We are running this letter from Gary Woodward, of McLean, VA-based Hurley’s Auto Audio, Northern Virginia’s oldest car electronics store. It’s opinion’s are not our own. We offer it in case it fosters some healthy discussion between suppliers and dealers, both of whom are challenged by the car audio market and a still rough economy in many areas of the country.
I’m calling you out….
We all are aware of how competitive the car electronics business has been for the last several years. I want to discuss some of the competitive pressures that we, at Hurleys Auto Audio deal with daily:
1-The aftermarket factories cannot keep up with technologies in today’s cars. I have let $500,000 in business leave here in the last three years because the Chinese/Japanese product resellers cannot spend the money to properly evaluate the newer high line cars. In the race for sales volume there seems to be no money left for research and tech support. A wait of an hour is becoming the average with some of the leading companies. The world does not all drive Toyota and Chevy…Stack it up, move the numbers. Tech support controls profits.
2-The products that we have offered seem to have no market research as to whether there is a market for the product. I’ve got at least four dead dogs in the showroom to remind me. I guess no one hears on the exit interview “what the heck were we thinking?” or were they even thinking?
3- Delivery dates, even when stated are often missed. Yeah, we will ship next day-but the order won’t go out for two days. You call the company and you get a “deer in the headlights” kid on the phone who has no authority. “We’re sorry” does not put money in the bank for payroll.
4-Your product blows up in the market place leaving me the dealer and my customers (that I have to face and make good on the deal) holding the bag. One major radio/GPS brand sells units with Bluetooth that does not work if more than a foot from the unit. Come on! Several vendors have gotten me for several thousand dollars in unfix able, unsellable goods. They have no shame as they slither back into my store a couple of years later trying to “make it up to me” for 10 cents on the dollar lost; but not the customer goodwill that I lost.
5- There is no go to market strategy. A couple of major lines sell their product on the net at their own web site at MAP (Minimum Advertised Price). MSRP (manufacturer’s suggested retail price) is gone. This effectively puts a ceiling on the price that product is sold at. Low prices are tolerated and probably encouraged on the Internet, effectively putting downward pressure on the price. The factories have this designed to hit price points that they feel increases the volume of sales. Do you know the meaning of minimum and maximum price fixing? There is an “invisible hand” controlling pricing in the marketplace.
6- Distribution is out of control. I can purchase one brand of electronics from two authorized distributors and three wholesalers who are unauthorized, but tolerated as they can move product at low prices without any costs of support. Product is being sold on the Internet that is just several dollars above my wholesale costs. One distributor of product, who is authorized to sell in my territory does not support the full line (leaving me with gaps in product needed to sell). The distributor that does stock the full line and has trained sales and install support cannot sell me due to territorial limitations.
How does this make sense?
7-The associations seem to just want to give each other awards and get their pictures taken at a cocktail party. Where is the “service” in member services of the associations? Do I call the teamsters?
8– Now our Chinese manufacturers are selling direct on the Internet (Amazon). Do any of you need me?
I call for the participants of the electronics business, who can, to try to clean up the business. Act like you want my store and others like mine to prosper in the business. Suppliers, I’m waiting out on the sidewalk! Come on out!
Gary Woodward
RAY WINDSOR OUT ON THE SIDEWALK TOO!!
To Gary Woodward, Hurley’s Auto Audio
From Ray Windsor
Date January 22, 2014
RE Visit on Your Sidewalk
Gary, I suspect that your laments and observations are shared by more than a few specialty retailers. On the other hand, taking serious and effective action toward resolution is spotty at best. In order to achieve critical mass in the direction of solution, the following events are required.
Individually, specialty retailers will have to decide to take charge of their conditions.
Collectively, specialty retailers will have to consistently execute on these decisions.
Absent these two events, specialty retailers may float along similar to how a cork floats in a toilet bowl; not so bad until someone uses the toilet bowl for its intended purpose and then flushes. The specialty retailer will have no control over who uses the toilet, when the use it and when the flush handle is pulled.
I have made some comments and observations to your call out points…
1. Tech Capability and Capacity:
There are a few companies and a few retailers worth knowing who are capable of and willing to trade and share information.
Waiting for common manufacturers to answer questions they have no answers for is not a productive activity.
