Making Chicken Soup from Chicken Feathers !!!
Submitted by Bermuda Bob on Tue, 11/08/2011 - 1:27am.
As I reported in the article written by "tageono" last month on Whirlpool, their CEO reported that:
" People who are buying are people whose appliances break."
So, in these worsening Recessionary times, what does the true Entrepreneur do ??? Well, if he listens to those coming thru the door, he does his best to service their needs, and even reap the benefits of some word-of-mouth "advertising" ...
Recently, the Press of Atlantic City, NJ reported on a business opened up to do just that !!! Here's a link to the article:
http://www.pressofatlanticcity.com/business/just-opened-low-prices-the-goal-at-appliance-outlet/article_3b6d08c0-0759-11e1-9602-001cc4c03286.html
Who sez you can't make chicken soup with just chicken feathers ??? All you need is to reinvent the recipe !!!
Kudos to these folks for listening and Good Luck !!!
Contrary ...
... to those here who know little or nothing from whence they speak, I can report the following after a conversation with the gentleman highlighted in the article:
1. This was a well-thought-thru business plan to reach out to the same demographic as the Big Box stores who usually attract the initial attention of the urban community ... and those who were interested in simply replacing a product because it was beyond repair ...
2. This is part of a plan to reach out and expand to other urban communities with the intention of competing for those customers ... Customers who want to make a purchase and take it home in the "one fell swoop" !!!
... and, oh ... by the way, the owners are STILL members of management/ownership of the major Independent Dealer in that area ... right next door !!!
They do not see it as competing with themselves, they see it as being complimentary to their service to the community/demographic ... and it allows their store staff to focus their attention on different areas !!!
You see, they realized that there was a specific demographic, as outlined in the newspaper article, which they needed to reach out to ... and have now done so successfully !!!
There are some, I'm sure who might have the tumerity to think that such thinking is "... putting dealers in a coffin box" but I tend to believe that we ought to "... pin a medal ..." on these folks ... one that proclaims:
Chicken Soup from Chicken Feathers for sure !!!
This Guy Speaks...
the obvious. Perhaps he could run for President. This is what we are left with , CEO's making obvious statements about the landscape of the business ? I would suggest that from what I have seen friends and neighbors are replacing units as a remodel at the high end. However the high end has shrunk. So given his penchant for the obvious it is the shrunken middle class that is suffering. Long live the occupiers if they can organize their message. A revitalized middle class is the shot in the arm needed to warm up the economy through increased demand. At that point jobs would be created because of increased demand. That is what creates jobs , not Rick Perry or Herman Cain.Perry stole jobs from other states with no net gain in employment. Brian Finkelstein ? A visionary or flop ?
Wrong End of the Stick !!!
I think you might have gotten the wrong end of the stick here ...
This is not a political commentary, it was intended to be an uplifting story - when there are few these days - about someone who has thought outside the box ...
Another Attempt......
by a bottom feeder. What purpose does his effort serve Bob ? He should rename his business "Sanford & Son" At the end of the day it is economy driven commentary about the sad state of our middle class. I see no relevant contribution this guy is making except to sell units at low prices and hurt sales and margins for the good dealers. Do you see that ? You publish something like this on a website that has many dealers and distributors reading it and you think it is inspiring ?
Ridiculous Assertions !!!
Did you actually read the whole article ???
Did you notice that this outfit is NOT competing with the local Dealer ???
Did you notice that they are doing something the Dealer is not going to do ???
No Dealer would do business like this, but @ the very least, it's keeping customers out of the grips of the Big Box dolts ... and keeping customers looking towards Dealers before the Big Box boys ...
I think you are being purposely pejorative in an effort to to make something out of this that it is most certainly not !!!
You Can't...
possibly be serious . I give up.
