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ProSource’s Custom, Retail Members Upbeat

ProSource, a national buying group of more than 500 specialty retailers and custom integrators (CI) with annual sales of more than $4.5 billion, is having a good year whether its members are traditional dealers or installers.

ProSource CEO Dave Workman

ProSource, a national buying group of more than 500 specialty retailers and custom integrators (CI) with annual sales of more than $4.5 billion, is having a good year whether its members are traditional dealers or installers according to Dave Workman, CEO and president of the buying group.
The emphasis that ProSource puts on profitability – not only on the CI side of the business but on the specialty retail side as well – is giving this group of independent businesses an advantage. Workman noted that in CI, “There is a different index versus retail in the third and fourth quarter,” but that new home construction in different parts of the country has been strong.
At retail, business has been “strengthening each month since May and has been extremely strong,” according to Workman. “The categories that pop out for me are, of course with our group, audio, as you would expect.” He added, “We control our own destiny with promotions in many audio and video categories based on its profitable volume with key suppliers. We are no longer just a passenger in those discussions, but a driver.”
For instance, in TV, ProSource’s focus is on the premium market of 4K UHD, namely the higher price point models of 75-inches and above. “It makes us more relevant,” in terms of profitability for ProSource’s members and vendors, Workman said.
Availability for premium 4K UHD TVs is not a concern so far, Workman noted. “There is more pressure on commodity [TVs],” which ProSource members do not focus on. He said supplies of premium TVs from the group’s three major suppliers – LG, Samsung and Sony – are good so far.
The key for ProSource, as well as other premium TV dealers and their suppliers, is fall promotions and whether in Workman’s words, they will be “balanced enough to grow dollars and profits.” His view is that, based on what ProSource has learned so far, this will occur. “If total unit sales above $2,000 [retail price points] increase, 75-inch and above TVs will grow in dollars,” he said.
Workman said that aside from ProSource’s expertise in selling premium TVs and its traditional strength in audio systems, the expansion of IoT products in a variety of categories has become a business that its members can leverage. “IoT, whether it is Nest, home security – you go down the list – is an important area for us. For the average consumer it is one thing to change a thermostat for a do-it-yourself [product].”
But he added, “The growing market is to connect all of the devices around the home with routers and make the system work efficiently, which is beyond the grasp of many consumers. Our customers want more than one [IoT] device. We cater to the CI market and want to provide solutions.”
Speaking of new technologies and opportunities, Workman remarked that routers, “along with shades and lighting systems are categories that didn’t exist back in 2010 or 2011.” The next big areas may be “another level of lighting in the home with higher-end LED and outdoor lighting. A lot of things are going on with in-home connectivity: wireless multi-room systems, voice activation around the home, and others.”
ProSource is positioned to sell these technologies and share expertise with its members in its affiliated BrandSource group which consists of many traditional electronics/appliance dealers. “Will the appliance dealers be able to handle” many of these connected products once they become established is the question. Workman suggests, “Partner with us. I don’t expect [traditional appliance dealers] to install such systems, but partnerships can be established in such markets.”
He proudly commented, “It’s tough to deliver quality. Customization is what millennials demand.” This is a valued demographic his members have focused on. “We have a ton of luxury brands available to us and we do plenty of business with [millennials].”
The reason Workman is so optimistic is that ProSource members are, “Healthier now than they were several years ago, in terms of profitability. ProSource has members in all 50 states. “We are proud to be called good dealers.” He added, “ProSource has the infrastructure to support more dealers. We still believe [we can] grow into 750 or 800 members in our five-year plan.”

 Steve Smith was the longtime editor-in-chief of TWICE. He is also a member of the Consumer Technology Hall of Fame.

Steve Smith