Arecont Loses Largest Rep Firm

By: Brian Karas, Published on Mar 02, 2016

Arecont has been hit hard both by the Chinese disrupting Arecont's former low cost camera leadership and by the recent expansion of top rivals offering multi-imager cameras.

Now, they have lost their largest and oldest rep firm.

In this note, we break down what happened and how this will impact Arecont.

******* *** **** *** hard **** ** *** Chinese ********** *******'* ****** low **** ****** ********** and ** *** ****** expansion ** *** ****** offering *****-****** *******.

***, **** **** **** their ******* *** ****** rep ****.

** **** ****, ** break **** **** ******** and *** **** **** impact *******.

[***************]

CV ****

*** ******* ** ****, *** ****** *** US **** *****, *** founded ** **** *** had ***** * ***** employees, ***** ***** *** a ************ *** ****.

*******

** **** ****** ** the **** ****. ** Reps ****** ** ***** own ******, **** **** not ********** ** *******.  

*** ***** *** * tough ********** ** ***, as **** *** ******* dependent ** * *** customers (** ** **** case, *******) *** **** limited *********** ***** (*.*., switching ** ******).

** **** **** ********* that ** ***** *** former CV **** ******** ** the ******* ********* *** gone ** **** *** Arecont ********.

Arecont *********** ******

***** ** *******'* **** territory *** ** ******* rep **** *** ~** *****, CV **** *** *******'* largest *** ****, *********** for **** ** ******** of ****** ******* *** thousands ** ************* ** the *********.

** *** **** ****, for *******, **** *** be **** ** **** significantly (* ******* ** more) ** ** **** ********* and *********** **** ***** cost *******. *** ***** often **** * ****** net ********** **** **** a ****** ******** ***** earn. **** ** *** to ******* *******, *** can ** **** ********** to *** ************ ** the ***** ****** ** building ***** ***** *****. Rep ***** *** **** only ** ****** *****, where **** ****** ********* will **** ** ***** some ******* **** ******.  Once *** ************ *** their ***** ************ ** to *****, ** ** not ******* ** *** rep ***** ** ** fired *** ******** **** direct ********* ** *** manufacturer ** *** ******.

*******, **** ** ********** to ******* *********** *** customers *** ****** **** and ******* ** ****. 

** *** ***** ****, these *******, ******** **** the ******* ******** / competitive ******, *** **** Arecont ** ***** **** servicing **** ***** *******'* $** ******* **** financing **** ****.

Milestone *** ***

** **** ********** ** *********, ***** ****** ***** in *** **** *** years. *******, ***** ** Reps *** **** ***'*** Milestone *** * ***** period *** **** *** appliances, ** ** *** see **** ****** * significant ****** ** *********.

Comments (27)

Avatar

Ari Erenthal

Chesapeake & Midlantic | 03/02/16 05:39pm

Is CV looking at another camera brand and preemptively dropping Arecont to prevent a conflict?

Avatar

Brian Karas

IPVM | In reply to Ari Erenthal | 03/02/16 05:45pm

No, the firm has shut down.

Avatar

Ari Erenthal

Chesapeake & Midlantic | In reply to Brian Karas | 03/02/16 05:47pm

Ah, I'd missed that part. Man, this is a tough business.

Avatar

Brian Karas

IPVM | In reply to Ari Erenthal | 03/02/16 05:53pm

It's a *very* tough business, and I think it's gotten more difficult over the last several years.

CV Reps was, IMO, one of the better firms in the sense that they actually *did* proactive work. I tried to hire them as a firm when I was at VideoIQ but we couldn't quite come to an agreement.

Part of what makes it difficult is that the term "rep firm" can be anything from 2 guys each working from a spare bedroom at their houses, to an organization that rents office space, has a demo room, has inside/outside staff and so forth. I think some of the shoestring operators drag down the rep business at large and make it harder for the firms with more overhead to operate profitably.

The variability of rep firm operations also make it harder to manufacturers to fully rely on a rep model nationwide, as you need to build up enough of your own staff that it becomes harder to justify paying large commissions to reps.

John Martinez

In reply to Ari Erenthal | 03/03/16 08:54pm

no absolutely no

Undisclosed Manufacturer #1

03/02/16 05:50pm
I think the biggest problem is that CV Reps provided what amounted to onsite tech support up and down the west coast. I always remember them having a few spare Arecont cameras in their trunk. They will be missed!

Undisclosed #2

03/02/16 05:51pm

IMHO, it's very unusual for a rep firm to close-up shop with its client list still intact.

Maybe more than one rep is going to work for Arecont.

Is there any comment from Arecont?

Avatar

Brian Karas

IPVM | In reply to Undisclosed #2 | 03/02/16 05:54pm

I reached out to Arecont for a comment yesterday but have not heard back. Will update if that changes.