I think it is important for retailers to understand how the products and services they offer are successfully applied to market. It must follow then that the suppliers and manupacturers must also understand how their products are successfully applied to market. Specialty retailers should understand their supplier’s capacity and capabilities before becoming dependant on that supplier.
2. Appropriate Product:
It has been said “there are no bad products, only bad prices”. I am informed that when a supplier offers products for sale to a retailer, the retailer makes a decision to purchase same. Therefore each party to the transaction shares equally with 51% of the responsibility for the transaction.
A solution would be for the retailer and supplier to make the first transaction for newer or untested product with an agreement for the supplier to take back unsold product in return for sellable product. The supplier can then move such products through retailers who are successful selling it.
3. Shipping Time:
“Fool me once shame on you. Fool me twice, shame on me”. Qualify your suppliers before becoming dependent upon them. Use a PO (binding contract) spelling out the details of your expectations with the order. Follow up with your order and secure tracking information that supports your expectations. More work for the specialty retailer, yes. Fail to complete this work and risk your relations with your consumer.
4. Defective Product:
Qualify your suppliers before becoming dependent upon them. All suppliers have occasional product failures. Retailers know this. How the problem is resolved usually counts for more than the actual problem.
It is true that the only asset a retailer has that is worth talking about is a “long-term and profitable relationship with the consumer. Unfortunately most of the suppliers you have chosen are not (even remotely for many) acquainted with this fact. As a retailer you have a responsibility to that one asset, to insure that you at minimum meet his expectations. When a specialty retailer authorizes a consumer to buy a product or service the specialty retailer must realize that the consumer’s experience with that product or service informs the consumer’s participation as an asset to the specialty retailer.
All products have occasional failures. Consumers know this. How the problem is resolved usually counts for more than the actual problem.
5. Go To Market Strategy?
A specialty retailer who is surprised by his supplier’s failure to have and/or employ a consistent “go to market strategy” OBVIOUSLY failed to qualify his supplier. As regards your pricing comment about the invisible hand controlling price, I am compelled to respectfully disagree. I contend that the hand is not invisible. The hand is quite obviously driving price down in an effort to increase unit velocity today, regardless of this activity’s impact on the supply chain, retailer’s relationships with consumers or tomorrow’s business.
6. Distribution Discipline:
You lament that distribution is outta control and then complain you can’t buy from a distributor because of control over which territories in which he is allowed to sell. The real problem is that the suppliers have no consistently applied “go to market strategy”. Rather the strategy is often “do what is convenient today”. This problem can be solved by qualifying your supplier. If specialty retailers elect to do business with suppliers who meet their expectations, the number of suppliers who are willing to meet such expectations will grow.
7. Service Associations:
Service associations often start with the best of intentions. Then they hire an executive director whose main job becomes keeping his job. To add insult to that, the association uses committees to look into problems (easy), develop solutions (more difficult and most often diluted due to competing egos and agendas) and then to execute the solutions (nearly impossible).
I can only suggest that you join one and try to affect change.
8. Need for Specialty Retailers?
A specialty retailer has exactly one purpose as far as a supplier is concerned; present the brand to market in a manner consistent with the supplier’s expectations. Of course that includes purchases. There is only one way a specialty retailer can be needed by a supplier; add value to the delivery of product to market that the supplier cannot do himself or do cheaper in some other channel.
The specialty retailer’s challenge is to learn the supplier’s expectations hierarchy. Are sales the primary driver or are there some brand building expectations as well. It is OK if sales is the primary driver as long as there are some goals, a plan and discipline.
With regard to the “call”. When and if a supplier(s) visit with you out on the sidewalk, please be prepared to:
1. Define your expectations.
2. Determine if the supplier can and will meet your expectations.
3. Make and execute a decision to support that supplier(s) who can and will meet your expectations, with your passionate advocacy for that supplier to your consumers and your peers.
Best regards,
Ray Windsor
President
if you do not support the small, special shop you manufacturers are doomed to the best buy, crutchfield, amazon, and installer net markets.
very little high end. take your pick.
gary
Well you website looks like it’s from the 80’s So I’m sure that does’nt help.
thanks for your input.
I agree. Our costs are lower. The margins are getting thinner. MAP is getting lower and internet competition is pushing prices down even more. Yet they still expect us to INCREASE our buy by 10% over last year! SO we have to move more product at a lower price just to meet their goals?
Essentially working harder for less $.
