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Beware the disruptors

By Gordon Dutch

A victim of our own success?

My first company BBG Distribution Limited was going great guns in the early 2000’s, enjoying significant growth and profits. Whilst our original ‘core’ market (car audio) had dropped off significantly due the integration of more built-in OEM car systems, by now we were distributing brands with solid sales that we had established during the good times. They had a loyal following and we were regulars to the front cover of all the core car audio press and enjoyed TV appearances on Sky News, Pimp my Ride and also some coverage in the national press.

However, we were too reliant on car audio and so I looked to diversify into home audio. Driven by Nakamichi, our home audio division grew quickly, and we added other ‘niche’ brands like Waterfall and Jamo. Most importantly, we diversified again into AV accessories and started to ramp up sales in our new accessories division. That 3rd diversification proved to a very key one…. As out of the blue, and despite incredible sales and growth via BBG, Nakamichi decided that they wanted to come into the UK directly, and that is exactly what they did.

This was the first time that I truly realised that the role of a “Distributor” was a careful balance between success and failure. The truth is that if you are not successful as a distributor, then the brand will drop you. However, if you are VERY successful, then the brand may decide to come in directly. You can quite literally be a victim of your own success.

Learning from past experiences

Learning from your past experiences is a key part of running a successful business. During a very difficult year, we split with Nakamichi, but grew our accessories division strongly. In fact, it went so well that it easily plugged the gap in sales and at much better margin. We also instigated strong distribution contracts with all our new and existing suppliers to protect BBG from any future ‘issues’. This proved essential to our survival later on.

So our ‘journey’ started again. However, having already opened many of the key CE accounts in the UK, this made selling our accessory brands so much easier, as all the back-end paperwork and IT systems were already up and running. Those accounts knew that they could trust BBG to deliver on what we said we would. 

As the banking crisis started to bite, I decided to sell the BBG business. Having met with a number of companies, I decided to work with Peerless a large mounts company based in the US. Peerless had all the qualities I felt BBG needed to be successful going forward; great products, wonderful people and very little trade outside the US, but they were keen to expand. I sold the BBG business to them in May 2008 and joined the Peerless Global Board.

The value of loyalty

Having been so loyal to our large database of retailers and customers over the years, this was going to be a massive test of our relationships. However, with hardly any exceptions, most of our retailers chose to move their existing business over to Peerless. This meant the transition from BBG to Peerless, was almost as good as it could be, and I remain eternally grateful to all those retailers who supported us.

However, the boom time for car audio was well and truly over, as were the large sales of CD based products. The sales of consumer flat panel TV’s were also waning, as by now almost everybody had a flat panel at home. There was a new audio product launched called the ‘i-pod’, which was to change the face of the CE market forever. Just as we had once diversified from car audio into home audio and then into accessories, BBG/Peerless now needed to diversify again.

Part of the reason I sold my BBG business to Peerless, was that they were very strong in the Pro and B2B areas. We therefore launched Peerless into the UK and EMEA Pro B2B markets, which were completely different to the consumer markets. We developed a new global brand to do this called Peerless-AV. We employed a new sales team dedicated to the Pro and B2B markets, with the right contacts to grow our business.

Keep looking for the next niche

Part of the master plan with Peerless-AV was also to diversify into other ‘niche’ areas of high growth. We launched some interesting technology products within the fast growing’ wifi’ market for Pro AV, along with some outdoor TV screens that were designed to work in extreme conditions. This meant we weren’t competing with the major brands, but it did mean that as a ‘technology’ business, we were often much earlier to the party on any large bids. In turn this gave us a great ‘leg up’ in our growth in that new business division.

The point of this story? Beware of disruptors in your core market, always look to diversify when you can, but plan that effectively… and always keep creating new products, because if you don’t eat your own breakfast and market, someone else will…

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Here’s what our Industry Colleagues say about us...

Peerless-AV would like to pay tribute to the incredible work Gordon and his team have done since 2009. It’s sales and brand awareness since we launched Peerless-AV EMEA in 2009 has been massive. Gordon’s strategic leadership and incredible work ethic, along with the dynamic leadership of a best-in-class team, which he assembled, has led Peerless-AV to the forefront of the AV businesses.

John Potts

Global President & CEO of Peerless-AV

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