Velodyne Terminates Reps & Becomes an Internet Direct Subwoofer Company

We went online today and, lo and behold, Velodyne has turned into an online subwoofer company. After investigating, and hearing back from a rep, Velodyne is terminating its entire network of manufacturer reps, and selling direct to consumer. This was... surprising to say the least, and we're interested to see where it takes the company in terms of new products and their existing lines. Everything seems to be on the table, though we'll certainly keep an eye on this as things progress. On July 25 all of Velodyne's sales reps were given notice that their relationship with Velodyne (some of which spanned more than 25 years) would be terminated in just three days. At the same time, Velodyne launched its online website and began selling its products. SO far all of the following lines are (apparently) available for purchase, some of which have, to-date, never seen the light of the Internet:

• Digital Drive Plus
  
• DEQ-R Series (some models listed as out of stock)
• DLS-R Series (some models listed as out of stock)
• Impact Series (some models listed as out of stock)
• MicroVee (listed as out of stock)
• MiniVee Series
• Optimum Series (some models listed as out of stock)
• WiConnect
  

David Hall, the newly active CEO, was quoted as saying "After careful evaluation of how we get our products to our customers, we determined that we can be more effective in serving the stereo enthusiast by offering products directly from Velodyne."

This is a profound change for a company that told us not too long ago that they had zero interest in selling their products online. In fact, the company seemed proud of its dealer network and their placement in brick and mortar stores (the latter of which we are guessing they aren't trying to take away just yet). David Hall cited Asia manufacturing and the Internet medium as core reasons why Velodyne made the change. His hope is that Velodyne can "reinvent itself as again the most cutting edge and exciting audio company."

Here is the core quote from the statement emailed to its reps:

"Our decisions are not made lightly and we are making every effort to balance business priorities with the respectful treatment of our representatives who have made numerous contributions to Velodyne over the years," Hall says in the letter. "Due to our new road map and after much consideration, we are terminating our relationship with all of our representatives."

We feel that Velodyne has made a very dramatic and exciting move. Whether it is going to be good or bad for them depends on how well they can convince consumers that they are competitive in the Internet-Direct market - and whether or not they can drive enough traffic to their store through advertising and marketing. Velodyne has always been considered an installer-only and brick-and-mortar brand. To take on the value-oriented ID market will take some bold steps.

UPDATE - Here is an informal statement from a Velodyne spokesman regarding the change:

Velodyne is still maintaining its relationships with dealers, retailers and distributors. The only thing going away is independent sales reps. Dealers and resellers will still have access to dealer pricing and will be able to receive that pricing via the web upon checkout. A big part of this change is to make purchasing Velodyne products easier for all customers.

The spokesman also said that part of this was to address unauthorized Internet sales which harm the company's business partners, but I'm not sure how selling online directly will address that unless the company maintains MAP. On top of that, they'd need to aggressively pursue anyone else selling online - a move they could have made before terminating their manufacturer's reps. That would make competing with Internet-direct companies very difficult unless the company releases some new lines, priced specifically to compete in this market. One thing is for certain - this will be a VERY interesting year for Velodyne, and what happens next, and how quickly it happens, will reveal very quickly whether or not this was the best decision, or worst mistake, in the company's 28 year history.

Sound off - what do you think? Comment in our forums below.

For more information, visit: Velodyne Online