Audioholics-branded Storefront – Breaking the Rules

It was with interested skepticism that Clint DeBoer and Gene DellaSala sat down during the 2006 CEDIA with Will Stamps (of Woodland Venture Partners) to discuss what would eventually become the Audioholics-branded Storefront. Issues on the table were: How would the store work and what would it look like? What part would Audioholics play in its development and operation? Would opening a store impact our objectivity and ability to provide unbiased reviews to our readers? Why is this a good idea?

These were all good questions at the time and are certainly good questions for our readers and manufacturing partners to be asking us now. We’ll take you through, briefly, the process we went through in reaching a decision to actually license and deploy the Audioholics-branded Storefront AND outline why we think this is the greatest thing to hit consumers in a long time.

How would the store work and what would it look like?

The first thing we wanted to discuss was what, if any, constraints we would be given and how much technology could be implemented within the Audioholics Storefront. As our readers and manufacturing partners are well aware - we don’t do anything “half-way”. Licensing a store operation would not be anything we were interested in if it weren't top notch, otherwise we'd just deal with affiliate marketing from Amazon or Google and skip the hassle. From day one Will and our development partners, assured us that plenty of venture capital was being placed on the table to develop a unique, successful and creative store solution that would be worthy of being associated with the Audioholics brand.

Once this was established we began alerting our manufacturing contacts to the new opportunity. The store's requirements definition document, which outlined its core functionality, quickly revealed an extensive set of tools for the online storefront including real-time product filtering, detailed product selection modules, and more. We quickly recommended detailed feature and specification comparison charts whereby consumers could compare and contrast the features of different models or equipment. We were determined that this store, should it move forward, would be nothing short of amazing for consumers.

The next thing we inquired about was the willingness of the store to buck the trend of a “sell as cheap as you can” business model and instead opt for a store that provided exceptional value while following the protected pricing structures recommended by manufacturers. This accomplished two goals for us: 1) With adherence to SRP, the storefront could provide a greater number of brands and manufacturer products to consumers, and 2) the store make this pricing structure beneficial to consumers by adding items such as 3-year automatic/free extended product warranties, package discounts, and free lifetime technical support. The idea was that, sure, you can find products cheaper elsewhere, but would you give up an extra 2 years of warranty and lifetime setup and technical support services to save a few bucks? We didn’t think so either.

To their credit, the store did nothing but support our ideas and the Audioholics-branded Storefront continued to take shape, moving from its initial “on-paper” design to a physical website that was well under development.

What part would Audioholics play in its development and operation?

This was the easy part. With an Audioholics-branded store it was imperative that we didn’t get involved in running the day-to-day operations and we wanted to maintain a complete separation between our Editorial duties and that of the Storefront. To be quite plain, the Audioholics-branded Storefront would only work if it was nothing more than a branded affiliate marketing site, where we made money on products sold but, like Cnet or any other larger online magazine or website who deals with affiliates, we had nothing to do with its actual operation. This was quickly agreed to and one of the reasons we agreed to move forward. Our store partners would handle the staffing of the store and all day-to-day operations such as inventory management, product placement, order handling, and structuring and implementing the customer support. To-date this has been implemented smoothly and we have been able to continue concentrating on our editorial duties at Audioholics.com.

Would licensing our name to a store impact our objectivity?

This question, while seemingly difficult on the surface was never much of a problem for us – though we quickly recognized it would be an issue if not properly addressed. Audioholics was licesning its name to an affiliate store - and the income models was not much different from what we would earn if we included Buy It Now links to the Amazon or PriceGrabber networks. Audioholics was begun, and continues to remain, a technocratic organization. We have never been at the behest of a group of marketing or PR people. We’ve never had a group of bean-counters telling us how to run things. We have always directed operations from the top – a top composed of engineers and technical staff. This has resulted in our ability to overcome several challenges which intersected our path during various stages of growth:

• Around 1999, Audioholics began receiving products directly from manufacturers. Due to this arrangement, some readers felt that we would inevitably produce positive reviews – since negative reviews would preclude manufacturers from sending us any additional products. 9 years later we are still known, on occasion, to beat up a few manufacturers’ products – but they know that they can still trust us to be fair and continue to send us products.
• In 2002, Audioholics began accepting advertising. From the initial reaction of our forum members and more active readers, this apparently was the death knell for our online magazine. Not surprisingly, we were able to not only maintain our objectivity, but continued to provide objective reviews that proved beyond a shadow of a doubt that Audioholics could be trusted to put its integrity above its revenue streams. Since then, Audioholics has refused over a dozen accounts due to our ethics superceding the desire to make a quick buck.
• Around 2005 Audioholics started reviewing displays and projectors submitted to us by a couple of e-store partners. At the beginning and end of these reviews a link was provided back to the partner stores for purchase of the product. This was significant because it was assumed that no negative reviews of submitted products would ever materialize. In fact several unfavorable reviews materialized and the store partners were merely given the ability to refuse the link. The reviews were published as-is.

