The Tough Get Tougher
n Hager: In our case, we decided to move up. The amount of money we make now is so small on a 42-inch that you can’t get enough volume. So we got into other things in line with what we think will be the next profit boom, which will be the HDTV transfer. We’ve always been in custom, but it’s hard to separate retail from custom now. If you come in and buy a TV and walk out the door, that’s retail. But if you buy a TV and have someone deliver it and mount it above the fireplace and install a new stereo, to me, that’s custom. We’ve always had our own service department and are authorized factory service centers. With us, it’s not like customers run in, pull one off the shelf and go out the door, because we sell experiences, and there’s the way we will obtain our profits in the future—by providing quality, reliable solutions that make sense.
DEALERSCOPE: What were the biggest disappointments for you within the industry this past year? How could they have been avoided?
n Liddiard: The hardest things we’d really had to adjust to were product availability and the decrease in pricing through the year, and being able to manage inventory levels. You bring product in on a special, and all of a sudden, you’ll get a price decrease from a vendor. It’s hard to manage inventory and profitability based on those things—pretty much on televisions in general. If you buy too much of anything, you’re always concerned about prices dropping and getting stuck with older product. That’s a challenge, as an electronics dealer—not getting burnt with older inventory at a higher price. But for the most part, I tip my hat to manufacturers; they’ve been pretty good about price protection.