Richard Glikes, president/CCO, Azione Unlimited, has a comment that is sure to be music to any integrator’s ears: “The best news of all is that clients’ wallets are open. Business is great!”
That sentiment, despite supply chain issues, is demonstrative of how buying groups are providing dealers with deeper relationships to participating vendors, and perks such as discounts and access.
“The relationship has been stressed based on supply chain issues,” Glikes acknowledges, “and the lack of endemic vendor tools to communicate and respond to dealer issues. However, business is booming, and great business covers a lot of sins.”
Andy Orozco, vice president, business development, ProSource, notes that in many ways, dealer/vendor relationships have strengthened. “We’ve all had to support one another to better understand consumer behavior/demand. Manufacturers need information that will help them build better forecasts and ultimately be able to deliver the proper products and services to support their dealers. The relationships extend beyond the vendor, as many brands utilize manufacturer reps, and then, of course, the buying groups are an active participant in these discussions.”
For Jon Robbins, executive director, HTSA, the only impact on relationships with vendors is the inability to get face-to-face because of the pandemic. “So we pivoted and leveled-up our alternative methods of communications to keep the relationships strong. Normally, we have a whole host of events that represent face-to-face time with our valued vendor partners, such as our Spring and Fall Members Conferences, as well as several education events in partnership with vendors.”
While HTSA is anxious to get back to that more normal in-person programming, they have been able to maintain communication with vendors over the last two years to great effect. “One lesson we’ve learned is that it is important to not overdo it,” says Robbins. “There is a point where too much of a good thing can become counter-productive. In recognizing that, we’ve found the optimal balance to keep relationships strong and productive.”
Show Me the Perks
“The biggest perk, by far, enjoyed by HTSA members is the ability to communicate and share best practices with other dealers around the country who are similarly situated; dealers who look like you, have the same basic core values, and the same business model,” says Robbins. “We have successfully maintained that ability over the years, despite storms, economic recessions, business disruptions, and pandemics. To do so, we have carefully curated our membership; careful to not drive market fragmentation by over-subscribing members in any given market. This dramatically improves best practices sharing to the benefit of all.”
Information exchange for vendors and priority allocation for members have flourished during the pandemic, Orozco says. “Vendors are able to benefit from the group’s ability to provide them with market intelligence. ProSource District Managers work with their members to collect data that is shared with our vendor partners. Insight on which product categories are trending, visibility to the project pipeline, and major pain points in the custom integration market help vendors better focus on the needs of their dealers and give them the ability to react quickly. For the dealers, ProSource is able to be their voice with the group vendor partners. This goes back to before pandemic times. We are constantly working to develop strategies with vendors that put our members in a favorable market position.”
“The number one perk of being in a group is maximizing rebates from our negotiated annual programs with our vendor members,” says Glikes. “There’s never been a year as profitable as this one.”
And, yes, there are supply chain challenges. “We’ve had numerous conversations with our dealers to communicate the need to change from a ‘just-in-time model’ and anticipate their needs,” says Glikes. “Depending on the vendor, purchase orders need to be placed as far as six months in advance. The smart dealers are working with their vendor partners and purchasing inventory based on information provided by manufacturers, representatives, and regional salespeople. The market has necessitated a coordinated effort between vendor and dealer to satisfy client demand. Receivers have been by far the worst product category from a supply perspective. The good news is TVs have, for the most part, been available, and that’s an unexpected surprise.”
Supply chain issues are hampering ProSource members’ ability to stay on schedule and complete projects, Orozco acknowledges. “The most challenged category currently is audio electronics, specifically amplifiers and receivers. Any solution that enhances a client’s ability to work from home and entertain at home remains popular. Mature categories such as video, audio, control, and networking are consistently among the top categories included in projects and also extend to outdoor living spaces. Emerging categories gaining popularity include lighting fixtures as well as indoor/outdoor shades. We recognize this and continue to invest heavily in educational initiatives such as ProSource University, ProSource Academy, and the ProSource Lighting Technology and Learning Center.”
Supply chain issues are ubiquitous, Robbins says. “In a way, for us the impact has been cultural. After years of relying on our vendors’ skill in executing just-in-time delivery, we are forced to change our behaviors, particularly ordering practices, to navigate this new world of disrupted supply chains. The strategy for buying has changed dramatically, and we’ve tried to help our members in any way we can through enhanced communication. Rethinking logistics, something we rarely had to worry about previously, is just absolutely necessary in order to help ensure members’ clients are not impacted. As far as what products specifically have been impacted by the supply chain problem, it’s basically, anything with a chip.”
Lighting, Robbins continues, has seen extreme gains in popularity. “While some of this growth is the result of the group’s focus on the category, it is clearly gaining tremendous traction with clients. Another area exploding for us is control and home automation. We are seeing explosive growth with Crestron Home, with no end in sight. Also, longtime partner Control4 continues to do an incredible job for our members. In general, automation as a category has really performed well lately. This is because automation has become simpler to deploy and more reliable.”
Orozco says ProSource is excited to start getting back out into the market. “Our District Managers are once again on the road facilitating meetings with our vendors and members. This is the best way to build strong bonds between our dealers and vendors. There’s nothing like a face-to-face meeting, and we will soon announce our plans for 2022 which include national conferences along with regional meetings.”