Stallion...I gotta go with BB on this one
Stallion, your points about undercutting margins, well taken to heart by me, for I think everyone knows I have zero love for big box stores and how they plow margins into the ground while manufacturers ignore what is happening, all in the name of moving boxes and promoting shareholder value in false numbers. Sanford and Son? Perhaps we should apply that name to Whirlpool as well, for all that clearance product the dealer is selling, a customer can buy online through the Whirlpool and Maytag websites, and get it delivered right to their home. And what about when Whirlpool or GE offers their discount or closeouts to their independent channel? Does that make an independent dealer a bottom feeder for buying a new boxed product at a discount, then re-selling it to a customer looking for a value? If every dealer has the opportunity to buy that closeout (which any licensed dealer can do) and re-sell it at a discount, that is a bad thing? If the manufacturers are going to allow these big box stores to break map rules (recent whirlpool refrigerator at lowe's, plus GE laundry at Home Depot) and plow margins into nothing, are the independent dealers just to let the manufacturers keep putting us over a barrel?
Right You Are !!!
Where is it written that only the manufacturers can offer "closeouts" and alike ... especially when there is a local demographic there to be serviced ???
The opinion of one who speaks from your point of reference, "tagoneo" is certainly always spot on !!!
tagoneo.....
I would much rather see the dealers get these deals than some junk dealer.It is imperative that we protect dealers and have a better strategy than junk discounting to someone who could care less if he was in business for the long haul and hurts the business for everyone else. Yes the big guys should give the dealers the discounted products to sell.. With the businesses I am responsible for we spend time reviewing territories and pricing and we protect those people who sell our product. Perhaps that is why that division has record sales in a level or slightly depressed market. I don't take the small spike in business at the expense of our dealer family. I do what I say. The problem is these big guys making decisions in the appliance business are too far removed from the dealer. This guy is thinking out of the big box and putting dealers in a coffin box. I would not pin a medal on this guy and I wish you would have alternatives. It does seem however that those type of thinkers who respected dealers went away with some of those influential people who either passed away or retired from the business.What some of these people making decisions don't see is this , the big box buyers usually rotate every two or three years and you don't build a relationship with someone only interested in saving money and building a resume. That or selling excess or obsolete product at 10% over cost. Where does that get you ? My passion is for you dealers , I really don't care what Bob said.
No junk here
If you do your research before you open your mouth you will find that Art Handlers Appliance & T.V. carries Sub Wolf, Monogram, Electrolux, Whirlpool, Kitchen Aid, Dacor. I would not term him as a bottom feeder as you put it. There are many dealers that are surviving on closeouts and ding and dent, and by the way just an FYI the margins are great even after the discounts. But not being in the industry any longer you would not know that. Speak of what you know all else leave alone and save us your endless blather.
Hey Champ...
bottom feeders get it , got it , you are it. Keep selling what you want. I probably am responsible for more sales than a couple of the companies you mention above and I stand by my comments. The margins are not great , just pencil it out. Somewhere someone is losing and I bet it is a hard working dealer or are you just plain dense. Since when did lowering prices help the majority of the dealers ? The fact is reduced pricing of high level products is not good. Respect the industry. I suspect you are somewhat misguided on this particular issue.
Read the artical again
and you will see what I am talking about. Here again you are just talking of something you do not know. When a dealer buys an appliance with a 30 to 40% discount and turns the product that beats the big box and makes 38 to 42% GPM and takes another buyer from Lowes or Home Depot or Sears and you say that is bad???. Stud you don't know what it takes in the real world to survive against the big box, here again speak to what you know all the rest leave alone.
roadwarrior...
gremmie or wannabe , which are you. The "dude or stud" makes me believe you are a gremmie.I really doubt your numbers . They make no economic sense. What does that really do for the great high end dealers ???? Nothing.You must work for Joe's Retail Heavy Discount Dealer and we can finance you at 40%. Give me a break.
Catch a Clue
You don't get it , I mean really don't get it. This is Whirlpool and G.E. and Fridgidaire we are talking about. DO your research ... They are not touching the high end. What is your disconnect anyway. If you don't know what the industry is doing I would keep tour comments and your attitude to yourself. speak of that you know and leave the rest to those of us that are in touch with the industry and not a has been looking at the good ol days.
roadwarrior....
