Play Meter

UP FRONT
Distributors Face Tough Issues
Distributors have always had a dual role in the
coin-op industry. They are manufacturers' repre-
sentatives and operators' advisors. They are in a tough
position-they are the liaison between the two seg-
ments of the industry. These two roles have put the
distributor in the middle, sometimes making it difficult
to be true to either manufacturer or operator. This
essential middleman has faced complex issues: over-
production, closeouts, territorial competition, jobbers,
and conversion kits.
Play Meter confronts each of these distributors'
problems in this special Annual Distributing Issue.
Read how other distributors are conquering the same
problems you are now facing.
Consider the problem of overproduction. As
manufacturers poured equipment onto the market-
place without showing mercy to buyers, distributors
found it difficult to please the factories with volume
sales, and at the same time, to be honest with operators
who depended on them for advice. It was clearly a
difficult position. How can a distributor, in trying to
please the manufacturer, sell products he doesn't
believe will ever see return on investment for the
operator? Yet he was obligated to do just that.
Closeouts created a more difficult situation. Oper-
ators saw games they paid full price for being closed out
at low, low prices. They looked upon this as betrayal by
the distributors.
As growth brought a steady stream of new business-
men into the industry, d istributors found themselves
busier, dealing with more new customers than ever
before. Territories were virtually ignored, and today
many distributors feel that defined territories should
prevail once again.
These and other distributing problems are dis-
cussed in this annual issue. Play Meter interviewed a
variety of distributors about the state of the distributing
industry. Their comments are surprising and inter-
esting.
Though many distributors' businesses are down
anywhere from 30 to 60 percent, optimism prevails.
Distributors say new technology and fulfilling opera-
tors' needs are keys to survival in a changing industry.
Conversion kits are another thorny issue facing
distributors today. Only a year ago they were not taken
very seriously, and discussion on conversion kits was
mostly pessimistic. Distributors especially could see no
future in the kits. Now conversion kit conversation
dominates. Distributors realize that conversion kits are
what some operators want as they wait for the new
technology to breathe some life into a stagnant indus-
try. What the operator wants, the distributor wants to
provide. Many distributors say conversion kits com-
prise their largest percentage of sales.
Some questions distributors ask about conversion
kits are answered by our interview this issue with Tom
Struhs of Tago Electronics, a manufacturer of conver-
sion kits. Struhs firmly believes conversions will always
have their place in the industry and distributors
can make money on them .
The proliferation of jobbers in the industry is also
explored . Are they good or bad for the industry? How
have they become strong?
There's more in this issue.
Some distributors look at their future through the
businesses of their operators. They want operators'
businesses to be successful and to help, they offer
computer software which is custom-made for the coin-
op industry.
Do manufacturer-owned distributors run their
businesses any differently from independent distribu-
tors? Bally and Rowe personnel tell of the advantages
and disadvantages of their position in the industry.
These issues prove that distributors have their
work cut out for them. Play Meter dedicates this issue
to all distributors in the hope that it will provide infor-
mation to help them in their businesses.
~~
Valerie Cognevich
Executive Editor
6
PLAY METER, September 1, 1983