Since we purchased assets for Parasound Products in Dec 2022, the new Parasound has implemented several policy changes to ensure profitable stability while diverging from some industry norms. These changes reflect our commitment to a sustainable, mutually beneficial dealer network. This document outlines our mature, forward-looking approach to doing business with Parasound.

Our Philosophy

Becoming a Parasound dealer means embracing a dynamic, future-focused approach to audio sales, adapting to the evolving landscape shaped by the internet and changing consumer behaviors. Our goal is to build strong partnerships with dealers who contribute positively to the ecosystem, avoiding short-term strategies that could harm long-term success. While we may not be large enough to drive any dealer's business alone, we are focused on partnerships fueled by enthusiasm and a passion for our products.

Supporting Your Success

We understand that not every product in our lineup will be a perfect fit for every dealer. We aim to support you in identifying Parasound products that excite your sales team and inspire them to excel. You will have access to our full product range, but those who strategically focus on specific collections and demonstrate proven results will enjoy substantial benefits.

Document Overview

This "Doing Business with Parasound" document serves as a comprehensive guide to our partnership approach with dealers. It highlights our commitment to fostering relationships that allow dealers to thrive by concentrating on products that ignite genuine enthusiasm within their sales teams.

Section Overviews:

1. Focus Program (Click for Details)
   • Overview: Allows dealers to select Parasound products that best align with their strengths, customer preferences, and market needs.
   • How It Works: Dealers choose specific products, commit to selling them, and receive exclusive benefits such as special pricing and marketing support.
   • Benefits: Increased margins, input on pricing and product decisions, and performance-based rewards. Dealers can adjust their product focus as market trends and customer needs change.
2. Promotional Use Program (PUP) (Click for Details)
   • Overview: A cost-effective way for dealers to utilize B-stock models to expand their business.
   • How It Works: Dealers use B-stock inventory creatively, such as for demos, training, or short-term loans.
   • Benefits: Low cost, flexibility, and the potential for increased sales without significant upfront investment.
3. Ordering from Parasound
   • Overview: A guide to ordering from Parasound, emphasizing simplicity and efficiency.
   • Process: Orders must be placed through Parasound.com, with pricing and product details accessible upon login.
4. Shipping Capabilities
   • Overview: Details on Parasound’s shipping options, including standard shipping, palletized orders, and drop-ship capabilities.
   • Details: Same-day shipping for orders received by 1 PM Pacific Time, with guidelines for non-standard shipping.
5. Online Sales and Social Media
   • Overview: Guidelines for online sales to maintain brand integrity.
   • Policies: Restrictions on third-party sales, pricing guidelines, and the requirement for a dedicated Parasound page on dealer websites.
6. Used Equipment Sales
   • Overview: Policy against online sale of used current gear by authorized dealers.
   • Guidelines: Used products can only be advertised/sold in physical stores or directly to customers via phone or email.
7. DirectMatch Program (Click for Details)
   • Overview: Parasound facilitates a highly qualified and safe mechanism for dealers and consumers to transact on their current model used Parasound Gear
8. DreamSwap Program (Click for Details)
   • Overview: Parasound facilitates a highly qualified and safe mechanism for dealers and consumers to trade-up to current Parasound models.
9. Support and Warranty
   • Overview: Dealers must adopt a "Customer for Life" approach, being the first point of contact for all product-related inquiries.
   • Process: Dealers handle all troubleshooting and warranty claims, submitting verified issues through Parasound.com/help.
10. ReadyRepair Program (Click for Details)
    • Overview: Parasound provides advanced help, schematics, and parts for current Parasound models only to approved ReadyRepair centers after validating serial numbers, improving repair capabilities while also providing a gray-market deterrent.
11. On-Demand Personalized Information (AMF)
    • Overview: Process for receiving AMF reports on-demand via email.
    • Details: Reports include pricing, availability, order status, and more. Dealers can authorize additional recipients.
12. Guidelines for Exiting the Dealer Program
    • Overview: Outlines the rules for exiting the dealer program if necessary.
    • Process: Includes options for selling through remaining inventory or returning it to Parasound.

Ordering from Parasound

To make your experience as smooth as possible, you can easily check pricing, access detailed product information, and place orders directly on our website, Parasound.com. Just log in with your email, and your pricing will display automatically. Please note that all non-terms orders must be placed through the website.

• We don’t require order minimums because we believe in providing the freshest products directly to your customers, reducing the need for dealer stocking unless it’s part of your business model. This approach also helps lower long-term warranty costs by avoiding aged inventory issues.
• All dealers must have signed agreements and current resale certificates on file. We’ll contact you if we need these documents with your next order.
• For most dealers, ordering is straightforward: log in to Parasound.com with your approved email, place your order, and select your delivery address within the continental US.
• As a lean company, we keep costs down by avoiding collections expenses and bad debt write-offs, so we are very selective about offering terms. You may request terms if you have consistent order volume proven over time. If approved, credit limits will be based on your order history. Please note that all terms are strictly "receive by" with no exceptions. Drop-shipping is not available for dealers with terms who manually provide purchase orders, but you are welcome to mix and match ordering methods to suit your needs.

