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NEW SERIES VOL. 3, No. 42
TELEVISION DIGEST-9
performance of 5 largest distributors in industry (who also do considerable retail business); Allied Radio, Arrow Electronics, Harvey Radio, Lafayette Radio Electronics, Terminal -Hudson Electronics.
Only 12% of 1,787 distributors do $1 million annual volume, and they accotmt for 55% of total. Cutting it even finer, only 3% do more than $2. 5 million, and they represent 32% of total. Each of our 5 bellwether companies is a ’'multi-millionaire."
Combined first -half (or fiscal year) sales of these 5 firms jumped solid $16 million to $105.9 million from $89. 9 million a year earlier. Their amalgamated profits, however, dipped $620, 833 to $1. 6 million from $2. 2 million.
Sales gains were posted by 3 of the 5. Harvey and Terminal -Hudson were down, but only somewhat-former by little more than $125,000, latter by little less than $150,000. Conversely, Allied boosted sales to record $62. 1 million from $52 million, Lafayette jumped to $31 million from $24.9 million. Arrow inched ahead by slightly more than $6, 000.
Profits were a different and sadder story. Only Lafayette showed improvement— to $761, 264 from $676, 372. Other 4 firms were down— sharply: Allied— to $591,000 from $1.2 million; Arrow— by more than half to $24, 500 from $55, 000; Harvey— to $129, 396 from $155, 507; Terminal-Hudson— $82,473 from $135, 587.
Allied Radio explained its profit drop as resulting from "unprecedented amount of merchandise returned by our customers because it was either defective or didn’t otherwise measure up to their expectations" (Vol. 3:36 pll). For others, profit squeeze reflects numerous factors— including increasing competition, imports. Components represent top volume producer for parts distributors—
42. 5% of 1962' s total $1. 040 billion. Components also represent area hard hit by imports.
Principal headache for distributors, however, is "ridiculous pricing practices on replacement parts," in opinion of H. A. (Bill) Graham, gen. mgr. of Warren Radio, Erie, Pa. Writing in Sept. "NEDA Journal," he emphasized: "For years the list prices on parts have been held at very high levels. Every segment of the industry— manufacturers, distributors, servicemen— have resisted fiercely any attempt to bring any degree of sanity into this picture. Most of the serious problems of the industry, not just of distributors alone, can be traced back to this paradox of pricing. Consider just 3: the 'drug store’ tube checker, the explosive growth of the electronic retailer selling at wholesale prices, and the general decline of replacement parts volume." Graham argues that the replacement parts distributor "is not in mortal danger of his life. He is not even seriously ill. The long-term prognosis is good." However, he does need "an intelligent and reasonable re-alignment of the discount structure on parts. If this remedy is not forthcoming, the patient will suffer longer than he would have to, but the parts distributor still will enjoy relatively good health for a long time."
Here are 1963-vs.-1962 first -half (or fiscal year) performances of 5 major electronic parts distributors:
Sales
Earnings
1963
1962
1963 1962
Allied Radio (year to July 31) $62, 143, 000
Arrow Electronics 2,519, 700
Harvey Radio 3,343,485
Lafayette Radio Electronics (year to June 30) 30,994, 518
Terminal-Hudson Electronics 6,915,983
TOTALS $105,916,686
$51,963,000 2,513,400 3,468,672 24,936, 144 7,064,323
$ 591,000
24, 500 129,396 761,264 82,473
$89,945,539$ $1,588,633
$1, 187,000 55,000 155,507 676,372 135,587 $2,209,466
TV-RADIO PRODUCTION: EIA statistics for week ended Oct. 11 (41st week of 1963) excluding 11-in. and smaller;
Oct. 5-11
Preceding wk.
1962 wk. '63 cumulative '62 cumulative
Black & white TV. . . 154, 472
Total radio 502,809
Auto radio 233,799
163,090
145
454,086
475
204, 129
187
383
5,501
759
13,866
932
5,948
154 5, 159,897
335 14,786,262
828 5,341,936