|Posted on October 21, 2010 at 3:44 PM|
Ugh! A client came into our store today and wants to order six TVs. Now, normally you would think that this would be a great thing. “Yay! I sold six TVs! Beers all around!” But no. It isn’t. It’s actually kind of a lame thing.
You see, after calling Sony and Sharp and then eating a lunch of Doritos and sadness, I have deduced that these large manufacturers actually DON’T want to sell a small store like mine TVs. And I can understand why many dealers are now just saying, "Hey, you want a TV? Great. Go down to Best Buy, pick it up and I'll install it for you. Thanks!" Sure, these manufacturers WILL sell me the TVs if I send in a fax PO on company letterhead (Sharp) or enter it into TechData (Sony). They will gladly ACCEPT the order, but they make it SO difficult to keep up with TV pricing and promotions that they try and make it all but impossible to figure out if selling a TV is actually in my best interest.
Here is an example of a TV that is NOT in my interest. Note that the MAP (Minimum Advertised Price) is actually LESS than my cost. How many can I put you down for?
The modern day TV game is little about selling the TV itself but all about scoring rebates and back-end trailing credits. The TV sells for X, but I give you an instant discount of Y and then at some point in the future the TV manufacturer credits my account with Z. Except, you would need to have a full-time staffer tasked to doing nothing else but monitoring these rebates and programs and crazy back door deals and then filing and submitting for the credits and then following-up on whether or not you receive the credits. TV manufacturers: If I wanted to be detail with this kind of crazy, follow-the-money-trail-down-the-rabbit-hole business model, my store wouldn't be Custom Theater and Audio. It would be Honda.
The TV companies expect you (well, I’m playing with pronouns here; they actually expect “YOU” the TV selling public, so the “you” here is really me. Confusing I know. I’m just trying to get you into the mind set of dealing with this whole knotted ball of tape.) to instantly give the customer their credit, or free Blu-ray player or – often – both. So let’s say the TV is $1000. And it has a $150 rebate. And comes with a free Blu-ray player. I sell the TV for $850 (which is usually right at my cost), and then file for my “trailing credit.” Usually the credit is 60% of the value of the offer, so I get a credit for $90 on the $150 and maybe another $90 on the Blu-ray. But I might have to wait 6 months or longer for this. And hope that I don’t forget.
I get about 3-4 e-mails from Sony every week along with a couple from Sharp and multiple from DBL detailing all the latest pricing and promotions and programs. These e-mails have DOZENS of codes and time-sensitive offers on them with “if you sell this TV with THAT Blu-ray you get this, but if you sell this TV with THAT receiver you get this...”
TV pricing is as volatile and risky as commodity trading. My normal routine before quoting a price is logging on to Best Buy’s Website to see what THEY are selling the TV for and then checking to see what my COST for the TV is and then checking to see what kind of crazy promo is going on. Today when I was trying to spec in a 60-inch TV for my customer I saw that my Sharp pricing was like 2 months old which means it might as well have been written on papyrus. So I call my rep and he’s going over the pricing and trying to figure it out and help me out on the math as to how a $150 instant promo is really adding up to a $399 promo to the customer and I finally just say, “You know. You guys make is SO hard for me to sell a TV.” And he told me I was the fifth dealer to say that very thing this week.
Then I call Sony to try and confirm a promo that they had e-mailed out and the rep says that the promo is on hold, even though the warehouse shows 924 models in stock that the computer is saying it is discontinued and that all sales of the set have been put on hold. “So what do I do? I need a TV for my customer.”
“Well, sell them a 55-inch.”
“But they want a 60.”
“Well, spec this one in and just wait and see what happens.”
So, one TV down, 5 more to go. Frickin’ TVs...