12 Volt Heads Up on Amazon

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Amazon boxes

Almost all shoppers, 90 percent, will compare your shop’s prices against Amazon, according to a survey by BloomReach.

55 percent of shoppers will start their search on Amazon, and a full 90 percent will end up there eventually, before making a purchase.  Astounding.

More car audio dealers tell us they assume a customer has shopped Amazon when he walks through the door and many larger car audio stores are prepared to match Amazon’s prices.

What’s more, matching Amazon’s prices may not be enough.   The web giant’s customer service is so strong and its reach so vast that some larger retailers feel they must be cheaper than Amazon to compete. BloomReach estimates 94 percent of consumers plan to shop on Amazon over the holidays, according to its survey in September.

“The new thing is you are not just fighting about price anymore, you’re fighting convenience.  [Shoppers] want to stay in their boxer shorts and shop and I haven’t seen any people in boxer shorts in my stores.  That’s what we’re fighting against.  Sometimes I feel obligated to be cheaper than Amazon,” said Mark D’Elia, VP of Operations at Sound FX, RI.

To fight back, many larger car audio shops have switched to a model of selling radios and some popular amplifier and subwoofers at a discount and then selling accessories and labor at full price.

al-eds-price-match to fight amazon

Al & Ed’s Autosound, CA has been price matching Amazon for years.   The three highest grossing stores in the chain, are those that aggressively price match.  And they are also the most profitable, said Product Manager John Haynes.

He led a seminar on competing against Amazon at KnowledgeFest this summer. “Millennials, given the choice, will buy online,” he said.  So retailers should confront the Amazon elephant in the room.   “Raise your labor rates and meet the customer head on, and match Amazon.” He suggests even putting a sign in the window that says “We match Amazon.” But the strategy doesn’t work unless you are willing to get the price for labor your techs deserve.

Foss Audio & Tint, WA won’t lose a deal to Amazon. Salesmen explain the store provides an extended warranty and soldered and heat shrunk wiring connections on the install.  “If that’s worth something to them we usually come to a deal.  So if an Amazon product cost $150 we may agree on a price of $200,” said Jay Small.

Most retailers said they are not seeing more customers walking in with Amazon product to install.  And most said the number of customers who want you to match Amazon’s price is still small.  Although one retailer said it’s as high as 25 percent of his customers.

D’Elia said, “I learned from a very successful retailer to do whatever you can to sell the radio and make money back on the labor and accessories.  And have your push lines in amplifiers and speakers, but as far as the radio is concerned, sell them and do whatever you can to sell them.”

The same is true in  TVs (which Sound FX also sells).   “Everyone is always so concerned about the price of the TV and no one cares about the speakers and amplifiers.  But they are super concerned about the price of the TV.  If you, in their minds, overcharge them by $25 you hear about it.” In car stereo, customers are most concerned about the radio price, “Everyone always shops the radio so you’d be crazy to try to get more money there.  In today’s world, it doesn’t work.”

 

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11 Comments

  1. Mark Miller at Westminster speed and sound I like his take on this topic. Keep up the great work! 🙂

  2. What has been working great at my store is reducing inventory, investing in hard to find products, raising inventory in installation accesories, raising prices in installation accesories, raise labor prices, staying ahead of customer by advising them to buy on line and bring the product back for install. The true is that mom and pops retailers can not compete with online retailers so stay ahead with labor prices, need it accesories and customer service. Online retailers can not compete with labor so put two and two together. The more that online stores sell the more demand for installation labor, more you can charge for labor, more demand for installation accesories for those do it your self customers.

    1. In tesponse be very careful on installing a item you know nothing about and is faulty and causes damage to a vehicle you are installing that internet product. Why, risk your name and insurance cost. Its jus not worth it. Once people see you wont install it they will stop bying refurbs. Find a better product amd cut them a deal and make the money on everything including labor. Best of luck on internet.

  3. VERY REVEALING… These responses to the Amazon and Internet in general issues probably cannot be considered as a scientific in nature or scope type survey. That said if these anecdotes are anywhere near representative of the industry at large they reveal a great deal about how the current condition has become a reality and where the next 3-5 years will take us. Either way we have some work to do.

  4. Of all the stuff Amozon sells, how much is gry market goods? Some manufacturers list straight on online. If it’s not from. An authorized dealer you have no warranty. Post the notices they display on factory webpages in plain view. Also the idea of free install when bought in store might work for you however custom work will still cost $ some veicals do not get free labor on some items but will get a basic install discount. I hate free labor but honestly if this is the only way to make money then you do what you have to. One thing amazon don’t do is install, they get dealers in your area to partner with them. Hey a customer walks into your store, sell him something else too.

  5. This is the same thing that has been plaguing the 12-volt industry for years. That is why MTX chose to go the route that it did in 2013. It was painful for us and we lost some dealers but today our dealers know that if a customer shops a price on Amazon it is going to be at the same price the dealer is offering it at so the dealer doesn’t look like they are overcharging, most customers don’t understand the expense that goes into running a brick and mortar retailer. Retailers need to stop supporting manufacturers that don’t address the problem if they ever want to see a meaningful change.

  6. The best way to fight Amazon, Ebay and others (in my opinion) and it’s working great for me, is to offer “Free Installation” with anything you buy from my store(Parts and custom is Extra). I am selling the products at the prices I want, making more money on kits and accessories, and most of all my customer looooooove to hear the Free Installation. Can Amazon, Ebay or others offer Free installation? That’s how you convince your customers and make a deal. Since I put a big banner Saying ” Free Installation with Purchase” and bellow it “Parts Extra”, my sales went up more than 45% and this is the beginning.
    Free Installation
    Lifetime warranty on our installation (As long as no tampering”
    Convenience
    Free charge to check and tune our installation in the future (Compared to $50.00 minimum charge if the customer bring his own stuff”

    All these things make the customer think twice before buying online. 90% of the customers who leave the store after I educate them with these facts come back the net day or call me and set up an installation date.
    It’s all about convenience and a piece of mind for us and our customers.
    Guys , it’s working great for me and best wishes to all of you.

    1. When you say… “I am selling the products at the prices I want, making more money on kits and accessories, and most of all my customer looooooove to hear the Free Installation”
      Are you saying you price the product in your store over map, or for as much as you can and then offer FREE install? If so, what do you do when you are being shopped and they have seen the same product on line, or even locally at another audio shop, for less money? How do you handle that?

  7. Also, i agree to raise your labor and accessory rate but I can assure you that customers will start to buy “over the counter” and go to competition to install for 1/2 of what we normally would charge. We already receive several calls from customers shopping for labor rates and I would safely say we are the highest labor rate in town. We charge more because we hold our staff and installations to a higher standard than most. Raising labor and lowering product pricing would be suicide…agree?

  8. The thing about internet is that its taking from our pocket for sales. We wont install it or support internet car audio. we dont know where it came from originally or of its a defect or refurb. then we are responsible. we would hace them sign off but hell no. Manufactures need to support brick and mortar stores.

    Never support the internet, not us…

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