Axis Cracks Down On Illicit Channel Sales

By John Honovich, Published Nov 01, 2019, 07:35am EDT (Info+)

Axis has stepped up efforts to crack down on illicit channel sales according to various industry sources, though, Axis denies this.

Online sales and poor margins have long been top Axis integrator complaints. This came to the forefront when we brought attention to how Arbitech was selling millions in unauthorized Axis, undercutting partners. But, at that time, Axis emphasized it would not block resellers and supported the 'free market'.

Illicit *********

** **** ***** * ******* *********, all ** ***** **** *** ******* up ******* ** ******:

  • ****** **** ***** ********* ** ***** prices *** ******** **** ****, *.*., what ******** **** **** **** *****.
  • ****** ****** ****** **** **** **** partners *** **** ******* **** ** online ***** ** ** ******** ** public ****
  • ***** **** ********** ** ********* *********, without ****** *** ****** ** *** them *** ****** *****.

Gold ******* *****

******* *** **** *********** *** **** the ***** ** **** **** ******* status. ******* *********** **** **** **** Partner ****** (********* **** ** ****** discounts) ***** ******* ** ********* **-**** those ******** ** ****** ******. ************ would **** ******* **** **** ** they ***** ******* ****** ****** **** Gold ******** ** ***** ******.

** **** *****, *** *********** **** because **** *** **** ******, *** Axis **** ******* ***** * *** points *** ***** *** ****-******* *** the ****** ***** **** ******** ** very *** ****** ** *** **** quickly ****.

Axis **** '********' ****

*******, *** ******** ** **** ********, was *** ***** *** ********* ************ of *****-**** **** ******** ****** **** it **** ********* *** **** ******** that **** ******** ******* ******** *** effectively ********* **** ****** ******* **** plenty ** ********* ** ********* *******.

Increased ***********

**** *** **** *** ***** ******* such ********* *** **** **** *** well ******** *** **** ****. *******, over **** ******, ******* ******* *** that **** *******-** ***********, **** ********* checking *** *** ****** ****, ***** projects **** **** *** *** ******* Gold ******** **** ******** ** ****** sellers.

*** ****** ** **** *** **** much-reduced ********* / ************ ** **** products ****** *** ******* ************ ************.

Nothing *** **** ****

*******, ****'******* *********** **** ** ******:

****actively *** ************ ******* the policies and requirements of our Channel Partner Program and the benefits it brings to our distributors, systems integrators and resellers--and ultimately our end-customers. The only changing dynamic to our program is that we continue to grow and welcome new integrators, which may add greater visibility to our efforts and underscore our commitment to partners. Overall, the cornerstone of our program is trusted relationships, so it’s important to protect that integrity. [emphasis added]

** ********** **** ***** *** **** no ****** ** *********** ** ***********, adding ** ********:

** **** ****** **** **** ****** in **** **** ** ****** *** policies. **** ****** ** **** ***** resources ** *** ******* **** *** years, *** *** ***** ** ******* the ******* *** ******** ******, ** we *** **** ********* ***** **** we **** ** ** ***********.

Not ******** *** ****** ****** *** ************

********* ****** ********* **** ******* **** ****:

******* ** ***** ** ***** ********* from ****** ******** ******* ************.

**** **** ** ***** **** ** not *********** ******** ********* ** **** as ****** ** ****** *** **** costly *** ************ **** ** *** access ** *** ****.

Winners *** ******

*********, ****** ********* **** *** **** integrators ***** **** ******** *** **** this.

*** ***-*****, ** *** ** *****, as **** ************ ** ***-**** **** products *** *** / ****** ******** could ***** ** ********* ***-**** ******.

*** *** ****, **** **** ****** some ********* *** *** *** **** to *** * ****** *****. *** it ** **** ********** ** ****** where ***** ******** *** *****.

** *** ***** ****, ** **** can ****** ******** *** ****** ***** partners **** *** ******** **********, ********** and ********* *******, ** ***** ** better *** *** **** **** *** integrators ** *** **** ***.

Return ** *** Enforcement?

** ***** ** ** ***** ******** that, **** ****, ***** *** ***** work ******** *** *** ****** **** of ******* ****** ******* *** ******** work *** ****** **** **** ***** return ** *** ***********. *******, *** now, **** ** ** *********** ***********.

Vote / ****

Comments (40)

They do this about once every other year, on average. All the online resellers duck their heads and try not to get noticed for a while. Then Axis kind of forgets and everything goes back to normal. I know that a lot of integrators would love for Axis to put a permanent end to this, but they couldn't possibly. There are just too many Axis Gold dealers willing to sell pallets of Axis products out the back door to some e-commerce website. Makes it easier to hit that monthly number.

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There are just too many Axis Gold dealers willing to sell pallets of Axis products out the back door to some e-commerce website.

I agree that there are lots of dealers who will do so. However, the question is about Axis. They have hundreds of employees just in the US, is it really that hard for Axis to track massive purchases from Gold dealers? They seem to be doing it now?

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so if Axis is not actually blocking any resellers, what are they doing that constitutes enforcement?

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what are they doing that constitutes enforcement?

