Yes indeed. MANY of the thing I sell have gone UP in cost. There again, that's one of the reasons I still sell central vacuum systems and security systems. Higher costs relates to higher margins for my company.


Costco & Sams is an agravation, But some customers really do understand when it's explained that they would be buying older technologies from those places.


Tell us what you REALLY think Mike....

I can just visualize Mike beating the hell out of his factory rep, while screaming WTF you mean, the line is going into BB, you snake.........lol

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Yeah, got to agree with you on that one. I see it all the time..

As far as Abus, I have a pre-wire deal set with the one (1) builder client I have kept after all these years. I pre-wire in such a manner that I can install most anything (NOT Bose) from Abus, to the CAV. And then the customer can select from a varying degree of options.

10K SF? Not usually anything quite so big around here....



ROFLMAO....

Is that sort of like "better to be p*ssed off, than p*ssed on"?

guess what

[Link: search.ebay.com]

Grrrraaaattttee!

I'm not actually ready to give it up quite yet!
I do love this industry and I would be a shell of a man if I quit.

On the other hand:
Has anyone ever had a 'driveway' malfunction at 5pm on a Saturday and it was imperative that it was 'working' because the client was having all of his friends over just to experience the 'driveway'?

Hmmmm.

I just poured a 600sqft patio, complete with ceramic tile at my house and my back's still killing me!

I think I'll stick to my 'day job'!!! ;-)

This message was edited by pilgram on 06/24/05 00:53 ET.

Going back to the original subject of this thread...."Is there a future for smaller shops?"

My answer to that is that, yes there's a future for really small shops but probably not for medium sized shops. I almost cringe when I read stories about little companies expanding and opening brand new mega showrooms. The overhead jumps out of the magazines and kicks me right in the wallet.

Who among us is able to compete head to head the marketing of Best Buy or with the prices that the internet shippers have to offer?

Who among us hasn't had a call in the last month to run a speaker wire or fish a cable jack to the new HD television that was just purchased from Megalowmart?

Who among us hasn't gotten the feeling when talking to a potential customer that they're aware that they're going to have to pay a bit more for their components if they buy from you?

Margins keep dropping yet the cost of being in business keeps increasing. For the most part, the big boys and the very, very small guys continue to increase business, but dwindling are the days of owning the profitable hi-fi specialty store aka the medium sized guys.

At the present, one can still make money on labor, speakers, wire and control systems. I suspect that labor profits will still continue well into the next decade, but since speakers are rapidly being commoditized, wire is being sold for low margins at home improvement chains and (with apologies to all of you Cres/AMX gurus, it's just a matter of time before manufacturers get their acts together and design components that are truly plug & play.

I can't speak for the rest of you, but the majority of my better customers are the aged (who can't comprehend technology) and the incredibly wealthy (who's rather pay someone else to comprehend technology for them.

Anyone remember selling to the middle class 25-40 year old demographic? In the marketing world, that's a BIG demographic that spends a hell of a lot of money. Just turn on the television and actually pay attention to all of millions of dollars that are being invested into advertising and look who they're targeting.

Want a glimps at the future? It's lying face down in a pile of insulation in an attic.

Funny comment.

But maybe it's not that bad.

Who will fill the void left by all the wrong-sized specialty retailers? Internet sellers can't install. Plug n Play works for developed technologies (sometimes), but new technology platforms will continue to emerge (how many ways are there to "plug n play" a TV?).

In the late 60's/early 70's, there were a bunch of small hifi shops selling new-fangled solid-state electronics that they bought thru distributors. Some of these small independents evolved into companies like Best Buy (yes, once upon a time a promoting specialist Advent dealer), Tweeter, and Magnolia. And along the way, numerous bigger, better-funded operations failed (Playback, Pacific Stereo, Highland Superstores).

Retail shops big & small are having a hard time evolving into custom shops, though they surely want to. I suspect that, through solid business practices, effort, and a bit of luck, more than a few of you will evolve into filling that middle ground between "digital plumber" and "superstore".

I have always said, all you need to do is, "Do it neater, cleaner and better than the next guy." We are in the SERVICE SECTOR. Provide quality service. Best Buy and Tweeter are in the retial sector. They aren't our competitors. They can't survive in the service sector no matter how bad they want to. Customers like seeing the same face when there is a problem. They like dealing with the owner on the phone or in person. Hardware sales just go along with our service. Sometimes we have to compete on price but not always. The price shopper might not really be your customer. We do, however, need to be at least competitive on certain items. Read this as video. If you get to make $500 on the plasma but get retail on the speakers, electronics, and full freight on the labor then its not a loss. customers want a fair deal not the best deal. The best deal shopper isn't in your target market.

Look at your repeat customers. Do they come back because you were cheap? Because you lost money on their job? Nope. They come back because you provided excellent service or provided their friend with exception service. Build your reputation one client at a time. You'll find most small custom shops rely almost exclusively on referrels. This model provides the best leads and most likely to pay.

I don't agree with this 100%. Yes they are in the retail sector, but they are making attempts to be in the service sector as well. Can't survive? Maybe so. But they'll send a small fortune trying, and disrupt the market while doing so..




You're right on the money with this. I quite often BEAT the big boxes on the price of video, while making great margins on all other items, as well as labor.


