By Andy Kriege, YSN
Independents pride themselves on having the products their customers need and the ability to get them into their homes immediately. But that has become more of a challenge than ever right now, as COVID-related plant shutdowns and slowdowns have created product shortages that continue to loom over the industry and across the globe.
The production slowdown problem has been exasperated by high demand fueled by people spending an inordinate amount of time shopping on their devices. In addition, the recent government stimulus has created the perfect storm for supply shortages. While not all independent dealers are experiencing a boom in demand, most BrandSource members are.
YSN asked Ron Bemis of Bemis Appliance in Yakima, Wash., to share some of his strategies for getting his hands on all the inventory he possibly can — a challenge made more daunting by his wide product assortment. But Bemis ought to know: The family business dates back to 1949 and is the largest locally owned appliance store in the area. What’s more, Bemis sits on the BrandSource board of directors; is a past president of the Northwest Region; is a member of the BrandSource Hall of Fame; and is an admired independent dealer and a longtime fixture of the appliance industry.
Forecast Further Out: While there is no crystal ball to show you what to buy or where to find it, Bemis said you have to be flexible and that his strategy has changed frequently. When the company first found out there would be shortages, it loaded up on models that it knew would sell. The initial emphasis was on top mounts but has since migrated to almost all refrigeration and top-load laundry. “I really try to forecast way out and order inventory for many weeks ahead,” Bemis said. “We also make people put a deposit on pre-orders. That forces customers who buy somewhere else to report back and have their name taken off the list, which helps keep our order list as accurate as possible.”
Reconsider: “Instead of just looking for models we would normally sell, we look beyond to other options,” Bemis said. “Our second-choice options may be priced a little higher than we think they should be, but when you can’t get anything else, they look pretty good.” For those selling multiple brands, changing the product mix may be a good option, and migrating to other lines and deals that may not have looked great a few months ago certainly warrant a second look now. “We are taking a look at alternative brands that don’t ordinarily sell as well,” he acknowledged. “Deals that were not as appealing when I could get my bestsellers look much better now. The bottom line is that we need product to fulfill our customer’s needs, and we have to get it somewhere.”
Stay Put on Price: Since virtually all retailers are in the same boat, stay firm on pricing and maintain a decent margin, Bemis advised, as it is highly unlikely for any shopper to walk out these days over $25. The box stores, restrained by narrow choices and limited flexibility, are not as nimble as the independents. The local Home Depot, for one, has been sending many customers to Bemis Appliance, knowing they are likely to find what the customer needs. “Any independent can change directions faster than a big ship,” Bemis observed. “They don’t have the flexibility to pivot this fast and referrals from the boxes come in all day long. Their first question is, ‘If we buy this, when can we get it?’”
A Look Ahead: Bemis expects the product shortages to continue for some time, at least until late fall. It is therefore important, he said, to remain nimble and diligent in searching out inventory to meet the unusually high demand and to mitigate the tight supply situation that the pandemic has created. He believes that if members aren’t married to specific makes or models, and invest the extra time and effort to find what is available and place orders, they too will find success getting the products they and their customers need.
INVENTORY UPDATE: In a follow-up to last week’s availability assessment, Chad Evans, AVB’s Vice President of Merchandising, shared the latest on the industry’s supply chain situation. “We are seeing a couple of appliance manufactures opening factories that had been closed for several weeks and are resuming production,” he said. “However, due to backlogs, current ordering run rate, and lower output due to social distancing requirements in the facilities, availability will continue to be tight through the end of the year and possibly beyond.”
Evans cautioned that “There are no products that are immune from these supply issues. As a general rule, higher-end products are in better supply, but there really is no category or brand that has not been affected.”
Freezers, he said, continue to be the hardest-hit product in terms of availability, although “I see pressure building on refrigeration in general and entry-level laundry” as well.
Added Evans, “I can’t stress enough the importance of scheduling orders out months in advance, and for dealers to continue to search for products from all sources as often as they can.”
BrandSource is a unit of YSN publisher AVB Inc.