Where is the Love?
Independent retailers like Mark Lynch of Jeff Lynch Appliance, a TWICE Top 100 majap dealer in Greenville, S.C., are feeling more than a little used and abused by white-goods manufacturers. Lynch dutifully meets all of their franchise requirements, and maintains an idealized 75,000-square-foot showroom and crackerjack sales team with which to spotlight their wares. But often his sales floor is used in the service of at-cost competitors like catalog showroom DirectBuy, Internet-only retailers, and at least one manufacturer’s own VIP program.
“You can’t sell it to me and then sell against me,” he told TWICE. “We have volume requirements to hit, and they’re undermining everything we do. They’re gutting our premium business and stabbing us in the back.” Lynch is calling for a return to controlled distribution in order to level the playing field and support the attractive stores, compelling displays, high-margin mix and top-flight service of value-added dealers.
Ray Windsor commented:
Over the years I have discovered that specialty retailer who are always developing brand "B" in preparation for the time when brand "A" becomes unprofitable or otherwise not beneficial for the specialty retailer to "authorize his consumer to buy" are not caught without a plan. Withouit defending manufacturers... they will do what manufacturers will do. Especially in desperate times. A little bit of homework on the part of the specialty retailer will help to find busines partnerts as opposed to just suppliers. Such a practice may require the specialty retailer to introduce "new" to the consumer. Scarry on occasion BUT very beneficial if done well. After all, that is part of what the "special" in specialty retailer stands for.
Ray Windsor
German Maestro
Jeff commented:
It's all about volume when it comes to manufacturers. The higher the volume you do with a manufacturer the better the price. This even applies to dealers withing buying groups where larger dealers receive additional programming from the group.
Bob commented:
Channel management is the key for manufacturers to correctly handle the appliance specialist. Not just derivative products but series of products with different feature sets that bring value to the consumer and reasonable profit to all the players while remaining competitive in the overall market place
bobcole commented:
On one level it’s contributory negligence. On the other it’s either a defense mechanism as a sign of the times or just simple greed on the part of the manufacturer. Nonetheless,it’s an absence of vision on the part of the manufacturer as they fund the volume producers ignoring the guys that drive the core of their business. The guys who make people actually want to buy their products. At the very least, the pure specialist should be allowed to buy 10% better than the box stores just to stay profitable and keep the channel and the brands alive! Anybody want a list of dead or brands that went the big box store volume route, ignoring the folks that built their business. I’m in Audio and Video and there is not enough room to report the decimation of my category.
Bob commented:
My experience is the DirectBuy has prices that are typically about MAP minus 10% - which is about the normal market price. I think Mark has a good point, but on the other hand I see lots of retailers that have brands they only support in a token way, and the Manufacturers continue to let that happen.
please email customercare@mypressplus.com or call 866-71-PRESS (866-717-7377).