Beginning in the 1970s, independent appliance dealers have enjoyed a great run. As family-owned businesses, they are often cornerstones in their communities. Everyone recognizes their name, and there is a lot of pride in having the second or even third generation behind the counter. But along with the family name out front, many of the ways they do business in the last decades have remained unchanged.
When your parents or grandparents decided to get into the appliance business, they stepped into an industry environment that made it relatively easy to grow. Gross profit margins for appliance stores floated above 30%, and the competition was limited and friendly. Ad funds were generous across multiple brands, and VRs were consistent and reasonable to hit.
Fast forward a few decades – and a generation or two – and the landscape has drastically changed. Today in the premium and luxury appliance industry, gross profit margins average 23%, the competition is everywhere (and aggressive). Ad funds are limited to a few brands, and VRs are limited, complex, and smaller.
But despite the changes, today’s owners are often working from the same playbook previous generations did. They’re trying to run the business the same way it was run in the 1980s and 1990s and wondering why the margins are tighter and growth is unpredictable (if it even happens at all).
For years, independent dealers who ran a friendly, local business were able to achieve success. But as profit margins shrank and competition increased, being the hometown appliance store with loyal customers was no longer enough. Today’s independent appliance dealers have to think and act like a big business. That doesn’t mean losing sight of the things that make a business special, but it does mean making intentional decisions that lead to growth.
It may also mean that you need some help. You know how to answer all the questions that will help a homeowner choose the best 48″ dual fuel range for a new kitchen. But figuring out the ins and outs of advertising online is overwhelming. And you don’t have time to create and send email marketing that connects with potential clients. But that’s ok. There are people (like us) who do.
Our goal is the same as yours: We want your business to grow so that someday the next generation can step into a profitable and healthy business. Contact us today, and let’s talk about a growth strategy to make sure your business is here for the next generation.