No thank you
Lets hope that The big box stores have found out they drove all the profit out of the 12 volt market close up that part of there shop and go away.
But lets face it and this needs to be said! Kids today do not have the knowledge to open the dash on a new car and work on it. Doing so could cause all shorts of problems with the auto’s computer system that now days also is in charge of the breaks steering and gas pedal.
And honestly the day will come when shops can’t do anything but Plug and play.
The manufacturers are going to have to give us something to plug it into.
The big old and Popular manufacturer of Car audio got what they wanted a big part of the OEM market, it seems thats where the money is now.
WHY do they need Retail?
I can point out a lot of reason’s why and they will find out soon enough. Look at GM’s new effort of trying to teach the GM buyer how to use the stuff in his car. The sales man at the dealership is not going to know how to do it Things like Bluetooth add mp3’s set up this or that.
I wonder if the Consumers is getting the Tec support the Brick and mortar store is today or if its you buy it you figure it out.
My suggestion is if the Manufacturer is selling it online drop the line and tell them why we all have a vote if you can’t compete with them don’t waste your time. Have your customer buy it online and come to you to have it installed. Just charge more for Labor. Its 149.95 at the store and 129.99 online Go buy it then I’m not price matching.
Then bring it to me to put in if its broken its on you to have me take it back out so you can send it back to the manufacturer! Let them know what the Difference of Buy from me get support and buy from them with no support is. Or price match no support just like they would give.
Agreed. If customer wants to bust our a** , no problem. Order it online yourself sir.
We will install it for you.
Oh, you have an issue. No problem.
Pay up.
Just try and remember people shop at Hurley’s for YOUR reputation and YOUR service, NOT becuase you carry brand “X”. You might be wasting yourself hoping for things to go back to the good old days. In these tougher times – use your energy to make sure EVERY customer is getting a GREAT Hurley’s experience. Is it time for a fresh coat of paint? Maybe re-laminate the front counter… or spruce up the customer waiting area. You don’t have to spend a lot of moeny to remind your customer’s you care.
Hell yes.
sounds like you’ve been to my store.
thanks
Gary I agree with you all the way! I have been in business for 46 years this coming July. Today’s climate for a retail store is so difficult, especially when you add in the walmart’s and best buy box stores in the mix. I know of other store’s like mine across the country that are for sale and or are closing because of this mess that the manufacturer’s and distributor’s have caused with the internet. I even see some of my distributor’s sailing on Ebay below what they charge me for a product. The service side is only one part of the problem that must be addressed and soon.
I agree with some.
4-Your product blows up in the market place leaving me the dealer and my customers (that I have to face and make good on the deal) holding the bag.
5-A couple of major lines sell their product on the net at their own web site at MAP (Minimum Advertised Price). MSRP (manufacturer’s suggested retail price) is gone.
6-Product is being sold on the Internet that is just several dollars above my wholesale costs.
MY Business will support products that MEET OUR NEEDS. The day of Manufacturers DEMANDING things is OVER.
WHILE at the same time, Giving me PRODUCT that fails and needs updated EVERY F****NG YEAR.
BTW, Can somebody please become the President of xxxx AMERICA. JUST to TELL the JAPANESE Management to go TO HELL!
(I will pay for that)
Product that does NOT perform and we are THE ONLY store in the whole country with the problem. (YA, WE LOVE pissed off customers and sending back returns)
Product is found on the internet at sheet cost, and WE ARE EXPECTED to make a PROFIT WITH THAT SAME BRAND NAME? knock, knock. CUSTOMERS DO NOT CARE ABOUT BRANDS ANYMORE.
BTW, Why get rid of MSRP retail? KOHLS has it figured out. But then Kohls is probably managed by people that know what the hell they are doing.
The 12VOLT Summit is Dallas was a FAILURE. NONE of the recommendations BY PEOPLE OUTSIDE our INDUSTRY were acted upon.
These are facts.
I am not whining, I HAVE SOLUTIONS.
I AM ADJUSTING to what works. If it’s a NEW Brand name in my store every year.
SO BE IT.
9-solutions to problems that do not exist.
gw
I think that is everyones complaint.
Its tough to understand why I cannot get product support from a Florida based audio company, but the local wire fire chop shops get the help.
The 12v industry used to be the place were there was inovation that exceeded what the automotive industry could produce, now its a bunch of out of date, play catch up junk.