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There is still room in the expediter market for aggressive retailers who want to take advantage of the growing popularity of car navigation, video and remote starter systems, said James Shutowich, Audiovox, VP mobile video.
His comments were made during a seminar on "How to sell to car dealers," presented here at the MERA KnowledgeFest last month. While the New York, Chicago and California markets may be saturated, there are many regions where the current expediters (retailers who sell car A/V products to car dealers) are run "like a part-time business," said Shutowich. He claimed that there's still a sizeable chunk of the pie left for an aggressive retailer.
Car dealers are currently enjoying brisk showroom traffic because of low interest rates, creating an opportunity for plus business for car audio retailers at a time when 12-volt retail traffic is down. Other reasons why the time is ripe to move into expediting outlined at the seminar were:
Car dealers are increasingly turning to car electronics as a way to add profit to the sale of each car.
Many consumers are more likely to buy car video/navigation products from a car dealer where they can finance the purchase through their monthly car payments.
Car video suppliers now offer a greater assortment of OEM styles to give the products a custom look.
To get one's feet wet as an expediter, Shutowich suggests calling on the local car dealer with a price sheet on a few selected items. Limit selections to a good, better, best plan in each category, such as mobile video, remote starters and navigation. Car dealers and car customers will be confused by a wide assortment.
Break down the profit picture for the dealer. "You need to show a dealer that it's cheaper to get the video system from you than to keep 'stocked' vehicles on the lot," said Shutowich. He noted that for every $1,000 a car dealer adds to the cost of a vehicle, it gets an extra $20 a month in finance payments from the customer. So a $2,000 mobile video system for one customer nets the dealer $40 a month," he noted.
Use the Kelly Blue Book to determine factory system costs to show the dealer how you can provide better systems at the same cost or the same systems at a lower cost. Most factory video programs offer 7-inch screens, when it is likely you can supply 8-inch and 10-inch versions at the same price.
Car dealers typically require three-year warranties on the equipment they sell. So retailers may want to negotiate with their suppliers for the longer warranty, he said. Retailers may also want to offer the dealers non-branded merchandise. "Dealers don't want to be embarrassed by lower prices in the Sunday papers on the same items they sell," he said.
Some aftermarket suppliers will make a rep available to accompany expediters on their first sales call.
While some retailers bring the cars back to their shop for installation, the more successful retailers find a way to do it at the car dealer. Many car dealers will offer a bay to work in. Some retailers set up tents with a heater on the car lot.
A typical installation fee for a full mobile video system should be about $225.
Set up clear payment terms with the car dealer as "they are notorious for never paying or paying late," warned Shutowich.
Once you begin working with a car dealer, make sure you show up regularly for sales training and other support or "they'll forget about you," Shutowich said.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.