CUK Audio’s Steve Barton thinks you should be selling brands that struggled in the past. He also thinks there is a lot of potential for growth in the MI market. Gary Cooper finds out why and what it could mean for retailers…
According to many, the MI industry is in trouble. Too many brands with too many products are chasing fewer customers and retailers are being squeezed in just about every possible way. Now the industry has to contend with a sinking pound and a post-Brexit climate of uncertainty. How should you respond? The conventional wisdom is to play safe – cut stock to the bone and sell only what you can be sure the customer will want, which means the brands and the products he or she has heard of. But one relative newcomer to distribution says there is another way.
CUK Audio may be a newcomer to the MI scene but it is not a new company. The Scottish based firm is a major player in Pro Audio and AV where it distributes a clutch of prestige brands. Deciding to enter the MI market, CUK looked around for someone with MI experience and recruited former Southern area manager for Yamaha Pro Music, Steve Barton.
Since starting with CUK three years ago, Barton has reversed several of the conventional models used by distribution debutantes – starting with attending a trade show and waving around a cheque book, hoping to poach brands. Instead, CUK has sought out brands which have under-performed. His belief is that providing the products are good, the brands can be revitalised and will offer greater profit margins.
Though primarily a keyboard player, Barton also plays guitar and these feature strongly in CUK’s line-up, a list which includes Japan’s revered Fujigen (aka FGN) electric guitars, Recording King acoustic instruments, Dowina Slovakian-made premium acoustic guitars as well as MIPro PA and, most recently, Crumar keyboards.
None of these brands, it must be said, instantly sets the pulse racing, so what is it that Barton thinks they offer the retailer that could persuade them to stock them either instead of, or alongside, more high profile lines?
‘The brands that I’ve been taking on are either ones that have not been managed before, or that have fallen out with the people who were previously managing them,’ he says. ‘It’s been about picking non-competing brands that have cool heritage and a story but not to put them absolutely everywhere, There is no point in there being inter-town bun-fights between retailers. This way easier to manage for myself and also offers a nice catchment area for a retailer who wants to get on board.’
Significantly, CUK makes extensive use of social media for promotion which enables it to offer very precise geographical support to retailers and Barton believes it can generate provable sales in ways that conventional MI marketing cannot.
Barton is particularly optimistic about the guitar market. ‘There are still a lot of guitar shops in this country and we’re one of the largest markets for guitars in Europe. With some other products that I sell, PA for example, you sell a set of speakers and they will last for life or until they blow up, but guitarists don’t just buy one guitar, guitars are multiple purchases so there’s a larger potential revenue stream. Also, shops that sell guitars are used by customers who may very well be interested in a set of monitor speakers, or a microphone but given the difficulty some companies place on opening accounts, a retailer may only have access to a very few average products from a general distributor he is already doing business with. We score because we are able to offer a lot of these products from prestige manufacturers, like dB speakers, so he can offer those as well without needing to open another account’.
The CUK approach offers a very personal service, too, with just two reps covering sales for the UK and Ireland, Barton himself with the assistance of Amit Mohan, the latter covering the Midlands, the West and South West of England.
‘One thing that is unique about our business model is that we are able to offer very attractive terms and margins. Because we make higher margins in the install and Pro markets, which don’t tend to sell via retailers, we can use those to subsidise the lower margins we make on MI products, allowing us to offer the margins MI retail requires’.
All the same, if the brands offered are not instantly recognisable, will retailers find them hard to sell? Once again, Barton takes an unorthodox approach. ‘For the consumer side I’m using a lot of social media and we also using events like BPM and some of the Northern Guitar shows. I’ve also set up the Dowina Guitars UK Facebook page and am doing the dame with Fujigen. We will also have websites showing the growing number of endorsements we have. We’re doing a lot of artist work but we are also keeping the dealer network fairly limited so, for example, when a dealer takes on one of our brands, we are able to put targeted paid promotions on all of our social media and tie that in with the manufacturers’ websites, targeting the five or ten miles radius around that shop. We’re doing quite a lot of that sort of promotion and it really works.’
What CUK is not doing, however, is following the traditional magazine route, ‘We’ve looked at magazine advertising, but the direct approach to end users through social media, Instagram and Facebook is so proven now and so instant that if you do it properly, coupled with shows, that we feel we can give the magazines a miss. Reviews used to be useful and of course it’s still great to get your product in print but does it lead to sales? No. Are the public believing reviews? Generally, I would say no, because it’s becoming more obvious that as print advertising shrinks it’s perceived as paid-for promotion. If a company advertises in a magazine it will review the product and that, I think, is now the general perception.’
It’s a controversial view that will undoubtedly raise blood pressure in some quarters, especially as Barton places more faith in ‘influencers’ – YouTube bloggers and the like – in whom, again controversially, he maintains the public has more trust.
Controversial or not, Barton says it is working and he is delivering buyers directly to retailers. He adds that he has actually opened accounts by asking social media users who have inquired about his products which retailers they like, then putting the brands, the customers and the retailer in question together, offering the dealer ready-made sales plus proof that his social media marketing really works.
Whether CUK can persuade retailers that its unconventional approach is the answer to dwindling margins remains to be seen, likewise whether it can raise the consumer profile of its brands. One thing is for certain, however, at a time when the industry is badly in need of new approaches, it’s good to see a company trying to be creatively different.
Steve Barton (right) with Amit Mohan (left)