They are blocking at least some Gold dealers from selling to some online stores or stripping dealers Gold status who sell to online stores. Those online stores still can buy but they cannot at the discounts they previously attained, which undermines the whole model of flipping products online or at bids.

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They are blocking at least some Gold dealers from selling to some online stores or stripping dealers Gold status who sell to online stores.

actually stripping them would be a big deal, i would imagine they would neither Axis nor the partner would be happy with that...

what are they doing in terms of the Arbitech Arbitrage?

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what are they doing in terms of the Arbitech Arbitrage?

Not sure what Axis did behind the scenes but from what I saw via Arbitech and buyers from Arbitech is that their supply was significantly reduced.

The reality is, even at Axis size, when a million dollars worth of orders goes through (and at Axis prices, that's not a huge amount of cameras :), Axis can relatively easily figure where it is going if they want.

imagine they would neither Axis nor the partner would be happy

Yes, in particular, the sales manager getting the credit for that volume. And, for Axis, the best-case scenario is that the business flows through some other but real partner. Of course, the risk is that they don't get that business and they lose to a competitor.

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As advanced as our industry is in technology, I find it amazing that distributors and manufacturers havent figured out how to acclimate to this thing thats been prevalent for over 20 years now. Im referring to what I cleverly like to call "the internet".

Why not just make a reasonable MAP pricing policy and strictly enforce it?

Often I find that manufacturers fall into a few different ideaology's, all of which can be solved:

#1) "Its just too hard to enfore it."
Solution: Hire a guy (or even 2) for $10/hr whose sole purpose is to search the internetz all day to find the perpretrators. Make purchases and track the serial numbers down the original customer and warn them and/or shut them down. Otherwise, prepare to have your products sold online everywhere at any cost one wants to sell at.

#2) "We allow online sales but dont have a MAP policy."
Solution: Terrible idea. Get one. You are attracting distributors that will add no value to your brand.

#3) "We will not allow online sales at all."
Solution: This works great for manufacturers who sell straight to integrator and have more control over the sales channel.
But for manufacturers who sell through distribution, you are setting yourself up for failure.

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As advanced as our industry is in technology, I find it amazing that distributors and manufacturers havent figured out how to acclimate to this thing thats been prevalent for over 20 years now. Im referring to what I cleverly like to call "the internet".

This whole internet thing is just a fad.

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So instead of Amazon or BH Photo I just need to go to my ADI account?

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I just need to go to my ADI account?

Lol, though in fairness, even if you have an ADI account, you still won't get a significant discount from ADI unless Axis makes you a dealer, etc., right?

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Definitely true however, my ADI price is equal to BHPhoto pricing on P5635-E MKII, MSRP. I am sadly not part of the secret club finding super cheap Axis cameras online. I will just continue to buy through a reseller that offers me a good price, roughly 20% off MSRP, and has ADI drop ship to me.

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Is your reseller a Gold Partner? Or are you ordering from Amazon and BH Photo?

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I have not asked if they are gold. I would assume so given the other large businesses they sell to. No I do not buy from Amazon or BH Photo.

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Definitely true however, my ADI price is equal to BHPhoto pricing on P5635-E MKII, MSRP

I believe your ADI price is equal to BHPhoto pricing, though, to clarify, BHPhoto is not selling Axis at MSRP but some non-trivial discount off MSRP. I don't have current Axis MSRP pricing handy but I thought BH pricing is ~10% off MSRP.

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B&H

MSRP? (Feb 2019)

but

Surveillance Video

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My price catalog may be out dated, Summer 2019, but when I checked they were at MSRP, I did only check one model though.

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For those of us not caught up on "Camera Sales - the Game of Thrones edition", is BH a bad guy in this scenario? Are there any online distributors who sell retail that are not bad guys? Is it naive to assume there are retailers out there set up through proper channels with some legitimate price relative to MSRP? If an end user for some reason wanted their own Axis camera do integrators have a problem with that? No, not to do a DIY VMS at enterprise scale.

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Why not have Axis provide one reseller price for every integrator?

given the strength of the product, there really is no need to justify special pricing to anyone

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given the strength of the product, there really is no need to justify special pricing to anyone

might as well sell direct in that case

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Direct to integrator would be ideal

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Direct to integrator would be ideal

nobody hates middlemen more than middlemen ;)

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They can do what McIntosh did, the low grade stuff (Axis M Series) can go online but the higher-end has to go through brick and mortar, in Axis's case authorized integration partners.

That way they can get the online exposure and protect higher margins on the high end cameras.

Or be like HPE and register the product on bulk discounts to the end user to prevent gray market. Look on Amazon there are Aruba 2930F 24-port switches for around $800, chances are they were from a purchase where the distributor padded the order and resold the excess, when you try to register it you won't be able to because the company they were meant to go to is already the registered owner.

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Or be like HPE and register the product on bulk discounts to the end user to prevent gray market.

Look on Amazon there are Aruba 2930F 24-port switches for around $800...

am I confused, or did you just use the fact that there are gray market, pre-registered HPE switches available online to argue that pre-registering them would prevent them from getting to the gray market?

