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Small Electronics

Apr 1, 2009
by Kevin Zimmerman

While the economic slowdown has had obvious, far ranging effects on many wholesale and retail sectors, it's actually been a boon for many wholesalers specializing in small electronics. Cell phones, televisions, MP3 players, and even kitchen appliances are all selling strongly, according to a number of entrepreneurs.

"With a lot of our kitchen appliances, we're selling them as fast as we can get them," says Addison Everett, manager at Odom's Wholesale. "Since we're a discounter, people have been flocking to us. They're thrilled to find something like a KitchenAid mixer at a discount price."

Yaniv Arai, president of Buy 4 Less Electronics, reports that sales have been solid, with LCD television sets, MP3 players, portable DVD player, and GPS systems being particular standouts. Digital cameras, he notes, have also done well.

"Our margins are down, but our volume is up," notes Betty Laham, marketing director at Electroline Electronics, which specializes in televisions. "We've obviously felt a slowdown, but there's no doubt that people are still buying." Manufacturer mandated price reductions in both flat screen and LCD television sets have been a boon, she adds.

And the price reductions aren't limited to TVs. "The price has come down considerably," says Sam Maktabi, sales and marketing director at cell phone wholesaler, Wireless Warehouse. "They've come down probably 10 to 15 percent over the past few months." The ever-growing mobile phone space continues to evolve, Maktabi says; the devices' styles and storage capabilities keep changing, and thanks to the iPhone and similar competitive devices that have popped up in its wake from manufacturers like Nokia, LG and Samsung, the appetite for the "latest and greatest," has shown very few signs of abating.

"We're in a very competitive market," Maktabi declares, "and as a result we have to be more innovative than ever, seeing what people need and want and bringing in more product lines as necessary." The iPhone and Bluetooth lines currently lead Wireless Warehouse's sales, and Maktabi expects to mine similar success with a line of Wii accessories.

The company also continues to do "decent," business with its line of iPods and accessories, he says. Besides the players themselves, Wireless Warehouse offers a full range of iPod skins and cases. The company also offers a line of MP4 players, devices which offer music, video and gaming applications. While the U.S. market for MP4 players has yet to clearly emerge, total MP4 sales for ten leading countries in Asia were nearly $1 billion last year, according to research company, GfK Asia.

In addition, Wireless Warehouse operates the Liquidation Center USA website (liquidationcenterusa.com), an importer/exporter/distributor and wholesaler for a wide variety of products, including phones, TVs, and video games and accessories. Maktabi says a large part of that website's inventory comes from overstock from such retailers as Sears, Best Buy and Target. "The functionality of Liquidation Center USA isn't what it should be," he says, "so we're revamping it completely."

No such overhaul is due at Electroline Electronics, Betty Laham says, but that doesn't mean that the company's website is remaining static. "In electronics, you're updating prices practically every second," she laughs. "Beyond that, we're striving to improve the information about our products online. We feel it's important to give them as much information as we can, and not just about pricing. We want to be seen as the expert in the field." That expertise has come into play as prices for next generation televisions, especially LCDs, have come down.

"People definitely seem to be moving towards LCD and away from plasma," Laham says. "Since LCD is becoming more affordable, the bigger sizes are doing better. We are selling a lot of 52 inch screens," which typically are priced around $2,000. She adds that the picture quality on an LCD is usually less likely to be lessened by outside glare. Electroline is considering implementing a "2 for 1" package deal for some of its products, such as combining a 42 inch and 37 inch set together for a certain price. "So many people are switching over from their old analog sets that it makes sense."

That switch is due in part to the imminent changeover in TV broadcasting from analog to digital signals, originally scheduled for Feb. 17, but now set for June 12. Laham notes that Electroline is also doing a brisk business with set-top converter boxes that are capable of managing the changeover without viewers having to purchase new sets.