John Martinez

In reply to Undisclosed #2 | 03/03/16 08:59pm

mike has gone to work for northland controls, eric trying to resurrect cv under his tutelage. the new man in pnw did move over. good move for Arecont. have not called anyothers

Undisclosed Distributor #3

03/02/16 07:49pm

It's not at all unusual for an employee of larger rep firm to be hired by the manufacturer directly. Such a move by itself should not kill a rep firm.

Something else must be going on.

(I even have seen a reverse move when a manufacturer's RSM would open a rep firm, and would be given a territory by former employer; this is very rear, but has happened more than once)

Avatar

Brian Karas

IPVM | In reply to Undisclosed Distributor #3 | 03/02/16 09:13pm

The employee I referred to found a job AFTER CV Reps decided to go offline. CV Reps did not shut down because they lost an employee.

Marty Calhoun

IPVMU Certified | 03/02/16 08:28pm

They should give consideratuion to KLM Marketing they are an experienced, well seasoned team of professionals, A+, Best of the Best, Paul Walter runs a first class operation

Avatar

Brian Karas

IPVM | In reply to Marty Calhoun | 03/02/16 08:34pm

Do you mean the KLM Marketing group that already represents Arecont on the opposite coast? I don't see how they could effectively cover the west coast region.

Undisclosed #2

In reply to Brian Karas | 03/02/16 09:11pm

I don't see how they could effectively cover the west coast region.

Perhaps by hiring a few of the newly displaced CVReps?

Undisclosed Manufacturer #4

03/03/16 12:56am

I think this all dates back to the Exacq separation and growth of Badger.

John Honovich

IPVM | In reply to Undisclosed Manufacturer #4 | 03/03/16 12:59am

Losing Exacq could not have helped. From what we have heard from different rep firms, picking up Milestone has not been anywhere close to being as profitable (poor Husky).

John Martinez

In reply to John Honovich | 03/03/16 09:06pm

john milestone or Arecont is not reason chuck walked away. I can tell you cv was making huge amount of commission. the loss of exact was impacting but sales were made up in other lines. I don't want to speak for chuck but I think he was just tired of all the BS,

Chuck was financially personally a hig net worth individual. So he just walked.

Undisclosed #2

In reply to John Martinez | 03/04/16 03:32pm

Ok. So he wanted out.

Usually one would just sell the business to a competitor, or at least fire sale it to the remaining employees, to make a buck and so people don't lose their jobs.

Undisclosed Distributor #5

03/03/16 02:12pm

Rep firms are typically paid 6-8% of sales. So if Arecont is saving $1 million annually that means CV must have been generating around $15 million in sales. It also means around $100K in commision revenue per CV employee for just the one line. Doesn't sound like a model that you would close your doors on.

John Honovich

IPVM | In reply to Undisclosed Distributor #5 | 03/03/16 02:15pm

The $1 million was a rough number, also assuming that AV would have to add internal people that would cut in on the total cost savings / amount CV Reps was previously making. Lastly, also assuming that AV would err on the side of cost savings given the increasing commoditized environment of the camera business.

John Martinez

In reply to John Honovich | 03/03/16 09:07pm
way way way too low on estimates/

Undisclosed Integrator #6

03/03/16 07:04pm
John, if you want to email me, I will tell you what I have heard.

Carlos Espinoza

03/03/16 10:59pm

As I know Arecont is still working with LRG and LAR reps

Avatar

Chris Lanier

03/04/16 03:13pm

As for LRG clarification, LRG inc (US), we are legacy Vivotek reps for the Central US.

To IPVM and All bloggers- Keep up the great topics!

Undisclosed Manufacturer #4

03/04/16 07:17pm

There was a very good rep firm called MAR who did just this also a few years back. His son was one of the employees. You just never know I guess

John Honovich

IPVM | 04/04/16 01:03pm

Update: Arecont has brought on Warren Rep for part of CV Reps old territory.

Warren Rep has struggled since the decline of Pelco (who they had repped for many years), then switching to Bosch in 2012, and now to Arecont.

Undisclosed Manufacturer #4

In reply to John Honovich | 04/04/16 01:18pm

Unfortunately I predict they will struggle again. PELCO was the machine and the successful rep firms were accessories and not cogs.

Pelco Reps just don't transition well into the role of a traditional rep firm. Most manufacturers (HIK excluded) won't fly customer to the home office and do the tour, provide gifts, train and market immensely.

How many PELCO Quarterly Magazines are still in dealer and architect waiting rooms!

Open an old issue to the back and see the employees birthdays next to the list of about 80 people in the marketing group.

IMHO. I wish them luck.

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