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Retail, Custom, both?
This thread has 5 replies. Displaying all posts.
Post 1 made on Monday December 30, 2002 at 22:11
Brent Southam
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Where I work now, we are basicly a retail store, that offers some custom installation to keep the customers happy.

Is that where most of you started, or are you mostly custom install, that started a retail outlet, or do you do one or the other?

How did you make the transitions?
Post 2 made on Tuesday December 31, 2002 at 09:41
vts1134
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February 2002
305
We are just the opposite. We do mostly custom work but have a retail store as well. Both sides of the business do very well, but it always seems that one gets in the was of the other. I think if you want to do both then you need to seperate them into two seperate entities, but still sharing resources. Although they get in the way of each other they can both help each other. "Pure Custom" scares alot of people away who aren't thinking that route but end up there after talking to one of our salesmen. "Pure Retail" kills your high end clientell (sp) who, as we all know, get off on exclusivity. It's a tough road doing both but we get along pretty well.
Post 3 made on Tuesday December 31, 2002 at 18:20
sndtowne
Long Time Member
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Been in the A/V business for 34 years. Started out mostly retail and about 15 years ago begin to transition towards mostly custom. Now, about 85% of our business is custom - with the rest walk in retail.

I like it this way. The slower floor traffic gives me more time to spend with the $20K to $50K customers. When I was mainly retail, I hated it when I was tied up demonstrating a $199 VCR and a couple walked in with house plans. Now, I have plenty of time and the custom jobs are much much larger. I have found that the more time I spend with a custom customer - the more money he will spend with me.

In addition, some years ago, I joined the local Home Builders Association and began to attend their meetings. Soon, I discovered the contractors that seem to get most of the really big jobs and approached them about doing their prewires for satellite, household music, intercoms, telephones, home theater, etc. Some were reluctant at first saying that their electricians did that work. But several of the home owners hired us to do their installations and we impressed the contractors with our work. After that, we got pretty much all of their recommendations to prospective home owners. In fact, one contractor tells his clients that if my company does not do the work, he does not guarantee the job will be done correctly. This is a powerful endorsement. After you do a few jobs (and do them well) you will begin to get referrals. And referrals are the life blood of the custom business.
Post 4 made on Wednesday January 1, 2003 at 10:36
Thon
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November 2001
726
Just my personal opinion, but I don't believe you can do both custom and retail without being kinda half assed at both unless you have it set up as two different companies with two sets of management. I prefer pure custom because you can charge for your time and there's nothing to keep you from selling a few pieces of equipment to the occasional diy'er.
How hard can this be?
Post 5 made on Wednesday January 1, 2003 at 21:17
Ernie Bornn-Gilman
Yes, That Ernie!
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30,104
Custom and retail really do have problems coexisting. I work with a company that was retail with an old guy (I mean that, and I'm 54) who mosied through basic two-channel installs.

The business has refocussed on custom, but still is open for retail as it comes in. With the shop being small and local mammoth chain competition high, we had the same problems as sndtowne in his second paragraph.

As Thon suggests, there is different management for the two halves; our luck is that we structure payment of the lead installers such that they are the management and are rewarded or eat air based on their quotes and their follow-through.

BUT -- installation requires its own people, and the retail end becomes subordinate, just ordering and supplying that end; then the time necessary to do retail can slow down the progress of the installation side.

Another issue we run into (we are in an affluent area with some people who do not want to part with the money they have committed to spending) has to do with pricing of components versus installation. I say "versus" because we run into bids from the competition with components at full boat but very low installation prices, or very inexpensive components and huge installation prices; we insulate ourselves from this when we can by quoting component prices, then pointing out the discounts, and quoting installation separately at a reasonable rate.

We get the best results that way, because the customer can see that we are not trying to lie and say we will give them something for nothing, they can actually compare what similar components will cost them elsewhere, and we establish trust by being up front about how everything is priced.
A good answer is easier with a clear question giving the make and model of everything.
"The biggest problem in communication is the illusion that it has taken place." -- G. “Bernie” Shaw
Post 6 made on Thursday January 2, 2003 at 14:53
sndtowne
Long Time Member
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Custom vs. Retail: As far as a "blended" custom/retail business working out, it has worked quite well for us. In my market there is not quite enough business to be totally custom or enough business (with competition and all) to be totally retail.

Also, in the last five weeks, we sold four 42" plasma televisions and four Sony 60" Grand Vega LCD sets to walk in customers. This is $48K worth of business we probably would have missed had we been custom only.

There are four of us that work here. Two in sales and two in programming and installation. We also have one former employee who does "contract installations" if we get into a bind with too many jobs hitting at once. This has been our model for about the last ten years and it has worked well for us.


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