A customer education campaign of sorts is also underway at Odom's, where Everett says the lion's share of traffic still comes from word of mouth. As such, the company is experimenting with new ways of getting the word out. "We're just a couple of country boys," laughs the Arkansas based wholesaler, who's been in business since 1991. "We just recently started advertising some stuff on the Internet, which seems to be paying off, and we just started advertising on TV," on local CBS affiliate KFSM. "That's part of a push to get more retail business sent our way."

Indeed, Odom's is in the process of legally setting itself up as a retail outlet as well as a wholesaler, as part of its effort to maximize business in an uncertain economy. Besides kitchen appliances like microwaves and mixers, Odom's has also had success with digital cameras and digital photo frames, most of which can display digital photos as a slideshow. Everett notes that some also support additional multimedia content, including movie clips, MPEG video files, and/or MP3 audio. He adds that plans are afoot to expand the company's website to make it more accessible to existing and potential customers, and to increase its inventory listings.

Digital cameras are also in demand at Simple Products Corporation, although president Brian Christensen maintains that such demand is short sighted. "We were the manufacturer for ready to use flash cameras," he says. "But that business has dropped off in a big way over the past year, and is being replaced by digital, which I think is a mistake."

While Simple Products' line of FunPak cameras, preloaded with 35mm film (priced at $3.50 to $3.75 per camera), are still finding some favor, Christensen says, "People are looking for cheap digital cameras to replace single use cameras, which is due in large part to hype about, and lack of education on, what a digital camera can do. No digital camera will provide the quality they're looking for, which the ready to use cameras can." Christensen predicts that such single use cameras will maintain a significant presence in the marketplace for the next five years.

In the meantime, he says, Simple Products is doing well with products geared towards the gift industry, where the trend is, again, towards anything digital. Solar powered digital key chains, which flash a person's name, are coming into their own, replacing the old analog models that simply had the person's name painted on. "Anything you can customize and keep very inexpensive and make digital is very much in demand right now," Christensen says.

Also doing well for the company is its line of Outback LED flashlights ($7.99 to $10.99 per flashlight), which in addition to providing illumination, includes a magnetic side and an LED side that lights up, allowing for it to be attached to, say, a truck or trailer while changing a tire or conducting other repairs, or examinations at night.

Christensen says Simple Products is in the process of launching a new wholesale website featuring 10 products, including the LED flashlights, "to cater more to the web community. Right now our website does very little for us, but we are building a base of wholesale customers." In addition, he says, the company is looking to branch out into new industries. While declining to specify what those might be, Christensen says the product expansion will revolve around advertisements in magazines and other media, usually lasting about three months, to test various messages.

For his part, Anai at Buy 4 Less Electronics says he also plans to revamp his company's website, though he declined to give details.

The following companies were interviewed for this article:

Yaniv Arai, President
Buy 4 Less Electronics
2500 Walnut Street, #212
Denver, CO 80205
Tel.: 303-534-7100
Fax: 303-942-3666
Website: www.buy4lessinc.com

Brian Christensen, President
Simple Products Corporation
138 East 12300 South Ste C-165
Draper, UT 84020
Toll Free: 866-553-8886
Tel.: 801-553-8886
Fax: 801-553-8887
Website: www.simpleproductscorp.com

Addison Everett, Manager
Odom's Wholesale
1711 N 6th Street
Ft. Smith, AR 72904
Tel.: 479-783-1970
Fax: 479-783-3300
Website: www.odomwholesale.com

Betty Laham, Marketing Director
Electroline Electronics
1322 W 12th Street
Los Angeles, CA 90015
Toll Free: 800-449-8889
Tel.: 213-745-3800
Fax: 213-745-3804
Website: www.electroline4u.com

Sam Maktabi, Sales and Marketing Director
Wireless Warehouse USA
2730 Howard Ave Unit 2
Windsor, Ontario N8X 3X6
Toll Free: 866-317-2962
Tel.: 519-250-9700
Fax: 519-488-1135
Website: www.wirelesswarehouseusa.com

Topic: Product Trends

Related Articles: economy  electronics 

Article ID: 991

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