An important but seldomly acknowledged part of my job is to be a good listener. It comes with the territory as part of being a value-adding business partner for my dealer network. I like to joke about how providing unpaid business consulting benefits both my clients and me: If they’re successful, then by extension, so am I.
The same is true of listening to my dealers talk about their problems. Sometimes they’re business-related, and sometimes they’re not. It should come as no surprise that it’s not unusual for them to be dealing with similar issues.
Take supply chains. Everybody by now is familiar with the story, and most of you are dealing with it in one way or another. If it makes any of you feel better, no matter how bad the supply situation is for you now, others have it worse.
I was talking with one of my dealers who’s in the car and truck-upfitter vertical. Right now, it’s remote starter season. It’s not a business that I’m personally in, but I have many friends who are. For those of you who don’t know, in cold climates like ours, fall sees a rush of customers looking to get remote starters installed in their vehicles. For that segment of the market, it’s a super-important selling season.
Anyway, when talking to my client, I learned there is a very short supply of starters due to the semiconductor shortage and bogged-down logistics. It’s bad, but how bad? According to my client, the starter category is looking like Game of Thrones: betrayal, severed alliances and feelings getting hurt left and right as people scramble to acquire inventory.
I’ve heard a lot of stories this year about categories whose logistics have devolved into what another client called “a total Gong Show.” But, the starter category has to be the most dramatic one yet.
All of this roundabout chat is an introduction to what I wanted to talk about: the overarching trend of CE dealers feeling the need to expand their horizons and look at adding product categories that were once outside their wheelhouse. There was already pressure from multiple angles to branch out and find new revenue sources, including COVID-19 and the jump consumers have taken to online shopping and services. Being faced with supply shortages of key product categories going into the holiday season is pretty much the icing on the cake at this point.
“Adding new products” sounds simple on the surface — too simple. Unfortunately, it’s not as easy as that. You can’t just make strategic decisions with a dartboard, picking things at random and hoping for the best. I mean, you can. It’s just not a good idea.
I’m especially mindful of this as I advise dealers on my roster about making appropriate additions to their brand offerings going into the holiday quarter. Trying something new is a roll of the dice, but you can take steps to mitigate some of the risks. I’ll expand on that in the next installment.