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Have You Given Up?
This was posted on the Vacuum and Sewing Dealer's Forum by Aaron Park from Vacuums and More Longview, WA and it was brilliant in my opinion and I felt worthy of opening the discussion here also. He is right in that many have given up. We have a great business model with many possible revenue streams that others don't have. Machines, Parts, Service, Accessories, classes. special events and a database. Then we have vacuums, sewing machines, air purifiers, central vac, heaters, other cleaning supplies, cooking supplies and yes even dog leashes.
It underscores the total reason behind why I started teaching and sharing what I do with other dealers. I am terrified that I will no longer have a manufacturer like Miele or Tacony to buy from. That is why I have gone outside of our industry for ideas. The vast majority of people in our industry have given up. They think they know it all. They think it won't work for them. They think for some unknown reason that their customers are different.
The people that are doing well are still taking chances, working very hard, trying new things, studying others, learning new things and not accepting the status quo. They are looking at their business and asking: Should I move? What else can I sell my customers? How can I improve my customer's life? How can I make it easier for my customer to buy from me? What do I want to sell today? ect
Here is Aaron's post:
This post was in response to complaints regarding MAP pricing and Black Friday. A general complaint is the MFG's do not care about us as a channel. I hate to say this....and I will put my flame suit on, why should they care about us? Let's look at it from the perspective of the MFG.
Who would you rather deal with, a Big Box Store that is a pain in the a** and orders 10,000 units or an Independant dealer that is a pain in the a** in a different way that orders 3 units.
As it was said earlier....they get their money regardless of the retail price. I believe we have given the box store our business....yeah I said it...We GAVE it to them. We continue to GIVE it to them.....We complain and whine about it but the steps needed to gain it back are hard work and it is easier to complain than change.
How did we give it to them..... 1 simple thing ..... Failure to adapt and change. Simple as that.
I go back to when I started in this business and there wasn't the internet. The only true box stores that carried vacuum were Sears and Montgomery Wards. At the time those were profit making machines and they sold for a reasonable dollar. You could compete and do well...in fact...there almost was no competition to the vacuum store. That is where you went to buy a vacuum.
We sold a variety of merchandise....Things like Eureka Hotshots, Princess, Royal uprights and Cannisters, alot of Panansonic....so on and so forth. Dealers were making good money and huge margins....profit was good....almost too good....like a heroin addict we built our business in a way that HAD to have it....
Then you start to see the introduction of more and more lesser expensive products coupled with the proliferation of the Big Box Store in more and more communities. As those box stores moved in they started to offer less expensive options at very attractive price points at margins we were unwilling to match.....I say unwilling....not unable. The problem was that these product offerings were too cheap and not to our lofty standards. The reality is that most store owners were shell shocked......they had not had to compete in a dogfight for years.....store owners had not had to actually had to develop a retail plan or fight a competitor. Sure there was always competition .... usually between competing vac stores.....the game had changed.
Now how did we GIVE it away. Like I said....we did not change. We continued to operate our businesses as usual....same product....same prices....so on and so forth. Very few of us looked at this change in our industry and said.....hmmmm I better come up with a new plan and make the Box Store compete with me. We kept doing what we were doing. The only thing that changed was that we were complaining more to our manufacturers about the injustice of it all.
Time goes on and Vacuum stores continue to cut back on their product offerings and brands. Stores start to cut back on the advertising they do....I mean how can we compete with the weekly flyer from TarWal BBS. Store owners literally give up and just exist. Store owners quit updating and remodeling their store....store owners quit selling anything that gives them less than 50% or more margin....store owners quit demoing....store owners quit advertising.....store owners started saying that the box store customer was not there customer....I can go on and on here.....
I will give you an example of exactly this.....
On my way home from my in-laws house last night I decided to stop by my competitors and look in his windows. This is something I have not done for probably over 2 years. I was saddened by what I saw....I mean truly sad. This guy was a powerhouse at one time. He was doing $50K to $60K every month in the nineties. He had a top notch store....top notch service and ran a good business. He made it nearly impossible for me to get any product line when I started up my store. Last night I saw a store that was laid out exactly the same as it was the last time I looked....2 Years ago....
This store is a junk shop....it is has no direction. A couple of Sebo vacuums, a couple of Riccars, a couple of Panasonics, 3 rebuilt Bissell steam vacs, used stuff everywhere and a bunch of Evolution product. No merchandising. No signage. No demo area. It looked like the typical junk shop repair vacuum store.
This guy had a huge business. This guy had a huge customer base. He just flat out quit. Gave up...no mas. He probably sits around and blames the world for his ills and never once looks and says: "What can I do to get better and compete?"Sadly....when I traveled as a Sales Rep I saw more of this than I care to remember....it is the norm, not the exception. That is what we have become as an industry segment....why would the manufacturers listen to us?
Can we take it back? Can we get become a force once again? Can we be the tail that wags the dog? I believe so.....but not until we decide to. There are operations around the country that are doing very well and selling a boatload of vacuums. These operations do have the ear of the MFG. They are doing well....we need to study them and copy them.....if you want to be successful do what successful people do.
We are no longer Vacuum Shops....We are Floor care retailers. What is the difference? One guy sells and fixes vacuums....the other guy solves all of your floor care needs at any budget or price point.
Here are some changes I have made.....all of these are causing my sales to grow and my profit to grow as well. These things are bringing people through the door and these people are buying.
* I have added many low end price points. Bissell, Hoover etc. I have them displayed and neatly organized. I am as happy to sell them as I am a Simplicity or Miele.
* I have alot of brands.....Miele, Simplicity, Oreck, Bissell, Royal, Dirt Devil, Lindhaus, etc..... I have selection. No one has a better selection of product than I do in the area. Think about it...the one thing we have over the box store is selection. They will never be able to match it. They won't devote the shelf space to it.
* I am advertising....now grant it, I have a very low negotiated rate with the newspaper. I am doing old school good better best ads and my ads show alot of stuff. Anything you need from any pricepoint.
* I am willing to accept lower margins on items to increase my overall profit. I am selling some items at 10% margin or 20% margin in oreder to be competetive. But.....I am selling more stuff...and I am selling more of the higher margin stuff.. You gotta bait the hook if you are going to catch fish.
* I sell what they want....if someone comes in and wants an Oreck.....I sell them an Oreck....if they want a Miele....I sell them a Miele.....You get the picture. I don't switch people unless it benefits them.
* I am a cleaning store....not just vacuums....I have a wide range of other products to sell when someone comes through the door. I mean things from Microfiber to glass cleaner to pumie sticks to grout brushes etc.....people have cleaning needs. I want them to think of me first.
I could go on and on and I am not speaking of anyone specifically. I am as guilty of alot of the problems mentioned as anyone however we need to look at our business from this perspective:
Walk through your front door and stand there.....look at your store from the consumers perspective. What does your store say to the consumer when they walk in?
ASK THESE THREE QUESTIONS...and be honest...
#1 Why would you shop here and buy from me? (from a non vacuum industry consumer point of view)
#2 What makes me so different? (What do I truly offer that no one else in my area does. What is my Hook.)
#3 When am I going to lay out and implement a retail plan to take back my industry from the box store?
Those three questions is where it starts.
PS: If you are interested in discussing this and other topics with fellow dealers, email me at howard@longviewretail.com the user name and password you would like to use and email you back with the link so that you can get on the forum.
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I just realized that I have been calling this the Tip of the Week when it is really the Tip of the Month. I don't know, I guess I was brain bead. Go figure!