Shipping Capabilities

• Standard Shipping: Parasound ships via UPS Ground without requiring a signature, assuming someone will be available to receive the shipment.
• Palletized Orders: Require a $10,000 minimum and a shipping dock for delivery.
• Web Drop-Ship Policy: Parasound offers free drop-shipping for orders placed through the Parasound webstore. Shipments are sent via standard UPS without a signature. Dealers are responsible for tracking these shipments.
• Non-Standard Shipping: If you prefer other freight options, you must handle coordination, payment, and labeling. Parasound does not offer a "bill me for the difference" option.
• Timing Expectations: UPS ships same day when order received by 1PM Pacific Time. Some delays may occur on Fridays and during two weeks in the summer and winter holidays.

Online and Social Media

Parasound and our partners have built a fantastic brand over the past 40+ years. As the dynamics of consumer purchasing continue to evolve, we recognize that web-based sales are gaining traction with buyers. With fewer brick-and-mortar dealers, there is a tremendous amount of white space throughout the U.S. that needs to be serviced. To ensure that the online selling of Parasound products reflects the brand experience our customers deserve, we have established clear guidelines for dealers selling on the web. Adhering to these guidelines is essential to maintain the integrity and reputation of our brand.

Online Sales and Marketing/Advertising Guidelines

• Authorized Sales Channels: Dealers may only sell or advertise Parasound products on their own website. Selling on storefronts, third-party sites, consignment, or social media groups is prohibited.
• Dedicated Parasound Page: Dealers must maintain a dedicated link to Parasound products on their website, which will be used for the Parasound dealer locator.
• Parasound Product Listings: Only MSRP/MAP pricing is allowed. No storewide discounts that include Parasound products.
• Sales Tax Compliance: Dealers must charge sales tax to end consumers in all states where Nexus applies. Promotions that suggest "no sales tax charged" are not allowed.
• Used Product Policies: Dealers cannot advertise or hint at any used Parasound products online. Used gear may be displayed or sold in physical stores but cannot be listed online.
• Social Media: Dealers are encouraged to promote themselves as Parasound dealers on social media but must not advertise or solicit used Parasound products or offer "deals" on Parasound.

Dealer Meetings

Online dealers are required to participate in annual meetings to discuss:

• Plans for promoting Parasound.
• Review performance.
• Parasound-related social media posts and tagging.
• Webstore splash page metrics (frequency and featured products).
• Dealer highlight ideas for the Parasound store.
• Support requests from Parasound

Specific Selling and Advertising Restrictions

• No “Call for Price” Listings: If not authorized for online sales, use "In-Store Only" notices. "Call for Price" or similar phrases are not acceptable.
• No Third-Party Storefronts: Dealers are not permitted to maintain a "store" for Parasound on third-party websites.
• Dealers must not refer to themselves as an authorized Parasound dealer on third-party eCommerce platforms or in groups dedicated to selling/trading used current products.

Guidelines for Discontinued Products and Used Gear

• Discontinued Products: Can be sold on the company’s webstore without prior authorization. Warranty is not offered for new sales occurring more than a year after discontinuation date.
• Communication About Used Gear: Dealers may inform customers about available used Parasound gear via phone, direct email, or print, but communication must not specify units or pricing.
• Providing Quotes for Used Gear: Prices can only be provided via phone or in person, not in writing or online until after the purchase.

Returns Policy

• Dealer’s Discretion on Returns: Each dealer determines their web strategy and customer return policy. Parasound will not adjust its policies based on a dealer’s return decisions.

Used Equipment

Parasound values our partnership with dealers and aims to ensure clarity in the sale and marketing of new, used, and open-box products. To maintain the integrity of our brand, please adhere to the following guidelines:

Product Definitions

• New Products: Factory-sealed, new, and current products (as listed on our website) that are purchased directly from Parasound.
• Used Products: Any product where the shipping box has been opened, and the unit has been turned on. This includes, but is not limited to, products sold to an end user and returned (due to the dealer’s return policy, not because the product is in need of service), products opened by the dealer for active display purposes, products loaned to an end user for evaluation, or any products opened for events.

Sales and Marketing Guidelines

• In-Store and Direct Sales for Used Products: Dealers may sell used products in their authorized retail showrooms and market them directly to their customer lists by phone/email/mail. Receipts must clearly mark product as “Used” or “Open box”.
• Selling Used Products: Dealers may sell used products as “Open Box” items, provided there is a clear and understandable disclaimer stating that these units do not come with a Parasound warranty.
• No Online Advertising for Current Model Used Products: Dealers are prohibited from advertising or hinting at current model Parasound used products on any online platform, without exception. Pricing for these items must not be provided in any written form until on invoice after sale is complete.

