How Regional Dealers Beat 2012’s Toughest Challenges

Falling profits, paying for healthcare, hiring good employees top the list

Quite frankly, I think that’s one of the reasons why the vendor community has chosen to go to UMRP (Unilateral Minimum Retail Pricing) on a lot of their products. There is a contingent of retailers out there that chooses not to make any money, or that chooses to use the advantages they have from a buying perspective to drive the price down.

Oftentimes, the big boxes are merely delivering product; they’re not selling anything. In fact, we’ve seen with some big boxes that they don’t even have certain products on the floor, but will put them on their web sites and they’ll destroy the margin opportunity for all their competitors by destroying it on their web site, and then have somebody fulfill the sale. It’s just a strategic move. And I understand, I get it, but I don’t agree with it – particularly from the vendor’s point of view, because they’re getting no value at all. And I think at least the smarter vendors are starting to wake up and smell the coffee. Dealers like ourselves – and I’d say most regionals fall into the same category we do – we stand and deliver the message and sell better product. At the end of the day, if we don’t tell customers the value proposition that product offers, it never gets delivered, period, because they’re certainly not going to get a very good presentation in a big-box store. That’s our reason to be, if you will.

The UPP policies are a step in the right direction, but I think there’s going to have to be a further analysis of that, and I think we’re going to see a proliferation of programs that resemble them, and maybe even product that’s differentiated for our channel that ultimately can allow the manufacturer to make money, because if they can’t make money on better product, then there’s no reason for them to be, either.

Ed Robinette, Morris Home Furnishings, Fairborn, Ohio: The biggestchallenge is finding good, qualified salespeople. We had a couple of people who left and opened their own businesses, and we were lucky enough to have them for a very long time. That’s been a difficult thing to do. In fact, I’ve put myself back on the sales floor quite a bit to help. We do have some really good people, but they’re spread more thinly, and it’s difficult to find new good people and to train them. We are continuing to use every method we can think of, but the best way to get good people is networking through other employees, and finding them that way. Wehave several hundred employees, and all of them know several hundred people. We’ve also found people in other jobs in the company who felt they were not sales associate material, but they really are. We’ve actually developed a couple of very good people that way. It’s working out pretty well.

We have a sales floor with furniture specialists, electronics specialists and bedding specialists. So the other thing we’re doing is to let people know in all areas that they have an opportunity; if they want to step up and become part of other areas, they can. If you’re selling furniture but really do like electronics and want to be able to sell both, if you can demonstrate your ability to do it and you will come to all the trainings and learn it, then we’ll allow you to sell that also. That’s allowed us to have people that can work both areas and as backup when we need them.

Alan Lavine, Percy’s, Worcester, Ma.: How to get around the online sales tax issue. When customers come in, and we have the same goods and services as online, as well as the same prices with the same shipping, delivery and everything, then the customer wants us to eat the sales tax. That’s one of my biggest issues, a major issue. What we do is talk to the customer and tell how important it is to pay sales tax, because that covers all the municipalities, the police, the firefighters.

Editor in chief of Dealerscope
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