Audiovox 2005 Annual Report Download - page 13

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DISTRIBUTION AND MARKETING
We sell our products to:
o power retailers,
o mass merchants,
o regional chain stores,
o specialty and internet retailers,
o independent 12 volt retailers,
o distributors,
o new car dealers,
o vehicle equipment manufacturers (OEM), and
o the U.S. military
We sell our products under OEM arrangements with domestic and/or
international subsidiaries of automobile manufacturers such as Ford Motor
Company, Daimler Chrysler, General Motors Corporation, Toyota, Kia, Mazda,
Jaguar and Subaru. OEM projects accounted for approximately 10% of sales in 2005
versus 14% in 2004. These projects require a close partnership with the customer
as we develop products to meet specific requirements.
In fiscal 2003, 2004 and 2005 our five largest customers represented 34%,
27%, and 24% of net sales, respectively. During fiscal 2003 one customer and
during fiscal 2004 two customers accounted for at least 10% of the company's
sales. No single customer accounted for more than 10% of fiscal 2005 sales.
We also provide value−added management services, which include:
o product design and development,
o engineering and testing,
o sales training,
o instore display design,
o installation training and technical support,
o product repair services and warranty,
o nationwide installation network and
o warehousing.
We have flexible shipping policies designed to meet customer needs. In the
absence of specific customer instructions, we ship products within 24 to 48
hours from the receipt of an order from public warehouses and leased facilities
throughout the United States, Venezuela, and Germany.
PRODUCT DEVELOPMENT, WARRANTY AND CUSTOMER SERVICE
Our product development cycle includes:
o identifying consumer trends and potential demand,
o responding to those trends through product design and feature
integration, which includes software design, electrical
engineering, industrial design and pre−production testing. In
the case of OEM customers, the product development cycle may
also include product validation to customer quality standards, and
o evaluating and testing new products in our own facilities to
ensure compliance with our design specifications and
standards.
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