Support and Warranty

At Parasound, we highly value our partnership with you. To ensure our customers receive the best possible service and to maintain clarity in our processes, we need to reinforce the following guidelines, which are essential for maintaining your status as a Parasound dealer:

1. Customer for Life Approach
   We require all dealers to adopt a "Customer for Life" approach. As a dealer, you are the primary point of contact for all product-related inquiries, including setup assistance, troubleshooting, and coordinating warranty or repair services. This applies to both in-store and online sales.
2. Warranty and Repairs Process
   All troubleshooting for end customers must go through you, the dealer. Warranty claims should only be initiated after you have the unit back in your possession and have verified the defect. Once verified, submit the issue through Parasound.com/help to ensure it receives top priority in our queue.
3. Qualifying for Warranty
   • Serial Numbers on Customer Receipts: Effective August 8, 2024, it is mandatory to clearly note the serial number of each unit on the customer's receipt. This is crucial for streamlining troubleshooting and warranty claims.
   • Existing Products: We recommend a "First In, First Out" (FIFO) approach for managing your inventory. Only products that have been in your stock for less than one year are eligible for warranty under Parasound's policy. If you have any new, unopened products that have been on your floor for over a year, contact Parasound to discuss the warranty options. Please note that the Parasound warranty will only be valid if Parasound has pre-authorized that serial number in writing before the sale.
4. Out-of-Warranty Repairs
   For any repairs on units that are no longer under warranty, please refer to our Out-of-Warranty Repair Page for instructions and details.
5. Access to Discontinued Model Information
   Our website offers Education Packs for many discontinued models, which are rich with valuable information. Please check the relevant product page for any available resources.
6. Need Assistance?
   If you need further assistance or have any questions, please fill out the Parasound.com/help form on our website, providing as much detail as possible. We prioritize these requests to ensure prompt and effective support.

On-Demand Personalized Information (AMF)

For a broader overview of your account, feel free to request the AMF report as needed. You will have access to real-time information, making it easier to manage your Parasound partnership effectively. To streamline our communication and provide you with instant access to important information, we have updated the process for receiving the AMF report:

1. On-Demand AMF Reports
   As of July 29th, AMF reports are no longer sent automatically. Registered accounts can now receive an on-demand copy by emailing amf@parasound.com. Simply send an email—no subject or additional details are necessary. Our system will automatically verify your email address and generate an "At My Fingertips" report within minutes. This report includes comprehensive details such as pricing, availability, order status, tracking information, serial numbers, and more.
2. Authorizing Additional Recipients
   If you need someone else from your team to receive the AMF report, please email their contact information to contact@parasound.com. Ensure the request includes the full name and email address of the person you wish to authorize. Once added, they will be able to request and receive AMF reports directly.
3. Upcoming Additions
   We are continuously improving the AMF report to better serve your needs. Soon, it will also include information on Promotional Use Product availability, providing even more value and insight into your account with Parasound.

Guidelines for Exiting the Parasound Dealer Program

While we strive to maintain strong, positive relationships with all our dealers, we understand that sometimes things may not work out. If a dealer relationship needs to end, here are the foundational exit rules:

1. Removal of Dealer Status
   Our focus is on supporting our many great dealers. Unfortunately, if a dealer is found to be acting in bad faith or attempting to game the system, we will terminate their Authorized Dealer status immediately upon the first validated offense.
2. Supporting Sales and Customers
   Even after transitioning out of the dealer program, we expect dealers to fully support all sales. This includes:
• Providing troubleshooting and hands-on validation for any reported issues.
• Initiating and managing the RMA process directly with Parasound, rather than directing consumers to contact us.
3. Selling Through Remaining Inventory
   Subject to Parasound pre-approval: For 90 days, dealers may continue to sell any new, unopened inventory with the full Parasound factory warranty, provided they honor the Minimum Advertised Price (MAP) or Manufacturer’s Suggested Retail Price (MSRP) and include the serial number on the customer receipt. Dealer will remain authorized and listed on our dealer locator (if applicable). Dealers may also prepay for additional orders if there is a specific customer need (e.g., matching an ongoing purchase).
4. Option for Inventory Return
   If a dealer chooses not to sell through their remaining inventory, they can provide us with a list of all new, unopened boxes with serial numbers. We will then determine an offer for the return of some or all of the inventory.
5. Immediate Termination
   If there is a violation of MAP/MSRP or other grounds for immediate termination, the dealer's status will be revoked immediately. They will be removed from our dealer locator, and any products sold after the notice of termination will not carry a Parasound factory warranty. This must be clearly indicated in all advertising, sales documentation, and customer receipts.