Roseville, California – InnerScope Hearing Technologies Inc. officials signed a 10-year manufacturing, design, and marketing agreement with Zounds Hearing Inc., an FDA registered manufacturer of hearing aids, related components, and accessories sold under the Zounds name and distributed through multiple marketing and distribution channels including Zounds branded retail locations. Under the agreement, Zounds will be a subcontractor for InnerScope, providing all of InnerScope's design, technology, manufacturing, and supply chain services. These services and resources will be shared between Zounds and InnerScope.
The agreement allows InnerScope to leverage Zounds’ investment in engineering, manufacturing, and supply chain capabilities, and the right to access Zounds' research and development and technology breakthroughs in advanced audio technology within its 52 patents. In addition, InnerScope and Zounds will execute a joint marketing agreement to assist each other with marketing in other distribution channels and leverage each company's relationships across both companies' brands. The marketing agreement will also allow InnerScope to add and market Zounds current product portfolio through all of InnerScope's distribution channels.
InnerScope, known as a distributor and marketer of affordable high-quality hearing aids through multiple distribution channels, will now become a registered FDA hearing aid manufacturer. The FDA registered medical device facility located in Chandler, Arizona, will also warehouse its manufactured hearing aids and related components and accessories.
Thirteen worldwide hearing aid manufactures consist of 7 smaller or single-brand boutique manufactures including Zounds, and 6 major global manufactures (the Big Six), and together make up approximately 47+ different brand labels. The Big Six makes-up more than 90% of the hearing aid market share for all hearing aids sold worldwide.
Unfortunately, the current hearing-impaired market of 1.2+ billion people globally that have hearing loss and may benefit from the use of hearing aids is underserved, and these 13 hearing aid manufacturers are only serving less than 4%, roughly equivalent to $7 billion, of the total global hearing-impaired market. In the U.S. alone, its estimated only 8 million people are hearing aid users out of 48 million people who are hearing-impaired.
InnerScope's plan is to design and manufacture multiple brand labels of high-quality hearing aids at different price points for its multiple distribution channels. For example, its direct-to-consumer (DTC) division, InnerScope will be developing a very affordable line of self-fitting hearing aids, which allow the consumer to simply fit, program, and adjust the hearing aids, all through their smart phone, in less than three minutes. InnerScope's hearing aids designed and distributed to InnerScope's corporate owned physical audiological hearing aid retail stores and to its buying group members, will have more audiological features and fine-tuning options and adjustments available for a more precise fit by hearing healthcare professionals.
InnerScope, now as a hearing aid manufacturer, will dramatically increase its gross margin up to 95% on corporate owned physical retail stores and up to 87% through its DTC channels. Coupled with the low retail price points, InnerScope will clearly be positioned to disrupt the current hearing aid market by offering its own manufactured high-quality hearing aids with the latest in Bluetooth and patented technology that will rival all of the other manufacturers, even the Big Six. But, more importantly, with InnerScope's branding and marketing through multiple large DTC distribution channels and the building of physical audiological retail hearing aid stores, InnerScope will ultimately grow the current adaption and market penetration rate of 4%, which up to now, all the other hearing aid manufacturers have failed to accomplish due to the current distribution model.