Shining Light on the Industry
In 2012, regional dealers fought against online competitors on both pricing and tax issues, struggled to increase average ticket prices on profitless TV sales, and wrangled with a struggling economy that kept many of their customers in a financial vice grip.
But they didn’t take these challenges sitting down. They changed their product mixes, improved marketing and merchandising strategies, increased profit-rich service offerings, and embraced new training initiatives by some vendors who are showing a renewed appreciation for regional consumer electronics and appliance dealers.
2013 won’t be much easier, but the dealers we recently spoke with felt the changes and strategies they deployed last year will help them forge ahead.
Here’s what they had to say.
Dealerscope: What was the biggest challenge you had to overcome this year, and how did you do it?
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 [explain] to the customer how important it is to pay sales tax, because that covers all the municipalities, the police, the firefighters. We tell them, Granted, it can be a large number, but think how good you’ll feel when you have all the goods and services that you expect in your towns!
Plus, we try to explain how important it is to support the local economy, because people like us support the high schools, the baseball and football teams, and all the other stuff. All my people are in the community, so we’ve put all those dollars back into the community. It doesn’t go outside the state. We give ’em a little bit of guilt, and it usually wins them over.
Ultimately, they want to buy from us, but because of the 6.25 percent [sales tax] in Massachusetts, it’s a big number. But 99 out of 100 [people], once you talk to them, they understand it. And they understand we’re here before, during, and after, and that we’re part of the community, like them.
We say, You know, we don’t want to pay tax, either. I’m not standing out over at the Capitol Building in Boston saying, Take my customers’ money! But it’s a huge hot-button issue.
The second thing is the cost of health care for the employees. The only way to get around that is to either raise deductibles, or have the employees pay a larger part of the share. What we do is have a meeting, and I tell them there are only so many things I can do. I can’t give 10 paid holidays, three weeks vacation, five sick days and infinite health care. So I let everyone pick. I say, You can’t have everything, because we can’t afford to do it and keep everyone employed. Pick one through four. What’s the most important, and what can you do without?
Everyone says health is number one, so we put more money into health care. Vacations are important? Great. You don’t need 10 paid holidays? Okay, take it down to four.
I use the money saved from one section, and put it into another section. It’s a team approach, because you can’t have everything. I’m included in it, because it’s my health care, too. Whatever we all decide, we all decide.