Price matters
In retail, the easiest way to attract customers away from your competition is by offering the best price. That is achieved by purchasing in bulk, something that often challenges smaller operators.
Although Abt Electronics is only a single store, the company’s showroom covers 350,000 square feet, making it large enough to move inventory en masse and allowing it to buy in bulk and negotiate deals with vendors.
And while Abt can negotiate competitive deals as skillfully as his competition, he keeps prices below those of his peers’ by saving on operating and marketing costs.
“We have very little overhead compared to other people,” says Abt. “We spend under 1 percent advertising, and the average person in our industry is spending 7 percent advertising. So by us not having to advertise, just having good word of mouth, that’s (the) biggest savings we have. And we’re very efficient just having one store — people drive to us, we don’t build stores where they are. That keeps our price down, too.”
In addition, the company has a DIY attitude toward maintenance and upkeep. Abt Electronics doesn’t outsource the care and maintenance of its delivery trucks, repair services on the products it sells or its own building maintenance. By doing it all on its own, the company saves money and passes those savings on to customers.