Getting the Goods on Buying Groups
BOB LAWRENCE: There are two major issues for our group: dealer attrition in the market—not dealers going out of business, but dealers closing stores [and] shrinkage in the numbers of stores. This creates a marketplace vacuum, forcing consumer to go to big-box stores. From the manufacturer standpoint, it’s channel management—how do they handle various distribution channels? On the CE side, the best example is manufacturers setting extremely high minimum purchase thresholds for the dealer to buy direct. One very big CE manufacturer has raised this to the millions of dollars. So the dealer must buy from a distributor, who has a profit motive, so now the dealer is no longer price-competitive, which forces his volume down more. Our solution is Expert Warehouse, which creates a logistics solution. Members can order as little as $5,000 of multiple lines, receive the goods freight prepaid and at a competitive price. The reason it works is we’re not for profit—that’s not our motive.
BILL TRAWICK: We’re certainly not facing the issues of some of the other groups who just had changes. We have a limited membership, most of it is by design, we’re not actively looking to increase it, but if someone did appear that fit with the direction that NATM’s going, we would consider them. But it’s not our driving desire to add members just for members. One fortunate thing for us, because we’re made up of the larger regional players, is that of our 12 members, all are opening stores and some are opening multiple stores, so we get a lot of growth each year from our current membership base by opening stores. We have criteria that make it somewhat limited, because we do try to protect regions with existing members. We have been called by some of the other retailers out there about the possibility of joining but there are geographical conflicts in some of the markets we play in.