Should I Join a Buying Group?

5/17/2016 10:04:00 AM
I’d been in business 10 years before ever hearing about an industry buying group. Then one day in 2011, one of our competitors started talking about exclusive product lines they had access to and deeper discounts than we were getting. He was all too happy to share his secret with me: he’d recently joined a buying group.

Shortly after listening to my competitor’s bragging, we decided to join Home Entertainment Source (HES, now called ProSource). Their marketing materials touted attractive discounting, access to exclusive product lines, and collaborative opportunities with other integrators. The premise behind the group (and any buying group) is that the collective buying power of its dealer members is much more attractive to vendors, and the leverage created results in savings for dealers and increased sales for manufacturers that ideally benefits both groups. The volume incentive rebates and discounts were supposed to cover our dues (they did). In other words, we started immediately saving money and began getting quarterly rebate checks back from HES.
 
 
 
Images from ProSource Summit, Spring 2016 

Our experience within our group is like anything else; you get out what you put in. Many of the perks associated with being a part of a buying group require significant commitments of time and effort. For example, ProSource has programs with many manufacturers, but it’s generally up to the member to make sure you’re getting the right program with each vendor. A program may include discounts, better warranties, extended terms, lower free freight minimums, or instant qualification into premier programs within each manufacturer’s line card. Think of any buying group as a way to hit the fast forward button on the efforts you’ve made to negotiate better terms with your vendors.

Another commitment of time involves attending industry events (most buying groups have at least one large conference annually). These activities are well worth attending, and the ProSource Summit held each year features an exhibit floor reminiscent of a small CEDIA show. All manufacturers partners show up with their latest and greatest products (including demo rooms). It’s a great opportunity to get to know your vendors better and build rapport. We’ve been saved numerous times by these relationships as warranty and delivery challenges crop up in the field. Buying group events also offer tremendous collaborative opportunities, with focus and attention given to helping integrator dealers improve their bottom lines. Over the years we’ve participated in sessions running the gamut from measuring labor productivity to understanding how different personality types work together within our companies.

When we joined ProSource, we immediately felt the sense of being taken more seriously by our manufacturers and competitors. We also leverage our membership status when talking to our customers. It’s powerful to mention your association with a large industry group and goes a long way toward building trust with a potential customer. Many buying groups have special committees steering different parts of the industry (performance audio, custom integration, etc.). Membership on these committees gives you a voice to drive our industry’s direction and further adds to the way you’re perceived in the market by manufacturers, competitors, and customers.

ProSource met last week in California for a three-day conference focused on pairing together manufacturers and integrator dealers. The days featured collaborative sessions and marketing and manufacturer demos by companies like Paradigm, Definitive, and Klipsch. The evenings offered great networking opportunities with fantastic cocktail and dinner events. The event reminded me how much we’ve grown as a group over the last five years due in large part to connections we’ve made with one another.

Buying groups in our industry cater to different types integrators and each has its own personality. The three main groups we see commonly referenced in the CEDIA channel are ProSource, AiN, HTSA, and Azione (there are other groups, but these are a good start on your search). By checking out each group and making up your own mind, you’ll be sure to find the best fit for you and your company. Are you ready to get in the ring?

Stay frosty and see you in the field.

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