NARM WRESTLING: INDIES SOUND OFF ON JUMPSTART

UMVD’s JUMPstart pricing program got an unexpected vote of confidence this week at the 2004 NARM convention, when UMVD honcho Jim Urie held a “town meeting” with independent retailers designed to let them air their grievances. A similar meeting at the Urban Network was said to have been quite contentious, primarily because of JUMPstart, and there was reason to believe this would turn out the same way. Indeed, when Urie first broached the subject of JUMPstart and the subsequent tweaked version of same, one retailer chided him that she had felt “sabotaged” from the beginning by the way it had been rolled out.

Urie agreed that it wasn’t handled very well, but then ran some very compelling numbers about how the independent sector’s sales had increased because of JUMPstart. According to his numbers, big box retailers were losing, on average, $1.50 per unit before the program, but made a $0.50 profit after JUMPstart had been implemented. In contrast to that, the indies were making on average $1.49 before JUMPstart and $2.49 after. This was based on typical first -week pricing practices.

Some argued that Urie’s data was flawed, but most agreed. Urie noted that Wal-Mart, Target and Best Buy constituted 50% of UMVD’s business and the hope was that Jumpstart would help to spread it out.

Then it started. It was the strangest thing: one retailer got up and complained that Verve had dropped out of JUMPstart and that he lost sales when the prices went back up. Even more surprising was when John Timmons of Lousiville, KY-based Ear X-tacy took the mike and noted that he had told Urie to “shove it” when the program began, but then noted after crunching his numbers for the year to date that his net billing was up 33% for the year in dollars and up 49% in units. UMVD constitutes a whopping 50% of Ear X-tacy’s sales, and he encouraged anyone who still didn’t agree with the system to re-run their numbers. Surprisingly, most were in agreement.

Now, the fact is that most of these indies purchased direct with UMVD, and so didn’t have the handicap of working with a middleman. But it was unexpected to hear so many high profile indies agree with Best Buy’s Gary Arnold that all the majors should go to the program.