Independent Dealers Redux

Just the other day a package of press releases and commentary arrived on my desk. The headline from a "guest editorial" blared, "Changing Times — The Return to Independent Dealers."

The package came from Crosley Distribution Centers headed by president/CEO C. E. "Buddy" Dixson Sr. whose operation will be celebrating its 25th anniversary on June 1. Crosley hasn't just gone down memory lane this year, they've inked distribution deals with Zenith and now Maytag to deliver their lines to all those independent dealers who are Crosley customers.

Crosley says, "Changing times will now turn manufacturers' attention back to giving small- and medium-size independent dealers the royal treatment that they used to enjoy."

One of the main reasons why independent dealers have gained so much importance again in electronics and major appliances is technology. Between the digital revolution on the CE side and the move to new, upscale technologies in white goods, both consumers and manufacturers need the knowledge and skill of independent dealers on the retail floor to explain and sell these products.

The retail landscape in electronics and appliances has changed greatly over the past 25 years, with Crosley saying that over the last 15 years "the big-box price-hog stores [made] a big splash." Well, national chains are still around and have gotten bigger and bigger.

But this year independent dealers, run in some cases by families, in other cases in partnerships with one to five or so outlets, have in many respects been insulated from the full effect of a softer economy. Ironically, the demise of Montgomery Ward and Circuit City's decision to drop major appliances are two reasons independents are doing well.

Generally speaking, many use distributors or are part of buying groups, a necessity nowadays. Most successful independents that come to our attention have knowledgeable salespeople. Service is still king with independents. And many benefit because national chains either aren't in their neighborhoods or don't carry the same models and/or brands that independents do.

The next class of trade you would think cause the most trouble for independents are the regional superstores. But these local powerhouses that are in some cases, publicly held, advertise heavily on local TV/radio and go head-to-head with the nationals on price, are being hurt. The latest example is Philadelphia's American Appliance, which went out of business this spring.

I'm not saying that these independents will reach the influence they had, oh about 30 or 40 years ago when two-step distribution was king. But these small stores are doing well now and will be for the foreseeable future. While some manufacturers may think it is easier and more cost-effective to sell their lines through a few national chains, I dare say they should take a second look at independents. Over the long-term independent retailers may be the most profitable way to educate consumers about new technology … and sell them some goods in the bargain.