Blind Bargains: Editorial: Sales Territories Hurt Consumers

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Most people would argue the time machine has not yet been invented and offer plenty of arguments to back up that claim. While they may be correct in a physical sense, one need only look at some of the assistive technology companies and their system of sales territories to find plenty of examples of philosophies that should be left in the past. We contend that companies that still rely on territories to protect their dealers in 2010 are engaged in a backwards and outdated line of thinking.

Let’s provide some background information. Many companies, including Freedom Scientific, Humanware, and GW Micro, divide the world, and furthermore individual countries into regions which are commonly called sales territories. Generally, companies are given exclusive rights to sell within their territory and prohibited by contract from selling elsewhere. Dealers have been admonished and sometimes lost contracts by breaking these requirements.

So why do companies and some dealers insist on this model? Some point out the advantage of having a local dealer for technical support. Others mention the possibility of dealers in other areas undercutting their prices and losing business. Whatever reasons exist, however, it’s time to move on and finally allow consumers and government true choice when it comes to where they purchase their assistive technology.

Seemingly one of the predominant reasons for dealers wishing to protect their territory is customers going elsewhere to purchase products, thus costing them business. Let me ask a simple question. If you had a local dealer for your screen reader or Braille display and they provided a competitive price, excellent sales help, and customer service, would you still support them? I would guess that most people probably would.

I know of many dealers who take weeks or in some cases months to ship products, are amazingly hard to get in contact with, have no online presence, or mark up their products beyond retail. Others charge large sums of money for installation services, setup, or firmware updates which are well beyond the actual value of the service provided. But thanks to the current system of territories, you as a consumer are left to support them, whether you like it or not.

Explore for a second what happened when Humanware opened up their dealer network for the Victor Reader Stream and allowed national sales. The retail price of near $350 dropped to under $290 within months of its release. The reason for this is simple economics and competition amongst several highly-visible dealers. While some may have complained about a loss in profit margins, the consumers were the real winners in this situation.

In addition, the online marketplace has rendered the use of territories highly unenforceable and irrelevant. Dealers with online storefronts are able to take orders from virtually anywhere in the world for their products. Some of these dealers may be selling products outside of their territory and risking the very agreements which keep their companies afloat. But despite attempts by manufacturers to restrict this activity, it still continues, another reminder of the antiquated nature of the territory system.

When you wish to buy a new television, couch, or refrigerator, are you forced to buy it from a store in your city? If you were, sites like Amazon wouldn’t be in business. While many sectors of merchandise have realized the importance of modern distribution channels, many in assistive technology are still living in the past. It’s time to abandon territories altogether, and let the dealers who provide the best value for their customers win the business they deserve.

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