Diversify Your Dealership

By Harold Plass

 

With retailing remaining dynamic, concentrating on profitability is crucial. Maintaining different profit centers can give a dealership the flexibility it needs to thrive. This is one of the recommendations of long-time NARDA member and director Harold Plass, as he and his brother and co-owner Dale close their Chicago-area dealership, Plass Appliance, that their father Walter and two of his brothers, Ed and Art, founded in 1938.  

Over the years, the dealership grew from its first store in Villa Park, Ill., a suburb of Chicago, to six stores ­– one on the north side of Chicago and currently five more in its suburbs of Naperville, Elmhurst, Addison, Northbrook and Marengo. Consumer electronics was a small part of the dealership, which concentrated primarily on appliances.

Looking back over how the industry has changed since he joined the dealership in 1972, Plass emphasizes the flexibility of multiple profit centers as being crucial to success. “I think companies that do their own service probably do a little better in this economy,” he muses. “Furniture and bedding is probably the best thing they can do. Those are not as much commoditized as appliances. I would say doing their own installation and service is probably a good thing – a profit center they could count on. And sell a lot of extended warranties.”

Plass also recommends offering high-end appliances that mass marketers don’t as another strategy for profitability. “One other thing we were always very successful with is that we always offered next-day delivery,” he adds. “That has been a real good closer for us.” 

A recent technological development is having repercussions throughout retailing, Plass maintains. “In terms of challenges, one of the biggest changes I’ve seen in our industry is the smart phone,” he asserts. “It’s had a huge effect on our industry."

“Now you’re up against somebody that has a 9-percent price advantage because they don’t have to charge sales tax,” he points out. “With a smart phone, customers can snap a picture of a model number and pull it up online in seconds, and know what everybody else is selling it for – that’s had a huge effect.”

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