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I think it would help deter a legitimate business from purchasing it, say like a MSP who does the occasional camera.

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One of the big problems that online sales generates for authorised resellers is the support headache. Typically your low margin online sales companies supply zero support. The purchaser then contacts the authorised agent for support. When the agent tells them no, because they did not sell the item & thus made no $$ out of it, they get all upset.

When they get upset they then badmouth the product as having no support etc. This then means that the product brand gets tarnished which ultimately leads to less sales by the manufacturer.

One of the brands we are the local distributor of has the following policy in place for one of their product streams - If the item is advertised online with pricing accessible to the general public you get 1 warning. If you re offend then you lose the right to distribute the product.

If it is put online by partners customer it is tracked by serial number back to the original distributor, the circumstances of the online availability are examined & the above penalties may apply.

The stated aim of this policy is to protect the brand & protect the distribution channel all the way to the installer.

This policy works well as I have never been able to find the relevant product stream in any online store

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This policy works well as I have never been able to find the relevant product stream in any online store.

which products?

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I agreed hoping they would come back and clarify so we could investigate and see. I have been disappointed.

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The survey question is poorly worded. I answered yes, but manufacturers should NOT make it harder for online sellers. That said, they should not sell to those online-only sellers for less than the people who are truly their partners. People who are actively seeking projects and building relationships and executing competent installations to further the the footprint of their brand.

If manufacturers treat dealers like a commodity, then it's no wonder dealers and end-users return the favor. This is likely at least a small part of the reason Hik and Dahua became so gigantic. Dealers get tired of their products being sold online below their cost. It's hard to defend a proposal when a camera you are selling at a thin 20-30% margin is listed all over the web at 5-10% below your cost. It looks like you are ripping off your client bc they assume the online vendor has a reasonable profit margin as well and you are just lining your pockets.

I'm all for better partners getting better discounts, but maybe single-digit percentages. When it's more significant you create a barrier because small partners can no longer compete with larger ones.

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This is a bad practice for AXIS if they are looking for loyalty from dealers they need to first provide loyalty which they are not doing.

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This is a bad practice for AXIS if they are looking for loyalty from dealers they need to first provide loyalty which they are not doing.

actually reducing the volume of online sales sold below MAP is providing loyalty to the compliant dealers, no?

what should they do instead?

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For me loyalty in my business is direct result of the service and integrity that I provide. We all buy from people we trust and for the service after the sale that they provide. For axis to allow online sales simply put reduces this to price and to me diminishes the brand. You may be right but for me I become less loyal.

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For axis to allow online sales simply put reduces this to price and to me diminishes the brand.

i’m confused though.

what other mechanism is there for axis to reduce online sales, other than refusing to sell to those partners who are selling to the online merchants?

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Note: Axis has a US reseller list (with Gold, Silver, etc. partners listed), screencap:

Axis confirmed the list is not complete, though, and partners can opt out. I was interested in checking this to see who gets to become Gold partners but there is no complete public list of that.

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Axis confirmed the list is not complete, though, and partners can opt out.

surely, it’s gotta be pretty rare to opt out, no?

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rare to opt out, no?

If it was a Gold Partner that sold online, I would think they would want not to be listed there.

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If it was a Gold Partner that sold online, I would think they would want not to be listed there.

true, but I thought the Gold partners didn’t actually sell online themselves, but are just passing-thru?

  • Online stores buying from Axis Gold partners who then flipped them in online sales or in response to public bids
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Can anyone tell me the discount percentages for Sliver/Gold levels

In my area Silver requires $30k volume per quarter to qualify and Gold requires $70k/quarter

Not sure we'll get to the Gold Level , but I'd like to understand the discount.

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For reference, Axis's 3 partner level requirements and benefits are listed here: Axis Partner Agreement

In my experience as an Axis Partner, Gold partners have always received 27% off of MSRP. Additionally, you need to make sure you have 2 "Axis Certified Professionals" on staff to reach Gold status.

While I have only worked for a Silver partner for a short time (before reaching Gold Level status), I recall the discount for Silver in the low 20% range, possibly 21 - 22%. It could be lower, but we hit the $70k mark pretty quickly.

Special project pricing discounts with Axis is limited (as a partner, disappointing), typically requiring a $20k project, and only resulting in an extra 1-3% off of your discounted price (not 1-3% off of MSRP).

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Axis told me they review the partner's numbers quarterly and bump partners up and down quarterly. If you're a Gold partner and have a slow month they bump you down to Silver. Can you confirm this?

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It is their official policy to review and bump partners up and down, however, not after a single slow month.

In my experience of over 10 years working for Axis Gold Partners, we did not get bumped down based on a single quarter below $70,000, as long as we were continuing to register projects, invite the Axis RSM to display at tradeshow booths, and leading with Axis solutions. We never went more than 1 quarter below $70,000, usually because of project/bidding/budgetary delays, which caused the following quarter to exceed $70,000 significantly.

We were dropped to Silver for a short period when they enforced the 2 Axis Certified Pros requirement but quickly got 1 more person certified. This was after months of warning from Axis, and unresponsive integrator management.

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