This last example is of most significant importance, since it most closely represents the situation with the Audioholics-branded Storefront. To us at Audioholics, the Storefront – an entirely separate corporation – merely functions as another affiliate store. And this affiliate can accept links from existing product reviews – just like Amazon or PriceGrabber. This leads to a couple interesting points:

• Never before has a new storefront able to be advised by a group of people more interested in actual AV products than in making money. In this sense, we hope consumer reaction is “Finally! An AV store designed by the same type of people who shop there!”
• The Audioholics-branded Storefront will not determine the products being reviewed at Audioholics.com
• Audioholics.com will not cease to review products submitted by manufacturers regardless of whether or not they exist in the Audioholics-branded Storefront, the same way we don't check to see if it is carried by PriceGrabber or Amazon.com before accepting a product.
  
• Editorial at Audioholics.com and the corporation that runs the Audioholics-branded Storefront have almost zero direct interaction on the topic of reviews and inbound links from the online magazine. This is by design and keeps the two completely separate. Our affiliate links are simply a process we add when we publish content. Those who have been around awhile may also recognize that Audioholics split Advertising and Editorial when we began accepting manufacturer-sourced ads and maintains a separation of these functions and communication paths to this day.

The rest of the points are worth a closer look and so we’ve delineated a specific set of reasons why we think the Audioholics-branded Storefront is a good idea below.

Why is this a good idea?

Obviously, we realized from the onset of this venture that there would be a significant amount of challenges and perceptions to overcome when involving ourselves in a branded Storefront. After all, no publication in the history of AV magazines has ever undertaken this step and for good reason. No other major publication, to our knowledge, has been any sort of technocratic organization. Indeed, the entire Editorial staff of the majority of other home theater publications is directed by the publishing company. You know, the same publishing company that signs the paychecks and solicits advertisers. With Audioholics, our technocratic organization has been fully in control of the Editorial staff from day one. A highly technical staff built it up from a hobbyist site into the leading home theater magazine it is today. A highly technical staff, headed by our President Gene DellaSala (whom is a degreed Electrical Engineer), continues to call the shots and direct the editorial content. A highly technical staff forms the technocratic organization that is Audioholics. And that’s what leads us to the following very interesting observations:

• Audioholics has a phenomenal birds-eye view of the industry as a whole and is in a unique position to recommend and influence the best manufacturers to be included in the storefront. We can weed out the snake-oil and we want to see the store support the best class-leading products in all price categories.
• Audioholics isn’t running the day-to-day operations of the branded Storefront, allowing us to keep and maintain that crucial separation between our Editorial staff and the operations of the Storefront.
• Audioholics is positioned to provide organized, specific and much-needed support documents and videos to the Storefront which set apart the store's technical support materials as being a cut above what is available in the industry as a whole.
• We’ve shopped online and know the pitfalls and issues associated with other online stores and affiliates. The Audioholics-branded Storefront aims to differentiate itself through excellent lifetime support options, free extended warranties and a shopping and product comparison system that leaves all other stores wanting.

What does all this mean to the consumer? Audioholics isn’t compromising its morals one bit by licensing its name to this store. To the contrary, we feel that consumers should relish a store that is being influenced by people who are more interested in the industry than they are about making a profit.

For the manufacturer, Audioholics provides a one-of-a-kind opportunity. Never before has a store been licensed and branded by an organization so entrenched in the world of consumer audio and video. Manufacturers can trust Audioholics to maintain their integrity and reputation as a no-nonsense publication with reviews that far exceed the typical “press-release” style seen in many other online or print publications. Audioholics has worked for years to build its brand and will continue to be a force in the industry that vies for the heart of consumers as it presents the objective truth to the best of its ability. For years manufacturers have trusted us to Beta test advanced new products, review consumer AV products before they were announced or released to the public and keep hold of sensitive information until it was released to the masses. We have a history of being trustworthy and our technocratic organization makes it easy for us to continue along this path while adding tremendous opportunities for our readers and manufacturers alike.