How Distributors Make Retailers More Money
DSI's Jerry Satoren
Dennis Holzer,PowerHouse Alliance
In our annual distributor roundtable, appearing in Dealerscope’s April issue, we ask some of the industry’s leading distributors to name the single most important thing they’re doing this year to help dealers make more money than they did last year. Here’s what they had to say. Stay tuned to Dealerscope.com for more distributor insights and revelations.
Jeff Davis, D&H: The most important thing we’re doing to keep dealers profitable this year is to continue to deliver new, cutting-edge products. These would include 4K-resolution and Ultra HD TVs. To help dealers diversify, we’re branching into new categories such as sports and recreational goods, specialty housewares, and higher-end home automation products. Also, we offer products to retailers that adhere to UMAP policies, to preserve margins.
Gerald Satoren, DSI: The single biggest thing we are doing with our dealers is to make sure they are fully engaged in the large-panel, 60-inch-and-above, TV business. DSI probably serves more brick-and-mortar independent retailers than anyone in the country. We stress to them that the purchase of this size TV is right in their sweet spot.It is typically the main TV in the home, an involved and carefully considered multi-person purchase decision, usually has to be delivered and installed due to the size, and is more likely to carry the profitable add-ons like sound and furniture. We focused here last year and our results clearly are a reflection of how our dealers embraced this opportunity.We want our dealers to continue down this path in 2013, with the additional benefits of the emergence of Ultra HD as well as OLED later this year.
Bill Stewart, Petra: Our dealers are always concerned about avoiding margin erosion. It’s challenging for dealers to consistently maintain profits, since there is a plethora of retail and online choices for consumers. Working with an experienced accessory distributor like Petra is imperative. We advise our dealers on how to drive their overall profits through accessory add-on sales opportunities. We also support our dealers through reliable fulfillment solutions, competitive pricing, flexible payment options and freight discounts, creating even greater profit margins.
Tom Bamrick, Ingram Micro CE: A major focus in 2013 for IMCE (Ingram Micro CE) is to provide our partners with value product adjacencies’ opportunities and high-margin accessories. IMCE has significantly increased its growing non-traditional consumer electronic product categories such as home appliances and outdoor recreational products, in an effort provide dealers with high-margin, mapped product adjacencies. Supplying the dealer with relevant accessories such as cases, cables and headphones should enable the dealer to increase overall order sizes as well as increase the margin potential of each order. Everyone should be thinking “attach.”
Jack Halperin, Almo: We are working with our dealers to create customized ‘plan to sell’ programs focusing on key categories at tiered pricing levels that fit their business model and customer set. By narrowing their offering to only go-to models in entry level, core and step-up tiers, salespeople can cleanly help customers navigate to the model and feature set that meets their needs. The higher the tier, the higher the margin.
Curt Hayes, Capitol: We’re working closely with our vendor partners who are helping us to offer special purchases with high value. Bundling, too, is more important than ever, since it allows our customers to significantly increase gross profit margins.