DJI to sell Enterprise products direct; some dealers unhappy

DJI is now offering to sell its Enterprise products – drones intended for industrial and First Responder applications – directly to customers. This is a change from the previous model, where sales could be made only through authorized Enterprise dealers. Not surprisingly, some dealers aren’t happy about it.

Historically, there’s only been one way to purchase a DJI Enterprise product: directly through an authorized Enterprise dealer. That dealer would offer their expertise to the client, helping them to select a model with the features of additional sensors that best suited their use-case. Those dealerships still exist. But now, they have some unexpected competition after the same dollars, and it comes from an unexpected place:

DJI itself.

The Apple model

We’ve seen this before, with Apple. Consumers have the option of purchasing from an Apple Store, an Apple authorized dealer, or directly online from Apple itself. And as the network of Apple Stores grew, along with the company’s online presence, that posed a challenge for dealers. Suddenly, or so it felt, the company was taking some of that bread and butter away for itself.

It’s been that way for some time when it comes to DJI consumer products. But the Enterprise gear was always a different beast. There, clients had but one purchasing option: via DJI-authorized Enterprise dealers.

The Matrice M300: An industrial workhorse…

Now, DJI has made a change that many Enterprise dealers find troubling: In addition to the dealer network, the company is now selling Enterprise products directly,

DroneAnalyst

A new post by DroneAnalyst explores these changes, and the likely impact on the Enterprise dealers.

“DJI had previously exclusively sold its powerful, expensive, and complicated enterprise products solely through distributors like RMUS, DroneNerds, Heliguy, and more, with over 100 US-based distribution partners in late 2018, and we estimate roughly 200 globally,” writes David Benowitz.

“This shift in channel strategy by the industry’s sole dominant hardware provider (at a 69% market share globally) will have serious repercussions across the industry, as dealer margin on DJI’s enterprise products brought an estimated $180 million in 2020 to local distributors around the world.”

Dealers

According to Benowitz’s post, DJI had been ramping up the profit margin for authorized dealers on the Enterprise side in recent years. Over the past two years, he writes, DJI had bumped that margin by an additional 10 points. As a result of the growing demand, and profitability, he says some dealers who were also involved in the consumer drone side of things began shifting their business to focus more on Enterprise products. In some cases, that has mean hiring additional staff with additional expertise.

One drastic example of this transformation is Italy’s Hobby Hobby, which – as the name suggests – started as a hobbyist drone retailer. As they saw increased margin in the enterprise segment they incorporated a separate brand called “Elite Consulting” to both sell DJI’s enterprise hardware and offer its own training. Other distributors such as RMUS have gone above and beyond just education on products, building out a training curriculum that covers drone program management and niche, technical topics like thermography.

David Benowitz, in a DroneAnalyst post

What’s more, writes Benowitz, is that growing demand for Enterprise and increased profit margins means that dealerships have been playing a very significant role in the landscape of all drone purchases, including consumer models.

Implications?

Well, they’re kind of obvious. This is not ideal for dealers, some of whom will undoubtedly lose sales with clients opting to simply choose DJI.

DJI, meanwhile offered this statement when asked about the changes.

As the Enterprise drone market continues its astonishing growth, DJI is committed to providing our ever-expanding customer base access to our products in a larger variety of ways. This will allow us and our partners to respond to the increasing demand for our products and further grow the entire Enterprise market in the most flexible manner.

And what about the impact on dealers?

Our existing DJI Enterprise dealer network has built a strong global reputation as solution partners by offering services, advice and consulting with every drone they sell. Their expertise is invaluable for first-time customers just entering the drone era, as well as for experienced operators who have developed close and responsive relationships with their dealers. DJI is listing Enterprise products online without discounts, at the same price recommended for dealer sales – preserving their ability to negotiate prices directly with customers and respond to bidding opportunities. We will provide top quality pre- and after-sales support for Enterprise customers as we do for hobbyists and professional customers.

DJI

Pricing

As a small aside, the decision by DJI to sell its Enterprise products online means that something of a mystery has been unlocked: The retail price of these offerings. Most DJI dealers do not post the price of Enterprise drones online, instead requiring customers to inquire for a quote.

Here are the prices:

Matrice 300 RTK: $12,000

The Matrice 300 RTK

Mavic 2 Enterprise Advanced: $7,200

Mavic 2 Enterprise Advanced

Mavic 2 Enterprise Zoom: $3,200

Mavic 2 Enterprise Zoom

Phantom 4 RTK: $7,150

Phantom 4 RTK

These products have been widely adopted by First Responders and other Enterprise users, and their popularity will undoubtedly continue. But – as with Apple – more of the proceeds will funnel directly back to the manufacturer.

DroneDJ spoke briefly with a leading North American retailer of Enterprise products. They were not happy about the decision, but did not wish to go on the record.

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