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Strength In Numbers

Mobile electronics dealers tap the benefits of new buying groups

May 2008 By Brett Solomon
Joining a buying group to improve a dealer’s competitive edge against big-box retailers is nothing new. But it is a relatively new strategy that’s gaining popularity for mobile electronics (ME) retailers.

The model for buying groups serving CE retailers never quite worked for ME dealers. After all, there are vehicle-specific specialty lines, distributors that stock a variety of products and manufacturer reps pounding the pavement and pitching just about every product line under the sun to every dealer with a storefront.

One of the biggest problems, according to industry players, is that it was difficult for buying groups to provide the deep set of services mobile dealers need. The mobile electronics industry depends on a variety of services after the sale. Most mobile electronics retailers are not really interested in a typical buying group because attaining the absolute lowest price on a product for so many different types of vehicles requires many disparate solutions.

While price always matters, the main differentiator that sets ME retailers apart is the quality of installation: it needs to be done right, right now. If not, future sales disappear. In ME, making money on the installation and providing quality service far outweighs unit pricing.

In this respect, the new ME buying groups offer more than just manufacturer incentives. The key is they provide retailers with valuable tools to make businesses run smoother.

One of the two most prominent groups serving the ME industry is In Car Experts (ICE), founded by Rob Elliott, a former dealer and installer. Elliott put together a network of like-minded retailers with a solid business plan that extends to national advertising. It strives to provide ME specialists around the country the combined power of a national big-box retailer.

ICE is supported by four pillars: business tools, group marketing, idea sharing and enhanced vendor programs. ICE is a picky group, limiting membership to the top specialty retailer in a given market.

“Although there are many successful installation shops and installers around the country, some of whom work the most insane hours and are dripping with talent, all of them might not be a fit for our group,” Elliott said. “I truly believe that we need quality retailers to be top notch. Unfortunately, this means we may have to turn down more retailers than we approve.”

Sales requirements are $500,000 per year, including labor. Membership is $300 per month. That can be a tough nut for some of the smaller single-bay garage storefronts, those that do quality work but need to grow their businesses. Due to the group’s model, many ICE members are multi-store operations with severallocations.
 

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