Expanding Accessory Items Can Increase Your Bottom Line
The following article was written by Chris Rose for The Music & Sound Retailer, January 2010. Over the past 10 years, I۪ve had the opportunity to visit some of the world۪s most successful and high profile retailers of musical instrument and professional audio products to try to sell them on the notion of stocking and promoting the sale of replacement and upgrade loudspeakers. The first conversation is nearly always the same. I begin my sales pitch on our brand of loudspeakers, and the manager or owner quickly says, We don۪t really sell any loudspeakers here. Sometimes the service center orders in a few for repairs, but we don۪t get many calls for that. I always wonder where that owner or manager thinks that the consumer is going to find a replacement or upgrade speaker. Chances are, he/she is a musician himself, and he/she۪s blown several speakers over the years. He/she has also probably traded in or retired good gear because of a speaker failure or because he/she didn۪t like the tone or performance of a product he/she owned. Didn۪t he/she realize there was a cheaper and easier way to solve those issues? The number of amplifiers and speaker cabinets manufactured each year is staggering. Each of them includes one or more loudspeakers. For most of those products, the loudspeaker is the most expensive component, and manufacturers are often forced to make compromises on the speaker to remain competitive. The result can be a product that is just OK, but would otherwise be fantastic with the right choice of loudspeaker. Further, speakers are generally made from paper and cloth components that are ultimately somewhat delicate and can degrade over time with use and exposure. I۪ve been fortunate to have an insider۪s view on the number of loudspeakers produced for MI and PA audio products. I can safely say that it exceeds 10,000 units daily. The numbers for replacements and upgrades sold to distributors and dealers in the U.S.A. alone are equally compelling. Although we don۪t have access to all the data, it is fair to say that U.S. consumers spend in excess of $15 million yearly on such purchases. This is amazing considering the fact that consumers can۪t generally find them in their favorite music store! Sales of guitars, amplifiers, keyboards, and speaker cabinets have all suffered significant declines recently. Entertainment is alive and well though! Nightclubs and casinos are still open. Worship services continue. Artists are still performing. Children and adults are still interested in learning how to play an instrument. All of these venues and individuals still endeavor to keep their music instruments and equipment in the best possible repair. All the while, dealers and distributors struggle to find new ways to get a fair share of the business that remains. Today۪s consumer is smart. Anytime we need something we can۪t find locally, we just Google it. All of us would rather go down the street and buy it, but if we can۪t find it at home, we۪ll buy it online. If it is something technical in nature, we often need advice. If we can۪t find that locally, we can usually find it online, too! Recently, I drove 25 miles to the closest (Radio) Shack to find an amplifier to drive passive speakers from my computer. After searching the store to no avail, I reluctantly decided to ask one of the two employees there. I hated to interrupt their conversation regarding a stupid boyfriend, but decided that the storeowner would appreciate it if I did. One immediately deferred to the other, who was quick to admit that she didn۪t have a clue what I was talking about. I went home, did a quick Google search, and had an amplifier ordered within 10 minutes. I should have never left the couch. Consumers tell us every day about similar encounters they۪ve had in music stores regarding loudspeakers. Loudspeakers are an incredible accessory item for any music store! The poor economy and the consumer۪s desire to maintain or upgrade their equipment, rather than buying new, makes it even more important and lucrative to consider. For the cost of a couple of keyboards or amplifiers, any dealer can obtain a nice stock of well regarded replacement and upgrade loudspeakers for musical instrument amplifiers or speaker cabinets. Don۪t waste your time though if the plan is to put them on a shelf in the service center. If you kept strings and tuners back there, you wouldn۪t sell many of them either. Replacement and upgrade speakers need to be on the store floor, close to checkout, just like any other accessory. They won۪t sell if they are not there where people can see them. Most speaker manufacturers have nice packaging, catalogs, banners, application tools, and technical service departments standing by to help you make recommendations to your customers. As with all viable accessory items, dealers can enjoy significant margins. Those that creatively display loudspeakers and work with manufacturers to provide application solutions for consumers often enjoy thousands of dollars in additional sales volume. What۪s more, sales of loudspeakers are a new segment of the market for most dealers_a segment that tends to flourish when sales of other products are down. They also provide dealers an option for consumers who just can۪t financially swing a new amplifier or new monitor, or new pair of speakers.