bring the best pricing to our customers, as such we would rather a distributor withdraw their products from our store than to continue to harangue us to re-align with other dealers. We will retain the good relations with some of our existing distributors, and continue to sell their products. But, for the most part, we will be changing the way we do business.

Over the past 12 months we have been quietly securing a number of quality audio brands to bring into Australia direct from the manufacturers, brands such as Atacama, Bel Canto, HRT, CEntrance, M2Tech, Halide Design, Aaron(Germany), Calyx, Audio Art Cables, Sonicweld and Xavian.

By buying directly from the manufacturer, it allows us to sell to our customers at prices that are on par with the pricing of overseas markets, and that is the way it should be. Other dealers who also import product, are still selling at inflated prices and making double margins, in other words, putting profit before their customers. We will NOT do that, we will make our normal margins, and our customers will be buying at a fair price.That is our stake in the ground.

I am not concerned that we will be ostracized from this industry by all other distributors and dealers, because we have been from the day we opened our doors. The traditional distribution model is out of date, and is no longer viable for either the manufacturers or consumers, products are simply too expensive with this model, a change is needed.

The upside, is that we have managed to secure some of the finest product, quality product from all over the world including Europe, Japan and the USA. We have the best range of digital product for computer based audio than any other dealer, and our customers are enjoying quality audio playback from their computer systems like never before. And our focus is on just that, computer based audio, amplification and speakers.

We will continue to seek out high quality products, such as the Xavian range of speakers that are on the way to us now. A range that will knock existing 'big name' brands for six and do so at far less cost to our customers. We are now getting manufacturers contacting us asking us to sell their products, so we must be moving in the right direction.

I take this opportunity to thank all of our customers for the support they have given us over the last six years, and for any continued patronage of our store be it online or in our showroom. Business is a two way street, we are nothing without customers, so in return we offer you the best range of exclusive product with the best pricing we can, and will continue to do so.

Regards,
Steve Lees...

Wednesday, 02 June 2010