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March Issue Feature: What's Happening - Progressive Expands Services

3-8-2017, Mobile Electronics -- There are many components that make up a sound system. There's a head unit to handle music, navigation and Bluetooth functions, tweeters for the high end, coaxials for the mids and a subwoofer for the bass. To send the signals, an amp, preferably with DSP, is used to maximize the audio output to those speakers. Finally, it requires a skilled installation technician to bring all the components together to create a cohesive sound system.

The same could be said of the types of products and services a 12-volt shop sells to its customers. And like sound systems, there are many different products one could choose from to create a shop's offerings. While a standard car audio shop might focus mostly on selling the standard "deck and fours," some stores have had to expand their offerings to keep up with new technology and declining car audio sales.

During his 25 years as a mobile electronics business owner, Alan Binder came to learn this modern truth well, leading him to diversify his business in multiple directions. Seeing a steady decline in his car audio business forced Binder to look into other revenue sources for his chain, Progressive Mobile Electronics. Binder transformed his chain into a diversified example of how a 12-volt business can find its niche in a variety of categories, including window tinting, breathalyzer installations and emergency equipment product and installation.

Retail U-turn

After selling his share in a successful restaurant chain that employed over 7,500 employees, Binder decided he wanted to take the money he'd made and fund a different kind of business. It ended up being Progressive Mobile Electronics, a chain of stores in San Diego, Calif.

Since buying the company in 1991, Binder expanded beyond just car audio with a several categories. "90 percent was pure retail and 10 percent was dealer business going to install radios and speakers in cars on those lots. By May 2016, 55 percent of the business was retail, 35 was emergency equipment and the other 15 percent was window tinting."

Binder admits that the emergency equipment business is a great place for retailers to make revenue thanks to the business model available in that area. "That's a business that will be there forever. Police, fire, FBI, DEA, sheriffs and Homeland Security are included in that category. We concentrated on undercover vehicles," Binder said. "The problem is that the barriers to entry can be quite high. It's not the cost of getting in, but it's being able to find the right contact in these government institutions that's very difficult."

To gain initial entry into emergency vehicle work, Binder recommends making friends with a local government agency like a police department. If you have a particular goal in mind, it doesn't matter which agency you start with since the field is very close-knit.

"People who work in the sheriff's office will talk to people with the police, who will talk to people in the FBI. They all know each other. Once you're in with one of them, you can get in with the others, but it's difficult to get in with the first one," Binder said. "It's also difficult to become a dealer with those necessary equipment brands. Federal Signal, Code 3, Whelan, Soundoff Signal—they have their dealers and protect their dealers very well. Initially, you'll pay a lot more to a distributor than you would direct, so your margins are going to be minimalized. You'll have to get in with a 10 to 15 percent mark-up when you're used to a 25 to 30 percent mark-up. You also have to have skilled labor to do this work since consistency is of the essence."

The bidding process can be quite rigorous as well, according to Binder, with up to 50 or 60 pages of documentation often needed due to the high level of consistency required. But thankfully, once a shop is in the system, they're in for good.

"Every store in the stereo business has the ability to be in this business. Particularly in small towns with a police department. I've seen police departments send vehicles over 200 miles from L.A. to San Diego to get done," Binder said. "It's just the difficulty to get into the business." 

Read the rest of the story [HERE].

Last modified on Thursday, 09 March 2017 05:45
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