I currently survive outside of the high end but simply put the same rules should apply for dealers of any products. You think lower end dealers should be shit on ? You spend too much time attempting to be a tough guy and you are the one missing the point. Let me begin with " See the dog run" Would that be easier ? Come on now. I sit here supporting ALL dealers and you call me names ? Take a deep breath.
Names?
I am looking at the post and I am hard pressed to find that I called you anything. Here again you are posting just to post an assault.
assault
Road Warrior...you are not missing anything. It is another typical deflect with hostility and aggression to mask lack of knowledge. Quite sad actually. Again, more of the same sad story. More of why I made my post about being tired of the attacks between AS and BB. And I think we have now seen where the source of the agitation is.
So True
You are correct T, AS seems to be bitter and out of touch with the street and the real world of retail in this industry. Maybe he, like others I have known through the years has spent too much time in the ivory towers looking at reports and numbers to get what is really going on.
Correction.....
I am not and have never been considered an Ivory Tower guy but thanks for the compliment.I have turned around more than several businesses in different industries and that takes hard work my friend with some brains and recognizing good people which I see you perhaps need some help with.My record speaks for itself.I also learned from failure and that made me a better manager and I relate very well to all the people that I am responsible for.Nevertheless "you don't know what you don't know". Happy Thanksgiving.
Thanks ...
... for acknowledging that, "tagoneo" !!!
For the Record...
How about has been..... I don't care but see what I am ? You have no idea how to define a conversation. You are in over your head maybe ? Now...don' take that so seriously .I accept your apology.
name calling
AS, If we want to talk about people name calling, perhaps you should gaze upon a mirror and talk about what you see there.
Tagoneo...
I don't care what he calls me I just find it fascinating that you would not concentrate on the point at hand . That would be the discussion about dealer margin protection. But then again I am not sure either of you have P&L responsibility so perhaps that is something I should consider in the discussion. Given the dealer base is shrinking as are margins perhaps your efforts should focus on that end of the business. The saying or song is " gaze upon a star" Sung by Jimminy Cricket.
Focus
Focus on which end of the business? Margins? Have you not heard anything that many of us have said? This closeout dealer is focusing in on a margin-rich segment of the business. How many times do we have to say it before you understand? Let me say it again: READ THE ARTICLE, LISTEN TO WHAT WE ARE SAYING, THIS DEALER IS NOT IN DIRECT COMPETITION WITH HANDLER, HE IS SELLING STRICTLY CLOSEOUTS, HE IS FOCUSING ON CASH-AND-CARRY BUSINESS. Is that clear enough for you, or do we need Big Bird and Animal to explain it to you? Again, closeout sales are margin rich. Scratch and Dent sales are margin rich, when you buy truckload of s&d from the manufacturer. The manufacturer sells closeout direct to public (see my previous posts about Whirlpool doing it) in order to regain their cash flow on product just sitting in a warehouse. The manufacturer overbuilt, or they came with a new model, whatever reason. Someone is going to sell it. I focus my end of the business on ALL aspects of the business. I sell high end. I sell mass premium. I sell commodity product. I sell closeout. I sell s&d. I sell parts. I sell service. I guess I am the worst bottom-feeder by your definitions, for I focus on being able to gain sales from every type of customer, while selling with good margins.
Might Work
Even on who's not in theindustry would understand that explenation, well done T
Margins
I firmly believe that you no longer understand the appliance business, certainly not this segment. This is not about the high end, although it could apply here as well (we should all be thankful that you haven't brought up your 'glory days' at Dacor). This is about a dealer trying to get feet in the door and convince those consumers to buy product in their store. They are able to buy closeouts in quantity at huge discounts. They could do the same with scratch and dent at up to 60% off. They would be able to make a higher margin on these two categories than on new product. Margins are enhanced, cash flow is moving in the right direction, and they are getting traffic in the door. They are serving a specific market for the customer looking for a bargain. The dealer is able to find a way to survive in this market. We would all benefit if you stayed out of topics in which you are not well informed.
