Third-Party Reselling: The New Industry ‘Crack’
Over a beer not too long ago, an old friend and I were comparing thoughts about the demise of so many leading retailers over the past few years. Circuit City, Tweeter, 6th Avenue, Harvey Electronics, Ken Crane’s, my old company MyerEmco, so many others. What happened? What was the cause? Was it the Great Recession? The real estate bubble bursting? The rise of ecommerce and online research and purchasing decisions? Though we agreed that all of these developments were important contributing factors, my friend suddenly snapped, “It was our addiction to flat panels. They were retail ‘crack’!”
What my friend, also a retailer at that time, meant was that many retailers oriented their entire companies to a never-ending stream of sales of high-ticket, high-margin flat-panel TVs, and because their companies were 100 percent built to rely on those revenue streams, as soon as the high-ticket, high-margin aspect of selling flat panels disappeared, retailers could not re-orient their businesses quickly enough to adjust for half their gross profits disappearing in literally a matter of months. That trail is littered with the corpses of some of the finest CE retailers who ever existed. All were dead of an “underdose” of crack, or so the argument could be made.
Fast forward to today. (Is “fast forward” still a term?)
Today, many of the finest independent retailers have embraced third-party reseller marketplaces from companies like Amazon, eBay, Best Buy, Walmart, and others, and this may have forever changed the CE sales landscape. After all, who can argue with providing new reach to nearly unlimited numbers of customers without geographic or demographic borders? For many retailers, this has created an opportunity to gain sales from entirely new sources, and has become an important part of their multichannel market strategy.
Full disclosure: My company, SVS, has successfully embraced third-party reselling, and we are considering adding new partnerships. Just like our retail partners, we see this as a phenomenal opportunity to broaden our reach and add new dimensions to our retail partnerships.