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A Return To Roots — Selling (Profitable) Amps And Speakers

Louisville, Ky. – Car stereo retailers are facing an identity crisis, said Mark Miller, owner ofWestminster Speed & Sound, Westminster, Md., in a seminar he lead on “Regaining the Excitement in Mobile Electronics” at the recent MERA Knowlegefest, here.

Car-stereo retailers have lost their way after branching out in too many directions, and they’ve stopped pushing their most profitable bread-and-butter products, including amplifiers and speakers, he said.

“I was hearing the amp and speakers business was dying because there were now premium OE systems, so I thought I would sell people mobile video and remote starters,” Miller said. The result was he had his best year ever in 2001, doing $1 million in sales, but one of his worst years in profits. After a few painful sessions with his accountant, Miller returned to a focus on selling amplifiers and speakers, he explained.

The result was that last year Westminster upped its car audio sales and profits by 40 percent and enjoyed its best year in the category since it entered the business in 1990, Miller said. How did he do it?

First, he said, he rearranged his staff so that he could return to the sales floor for about 65 percent of his work day, because, after all, Miller is his own best salesman, he said. Previously Miller spent most of his day “doing paperwork and meeting with ad guys on the newspaper,” he said. Miller hired an office manager and a part-time inventory/merchandiser to replace his office duties and then he fired a salesman that he would replace, he said. Miller still sets the terms with the manufacturers, but the office manager does all the reorders.

Next, Miller said, he re-evaluated his demo car. It was a Honda Civic that mainly showed off $39,000 in performance parts. To pronounce his return-to-car-audio, Miller leased an Acura NSX and installed a system upgrade that attached to the factory Bose system.He put a 10-inch sub under fiberglass in the passenger foot well and took the car to car shows. “I made a statement. You can add to a Bose system and get people excited. Just use a new hot car,” he explained.

The next change was a new demo board. Previously Miller had four, which meant walking customers back and forth between the boards (and losing direct A to B comparisons). “I spent a year thinking about what I wanted to do. I decided to make one inclusive display for my car audio equipment, where I could demo any head unit with any amp, speaker, subwoofer or processor I sold,” he said. Miller dropped some vendor lines to help simplify the process. He also included stock OE speakers in his display so he could demo them against aftermarket upgrades.

Miller told customers, “Let me show you what your Bose system sounds like, and here’s what $200 speakers sound like, and here’s $300 and $400 speakers,” he said. A shop employee built the display, which set Miller back $35,000. He financed it with a term loan for $600 a month (which he took from his ad budget), he said.

Next, he built a portable display and put it in the waiting room and on a counter so store visitors could play with it at will. “I took a $99 CD player and hooked it up to an MTi switching system with factory Mazda 5x7s and then a $150 pair of aftermarket 5x7s and a $300 pair,” said Miller. He also brought the display to car shows.He said the result is, “People will come up to you and ask if you have time to upgrade the speakers in their car,” adding, “When you hear Mazda 5x7s and then replacements they sound three times better.More than 50 percent of the people want to upgrade speakers.”

Miller’s new car demo boards were finished in late November. He said he did $170,000 in car audio in December 2004, increasing his margins in amplifiers, subs and speakers from 40 percent to 60 percent.

He claims, “The car audio business is not dying, it is not going away. It has just been forgotten by the people that were its best ambassadors … us.”