Groucho Marx refused to join any club that would have him as a member. For stubbornly independent-minded consumer tech retailers and dealers now facing troubling times as lone wolves, is joining a buyers group a good idea?
For those thinking that perhaps facing the challenging post-Covid world would be better if part of an informed collective, explaining exactly what a buying group is is probably a good starting point before deciding if to join and which one.
“A buying group in general is a collective of similarly positioned and like-minded businesses that see an advantage in banding together in the pursuit of creating a national entity in which the whole is perceived as greater than the sum of its parts,” explains Ted Green, president of the tech business consulting The Stratecon Group, a former buying group executive, and host of a tech industry blog at Strata-gee.com.
A buying group “allows a dealer to leverage the size and scope of a larger organization in terms of buying power, resources, and knowledge base,” echoes Stephanie Keough, senior buyer for Philadelphia’s specialty dealer and custom integrator World Wide Stereo, a member of the ProSource buying group. “The thing I value most is the collaboration with peers that, despite perhaps the competitiveness, the dealers in the group are working towards and creating common goals and belief that the sum of the whole is greater than its individual parts.”
The value of collaboration is echoed by many buying group members. “The idea of joining a buying group is generally financially driven, but this is actually the least valuable benefit if you choose the right one,” observes John Palser, founder and principal of Denizen, a three-location custom integrator headquartered in Omaha, Nebraska, and a member of specialty retailer and custom installer buying group HTSA (Home Technology Specialists of America). “The collaboration with like-minded integrators in other markets is far more rewarding.”
Buying Group Programs and Services
Buying groups started out to provide smaller retailers the buying clout and volume discounts usually reserved for larger operations. But buying groups now offer an ever-increasing number of programs and services including inventory control, e-commerce and digital marketing services, channel intelligence, operational support, recruitment, floor planning, consumer financing and credit card processing, showroom design market awareness beyond a local area, new brand exposure, vendor exclusives, sales trainings, HR functions, insurance, risk management.
Considering this wide array of offerings beyond mere buying power, “‘buying group’ is actually an outmoded term,” observes Tom Bennett, president of AVB BrandSource, which boasts an extended family of more than 5,000 dealers. “Our group has long since evolved beyond buying clout alone.” Patrick Maloney, EVP of membership at the 5,500-member Nationwide Marketing Group, notes that upon joining a buying group, “independent business owners immediately add an entire team of experts who works on their behalf, providing them with the tools and services they need to succeed.”
Buying groups often specialize in specific types and sizes of consumer tech operations. “Many long-time buying groups started with exclusively retail members and have since transitioned to a more blended retail/integrator membership,” Green explains. “Some remain mostly retail such as Nationwide, others have a mix of retail and integrators such as HTSA or ProSource, and others remain mostly integrators such as Azione Unlimited. Some groups are for large footprint appliance/furniture retail members like NATM, while others favor smaller footprint specialty members, like HTSN.” Green also notes the existence of distributor buying groups such as WAVE, Powerhouse Alliance, and Catalyst AV, and manufacturer sales representative groups such as the PureTech Alliance.
Reasons Not To Join a Buyers Group
If your instinctual operational philosophy may hew closer to Groucho’s misanthropic independence, one primary reason for not joining a buying group is what Green describes as “a not-insignificant amount” of money to join. Not only can buying group dues outweigh the benefits you may get back from programs and services, but buying groups “expect” if not often outright require attendance at multiple member conferences and conventions throughout the year that cost both money and time away from your business.
Buying group execs tout the tangible and intangible return on dues investment. “Any dealer doing over a million dollars in business should be in a buying group because they will quickly break even on membership dues,” asserts Richard Glikes, president and CCO of Azione Unlimited. “The other benefits of conferences, training, education, and networking will guide them to more prosperity in the future.” Adds Jim Pearse, president of ProSource, a 600-plus custom integrator and specialty retailer group “financially, it makes a lot of sense for any business to seek out the benefits of any buying group as the value of the benefits far outweigh the minimal dues.”
Ultimately, the decision to join or not to join a buying group “really comes down to what fits the different businesses and what feels right after joining in the group meetings,” advises Jason Horst, director of marketing for BrandSource member Famous Tate Appliance & Bedding Centers in Tampa, FL. “Like many independent dealers, we have a lean internal staff, so having group resources like HR professionals we can consult with for hiring and recruiting are very valuable.”
Which Buying Group is Right For You?
Not only are there buying groups appropriate for certain types of retailers and dealers, but there are also many differences between how various consumer tech buying groups are organized and operate. “Probably the biggest [difference] is the level of sophistication and progressiveness of how each group monitors and deploys the most relevant and forward-thinking resources, programs, and practices,” explains Jon Robbins, executive director of specialty retailer and custom installer buying group HTSA (Home Technology Specialists of America). “Some groups go for quantity of dealer and retailer member companies and may focus mainly on financials. Others go for quality, limiting memberships to best support members and deliver premium services to all.”
Interested retailers and dealers may want to peruse programs and services offered, check out conference agendas, attendance requirements and costs, or even get recommendations from existing members of various groups. Some buying groups are non-profit, which means their boards of directors are chosen by members, and group finances are completely public and are available for inspection so you can examine where your dues dollars are and will be spent.
Dollars and sense make prime practical reasons for picking a particular buying group, but another consideration is if, unlike Groucho, you are willing and able to play well with others. “The biggest decision point is reviewing the current members and determine if the prospect would be a good fit with our collaborative culture,” notes ProSource’s Pearse. “There are many options in the industry for dealers and I would always suggest to do your research and check with references to find the right fit.”
See also: Buying Groups 2022: Overview And Outlook
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