That;s the whole deal in my little mind....Repeat business.....And not simply because I sell DVD's for cheap.....lol

Crestron @ ebay... Not only will you find the product listed at ebay but every once in a while you will see programmers offering services for the winning bidder.

Dont hide it, we all know it's Alan whoring out his services.

(Sorry Alan, just a joke. With our previous discussions on price protection/restricted lines, I couldnt resist:) )

Man there's quite a few demoralised or just plain p!$$#d off people out there!

We techie types just love to moan and bitch about how bad our lives are, unless of course they're not that bad at all, then we moan about how bad they might be at some point in the near future. LOL

I think many people, not just on this thread but on others too, are missing a great part of our industry, especially those lucky enough to work for themselves. WE CREATE OUR BUSINESS. If you think your business is in jeopardy because your competition is taking over, or your products are no longer viable, or your underwear smells - change it! Change it all!!

Evolution or extinction is within our control. I believe now more than ever we can do much more with our business plans. Back in the day when TV was four channels or whatever other good ol' glory day memory you have, your other options if that dried up were limited. But we, as part of our job, perform research which allows us to be on the cutting edge, which of course can be a dangerous place to hang out but also can be very interesting. We can move faster and more efficiently to respond to the times than the BB/Mag corps.

And our options just keep growing...

Virtual reality rooms, (well OK a fancy game room then), are becoming much more of a sought after item and what are they? Some rear projection setups and a sound system along the lines of home theater? So with a bit of a learning curve we have a new product on our hands. Sure it's not going to replace our A/V market but this is merely one example.

What about outdoor home theaters for those of us lucky enough to live in such climates? Or underwater projection systems for swimming pools? These are a few examples of items that we are considering getting into because of market trends.

I also guarantee that every single one of us in the forum has thought of their own widget or gadget that would make millions if we got around to patenting it.

CARPE DIEM!!!!!

One other thing, if you are not able to sustain your business as a CI on labor charges alone with complete disregard for margin on products you REALLY need to take another look at your business plan.

JMHO

I asked for no trite advice.
But when one aimlessly attempts to seize the day one misses details.
I have just proved I am turning into an old man.

Nonetheless I did not start the thread to read we are a service industry, I know this, nor be better than anyone...etc...
That in my opinion is not the whole equation. Yes, it is important to be the best to your customer, but how about those that you are a customer to?
For those interested in living off labor only until retirement can stop reading now. Nothing wrong if that works for you, I am looking for a different prognosis for a different business model. Owner and 2-10 well paid employees. Margin from equipment is essential to making this work. To whom we are customers, the manufactuers, are they predisposed to eliminating us (small, custom shops) from the process.
I feel there is emperical evidence...crashing margins, convergence etc that would force any to look to the future and validate the above.
And if our industry is going to evolve into primarily a labor model, you can count me out of those limited earnings.

Manufactuers people...if we have nothing to sell we have nothing to gain. That is were I was looking for insight.

And what insight....to see if it will be worth it. Alot of us have already compromised earnings, free time, financial security and family time to establish a productive business in this industry, but are we valued,....and is there a reasonable future for such?

You can wait until after this years CEDIA to get back at me.

You are at the same crossroads I am rmht. I have a brother in law who works three days a week... ships frozen seafood... makes $250,000.00 a year... plays a lot of golf... most importantly, he's at every one of his daughters baseball games, soccer games, dance recitals, etc. etc. I get to see my kids in the morning only and lately it just seems that I have to put in more and more hours to bring the same pay in.

Before anyone chibes me for having a bad business plan... read above... I'm fully aware that I must change this pattern and thats my crossroads... how much effort do I put in here or do I do something more boring for work that pays me REALLY well and affords me a lot of time with my kids (6 and 4) who are growing up without me?

Aimless? I thought I went into specifics.
And if you consider evolving trite advice then you are judge, jury and executioner. You've made up your mind and don't want it to be changed by sound fundamentals that are, whether you like it or not, the core of our business.

I agree wholeheartedly, but being CAPABLE of surviving regardless of margin is a necessity.


You cannot expect all manufacturers to market to you when you yourself are not willing to accept compromised margins because of reduced income. What are the manufacturers supposed to be telling their stockholders or families, "Sorry we didn't hit X target this year but we're really trying to keep our CI's happy."


This is where you look to your future products, what's coming around the corner - evolution.


We create our value by the products and services we sell.


Sorry just couldn't resist...

Don't mean to sound confontational but we have the ability to be what we want to be. You mentioned buying and selling homes which I think is a great way to incorporate your skills - but it's just evolution.

Okay, I'll go with you on this "predisposed to eliminating us" theory.

Indeed you are correct. The manifacturers, just like DirecTV, are predisposed to eliminate those accounts which are not cost effective accounts. That's the basics of it.

Turning BIG numbers is the name of the game. No two ways around it. And sadly, most small CI shops will never turn numbers big enough to excite anyone...


Sorry, but that's just the way of business. Wally World demostrates this to the max.

A couple years back I had the opportunity to actually be "inside" of one of the Wally World "trade shows". It's truly amazing what the manufacturers will do to garner tht level of business. But then again, old Wally World will order more than just a single shipping container of items at one time.

Another example? I was in discussions with a Chinese company with regards to importing some custom labeled speakers. Man, you simply would not believe the numbers that you can get if you are talking about placing a 100k order....

Simply put, it's ALL about money....