No Wonder ...
most of you folks are failing.I am truly sorry that you all can't see past your anger. I think some of you have truly lost it. People in the industry have told me that and now I see it. So do what you like , don't change and hope for the best.I have finally had enough of the stupidity that some of you evoke here.Clearly some of you don't know what you are doing anymore and your actions and words show it.See you on the back end. Good luck.
high level products?
Stallion, you confuse me again. Reduced pricing on high level products? From what I saw, this dealer is buying commodity product, not high level. He is buying Whirlpool, KitchenAid, GE, Frigidaire, and other product. Or so says the article. If those products are considered by you to be high level products, then your understanding of our business is anything but an understanding. If you are classifying mass premium product such as Electrolux, Kitchenaid, LG, Samsung, and Jenn-Air as a "high level product", they are far from high level. Just a higher priced commodity product. Regarding margins not being great. Your views always seem to be slanted toward the manufacturer. From that viewpoint, you are correct...margins on closeouts would suck for a manufacturer. What causes a closeout? Change in design? Poorly built product that no one wanted to buy? And what causes the overabundance of in-stock product? Poor forecasting? A bad economy? Or more likely a combination of all of the above. All this dealer is doing is focusing his business on a particular segment of the industry that is available to all real dealers, and he is trying to make a living. I see half of your argument, but I find you defending your position without factual support.
tagoneo... Part 2 Second Request and So On....
I will be out of touch until Friday however I wonder how you and the spin master may attempt to twist my honest and clear explanation on how I stand firm to protect dealer profits. These are facts and a good plan liked by all of our involved customers. I am anxious to see what you say considering that my opinion may have surprised you. Have a great day.Now make sure you don't ...ready ...fire and then aim like BB has a tendency to do when he salivates over my responses.I wish you well if you are one of those hard working never say die dealers.
Assumptions and reply
AS, my assumption stated that your words always seem in favor of the manufacturer. Your statement about me assuming you are on the side of the dealer...honestly I can not make that assumption, based on your prior posts. I hope you prove me wrong. As you said, you believe your words surprised me, and they do, for in a majority of your previous posts, you have spoken the opposite, at least in my opinion. Which is fine...everyone has their viewpoint, and a good debate involves people presenting their position, then the other side acknowledging the opposition, then countering with their own position, but both sides should be respectful of the other. Respectful not going hand in hand with agreeing of course. Speaking of that, I want to make a personal statement. I think you and BB both need to chill out. I am tired of you two attacking one another. It honestly is not fun to come to this site and see both of you hacking away at each other over sometimes valid points, other times it seems like the littlest thing sets both of you off. I stayed away from this site for 3-4 months because I got sick of the digital diarrhea being put forth from both sides. What the hell good does it do to get personal? There is a skill to debate, which both of you seem to lose when talking to one another. Neither of you are innocent in this. How about some skilled debate language from both sides, declare a cease fire on hostilities, and let's all do what we really want to do on this site...talk and discuss our industry. There is never a reason to make it personal. And before it is said, I will say it. Yes, this is a public open forum, and people have as much right to free speech on here that Advisor allows...this is his house. Yes, I can easily just stop coming here...so can many others, as I believe some have just walked away quietly. And I did walk away, just as you did AS, but you returned. Your points do have merit, but then you and BB started up with the same bullshit again. Does it get us anywhere? Professional debate gentlemen...not personal attacks. After all...no one here is running for political office and should not stoop to such low levels. Let's get back to talking about the business and keeping the language professional. Unless the objective is to disrespect Advisor's house and chase his guests out of here.
I Agree ...
... with your sentiments, "tagoneo" and would like to use this opportunity to request, once again, an addressing of the Rules of Decorum, especially when it comes to personal attacts, depictions, suggestions, and alike ...
