Barry Vogel

Barry Vogel
Making Margin

Sorry, day traders. This column is not about making a quick, short-term profit in the stock market. It’s about solid business models that are based on -selling 12-volt products and -services at survivable margins. “Survivable” is a key word used because many in the 12-volt arena have forgotten what constitutes -profitability and what is needed to achieve it.

At this year’s CES, I sat in a large booth with a major manufacturer that was introducing a new product. The demonstration was -impressive. Then we got down to brass tacks. The best achievable margin on the product was about 30%. I pointed out that the average overhead in our industry is about 28%.

“Where do we make money on this?” I asked.

“Well you can use this product to sell your more profitable lines,” was the answer.
More and more of today’s new technology and hot products carry slim margins. The days of 50%-plus margins on everything in a 12-volt retailer’s inventory are over and will not return. At the same time, the cost of doing business -continues to rise and retail prices continue to fall.

The 12-Volt Industry Already Has the Next Big Thing

MERA's Barry Vogel on why consumers need to be educated on why they need existing products and services

I fondly recall the excitement and anticipation I've felt when stepping onto the floor of the North Hall at the Consumer Electronics Show every January to see the new technology and innovations. Today, that anticipation has turned to trepidation. The thought that runs through my mind is, "Why should I foist new technology on my customer who still knows or understands relatively little about the products that came out last year, or the year before, or even the year before that?"

The paradigm changes, but we do not. I keep reading that the key to revitalizing the struggling 12-volt industry hinges on the next breakthrough technology. The next "big thing" is all of the great stuff we already sell. Industry surveys have shown that our potential customers do not understand iPod connectivity. Most consumers think that means plugging in the earphones. They think Bluetooth is a wireless earpiece. They don't know what USB, 3.5mm auxiliary input or iPod cables do.

In-car computing and Internet applications are becoming viable AND practical options. In-dash navigation offers a multitude of advantages over a suction cup on the windshield with a loose cord running off of it. The sad thing is that consumers aren't aware of these solutions but, if they were, they'd be interested. If 10 percent of the people shopping for portable navigation were sold in-dash navigation, 12-volt installers would have more business than they could handle. This does not even take into account the consumers who would then become candidates for speaker upgrades, amplifiers, subwoofers, add-on interfaces for Bluetooth and iPod, and much more. The opportunities are incredible, but they are not yet realities.

Holiday Wishes for the 12-Volt Industry

It's time to reflect on the year that closed and anticipate the year to come. Here's my wish list for 2010 and beyond. 1. May the 12-volt industry find an identity and a message that resonates with today's consumers. They are fickle, picky and impatient. They want what they want, and they don't care what…

It's Time to Believe

The definition of magic is the suspension of disbelief. Today, many in the automotive electronics industry believe the resurrection of the traditional car audio category would qualify as magic.

Time For a Name Change

Despite the current economic crisis, the mobile electronics industry is evolving so quickly that it’s time to change the name of the “car audio retailer” to the “automotive electronics specialist” (AES).

Time for Specialists to Take the Lead

Is your business doing as well today as it did five years ago? You’ve heard about the industry trends. You’ve heard about iPod and MP3 integration. You’ve heard about OEM integration. You’ve heard about the changing wants and needs of today’s consumer. Above all, you’ve heard about the need to change. We’ve heard the excuses: “I can’t afford an iPod/MP3 display.” Or, “Nobody’s asking for it.” Or, “My customers aren’t interested.” Listen up! It’s time to lead, follow, or get out of the way. As specialists, we are expected to be the leaders…the go-to guys for new technologies and trends. If you aren’t the leader in your