I was wondering how must custom installers go about getting their products. Do you prefer distribution or belonging to a buying group?
We have been in business for over 20 years and I am looking to expand but am unsure if it is worth belonging to a buying group...
And if you are not in a buying group and are not a dealer for say "Sony" how does one go about getting that product? We have been doing business with stores around here that sell us Sony. But I hate going through the middleman as I am taxed and I can not advertise that I am an authorized dealer for this company or any other in the same sort...
Also, how do you guys go about advertising? Do you feel the best way is a local newspaper? I was considering producing a press packet and mailing them to a bunch of interior designers to get our name out more... Feel this is a good or bad idea?

Thanks again for all the help,
Lonny

Joining a buying group seems to have benefits...I haven't found one that offers any worthwile product lines. If you are expanding you might want to consider choosing specific products that you like to work with and develop packages for customers...this allows you to possibly go direct as your volume increases with that particular manufacturer. It also saves on engineering time and remote programming.

Most manufacturers today have programs for custom instalers... go direct.....

There are really ny 2 Buying groups that are truley worth a hill of beans, abd both are very selective.... HTSA is awesome. and ProGroup is the other....

As far as advertising goes... Word of mouth is King in out industry. Dont bother with Print advertising unless your committed to it. Same size add, same location int he paper consistantly for 3-4 Weeks is an adverage amount of time before you will see ANYTHING come of it.

Direct Mail to Existing customer list is always effective.... Designers and Architects are spotty at best.

Apporch local small builders and architecht first. Usually those guys are more receptive to what we do.

Thanks for you input in this thread….

I am also considering going direct but do not have the money to cover the expense of buying direct. The only reason why i was considering a buying group really is for Sony. I can get everything else through distribution channels.

I am now in the process of making a press packet, which I am going to distribute to the local interior designers, architects and contractors.

I am also going to stay away from the newspaper as it can get expensive and I would rather put that money elsewhere…

Thank you again for your advice,
Lonny

Unfortunately, Sony is one of the few manufacturers who just doesn't get it when it comes to the custom business.

I was reading a magazine article in the doctor's office the other day about how their 2003 sales slumped 10%. You'd think that they'd be able to make that up if they would bother giving the little guys the time of day.

Guess who's close behind Sony? Samsung. A great alternative for style and performance and easier to get. Don't have quite the name recognition, but darn close. Samsung has been rising over the last 2 years. No, I have no affiliation with Samsung, but they were more receptive than Sony, so I support them.

It's funny that you should mention Samsung because the magazine that I was reading "Business 2.0" specifically mentioned Samsung as one of the manufacturers who has been cutting into Sony's piece of the market share pie.

Don't get me wrong, Sony makes a fine product. I blame the Sony's US powers that be for failing to recognize and properly act to the fastest growing segment in the industry....custom integration.

I was out of town the other day on a job when the customer suddenly mentioned that they needed a VCR for the bedroom. Being 60 miles away from my inventory, I popped into the local Target and bought them a Sony VCR. There's no doubt in my mind that the clerk who assisted me couldn't have been able to tell me the difference between 2-head/4-head, Hi-Fi/Mono etc. Yet, these are the types of people that Sony chooses to represent their products.

They deserve to lose business.

I have to agree with you that Samsung is becoming a very well recognized brand, BUT Sony sells its self. Sony has not only the video capabilities but also the audio end of it. You are right it is a shame Sony does not get involved in the custom market, it only discourages companies like mine from selling it, but we still have to. In recent weeks we have been selling more Samsung especially those DLP's they have, that’s if you can get them... The only real problem with Samsung is people who are uneducated in this field (the consumer) don’t think of Samsung as a named brand…

q

if you have been in the business for 20 years then you should have never asked that question. going through a middle man (buying group) costs you profits. If you are a distributer of a product then you get products at cost. Being a distributer is like applying for a personal credit card, you need some personal credit background and also your company background.within the first 3 years trying to start a new business, you try to get dealer backing and make profits on parts by being a dealer. then you expand on product lines. These are the basics of the custom installation business. if you haven't learned that by now after 20 years, then get out of the business

Huh????? Sound like someone else neds a little education.

Buying Groups and Distributors are 2 completely separate things. What you describe is a Distributor. and I agree somewhat on your comments. You certainly end up paying a little bit more, but not significantly more. Distributors buy in bulk... so they pay LESS that what a normal dealer would usually, and yes they need to make their profit, but charing dramaticlly more than dealer cost would not be good for business.

Buyng groups on the other had do nothing but HELP a shop. Visit HTSA.Com

A Buying group is a group of retailers that support like manufacturers. Their combined sales go to the bottom line of those participating manufacturers.

BUMP....

impaqt...completely agree with the first sentence of your last reply...

I wonder what it feels like to give a 20 year veteran a lecture, and not even know what you're lecturing about!

anyway, I bumped this cause I want to see if there is anything more anyone would like to add, or what decision Lonny made, and why? What are the results?

avdude

Hey sorry I have not replied I have been kind of busy these past few weeks... Anyway while I thank most of you for your input others I will not...
But the reason why my father has not become a "dealer" for certain brands are because 1. The initial investment 2. We do not have a show room so we are limited and 3. You have to keep a certain volume going with each company and honestly we are not big enough to do that.
My father feels "let well enough, stay well." Why this is true in some cases, i feel it is not in our case. I am making the move to buy only from distribution and looking into buying groups now, but still do not feel our business is big enough to buy at that volume. I stay away from products i can not get through distribution unless the customer requests it ie: Sony
I am hoping in the near future to open a show room and eventually get into a buying group.
Thanks again,
Lonny

Ps. I do know what the difference is between direct, distribution and buying group. I was simply asking how others in the industry are going about this....

I have to input that Sony audio is probably par with AKAI or KOSS or whatever else you buy at Costco. Video wise I like Sony, although not as much as others. As far as the audio goes I would never use their products. Why bother when you can use Denon?

In regards to the buying group again...I believe those are intended for small to meduim retail stores not custom installers...bottom line, get some commercial space, call it a showroom, go direct with whoever you can and buy the rest through distribution channels...but I would advise having multiple distributors as not a one of them have everything a custom installer should need.

I would love to have retail premises (which you often need to buy direct) but capital is the stumbling block.
The difference between buying price and overheads makes my choice simple if I just want to carry on as I am now (which I do.)
If I wanted to expand then yeah retail premises, teams of installers etc it would be essential to buy direct but I would need substantial capital and would have to live with the added stress the extra hours the more demands on my family etc.
When you run your own show the consultants and advisors often miss out the part where it effects your life..It’s just a balance sheet of facts but they aren’t all the facts.
I always shop around but just like your end customers the end bottom lowest price isn’t always the best …there are always consequences.
To be honest I am not fully committed to the challenge of being the biggest AV installer in the North West UK (If I came into some money then I would invest and expand and hire good(expensive!) people to delegate the work to). I am happy to make a decent living for myself and my family doing a job I love with customers who appreciate my work (I don’t advertise all my jobs are recommendations)
Once I was very driven and thought if you didn’t buy direct didn’t grow significantly ever year you would go out of business very quickly.
I have found a balance that works for me buying from dealers/distributors/wholesalers.
I run a lean one man show who installs brands i know inside out with suppliers who will bend over backwards to help me ..they are not cheap but i sleep at night.
I except this may not work for all with different goals.

Ps I am writing a lot more nowadays as i have a comminuted fracture of my left distal radius (broke my wrist)


This message was edited by wolf359 on 02/16/04 08:07.