Decorum
I've been avoiding this last round of postings, but I will chime in...
I read this site to keep track of happenings in the industry from which I retired after 40 years. I occasionally chime in, usually to add historical perspective to issues discussed. I enjoy reading other perspectives and since I know Stallion, I appreciate the insight that he can bring on various issues.
BUT, like Tageneo and BB, I don't really enjoy reading the back-and-forth banter and personal attacks that have nothing to do with our industry. Occasionally, I've become so bored with the babble that I've quit reading the postings and just look for News Items.
Can't we just present our thoughts on issues affecting our industry and leave out the personal comments? From now on, if someone attacks me personally, I will simply ignore the posting regardless of how badly I feel the need to defend myself. If we all do this, I think the attacks will eventually stop.
Tagoneo
I guess my bias towards dealer margins does not come across strongly enough. Manufacturers should design , cost and sell product at a margin they want to live with. The plan should also include making certain dealers sell product at the highest of margins for the dealer. As a " proby" I learned that from Tony Joseph who lived it. I have engrained in my heart the positive merits of dealer margin protection. As the manufacturer we need to keep our houses in order and not short change the dealer. That has always been my philosophy for many years now.That will continue as such.I can't make it any clearer I guess. The dealers I deal with now would support my position as accurate even if it is in another market,
tagoneo
I was speaking of the Dacor and Sub Zero product lines. In terms of margins I am only speaking about dealer margins. The key to success of any manufacturer is to ensure that the dealer is making money on the products they carry. I suspect you mischaracterize me as being a production guy however the customer and in this case the dealer profitability is all important to me. Generally those discounted products are damaged , have hidden damage or are excess inventory from lack of demand. As I stated yesterday we have built into some of our products a formula for returns on inventory that we can restock and resell as new concerning the non damaged stock. This does two things in the long run. #1. No discounted sales which assists all of our dealers and territories , #2. Allows us to sell the product at our margins.The estimated returns we get back have been part of our budget plan each year. We even have a history of returned damaged product as a percentage and that is scrapped. So if you made the assumption that for the long term I want to protect dealer margin that would be accurate.
Amen !!!
Thank you "warrior" !!! Well said, indeed !!!
It "gets you" ...
... and the demographic sales, but then you'd have to be in it to understand it, wouldn't you ???
Hey Bob....
I live it every day with some of the same dealers. You just don't get it do you ?
"Getting it ..."
What I "get" is understanding what you don't !!!
Bermuda Bob
I suspect your role in any organization would be limited to the level of corresponding knowledge you have or lack. The entire issue is price protection for dealers. I don't like or adhere to this Fred Sanford style of selling appliances. Do you understand that ? You can write your misguided insults buit it does not change my feelings on the matter. I would not allow it and in fact we have this type of situation built into our business model to protect our dealers. What do you do besides complain about me ?
As Usual ...
... I strongly presume you have not read everything on this, and that you simply wish to snipe at anything which challenges what you formerly were involved in/with ...
So, you'd prefer to leave a demographic unserviced, and just give them up to Big Box stores .. all because you don't want see those people loading their pick-ups behind your store ???
I guess you'd rather sit on inventory ... watch your Sales Force sit around on their hands ... see customers come into your store and leave empty-handed !!!
WOW, that's some sort of smart marketing strategy !!!
You Have ....
no idea what you are talking about. In all of my years in business I have never run across anyone like you Bob.
Then ...
... you have surrounded yourself with only
"Yes, men/women" !!!
bahta, bahta, bahta......
........that's all folks!!!
Advisor...
I would suggest that the strategy undertaken has consumers buying product BELOW , ah say BELOW dealer price. Every sale takes a sale away from our fine dealers. And that's all folks. You all know what I am saying save for one.
Thank you !!!
What does Pakistan have to do with it ???
Just kidding, couldn't resist !!!
Thank you, Sir !!!
Right On!
It is good to hear someone with great knowlege expess it. I salute you Stallion!!!!!