Several years ago our firm hired a consultant to help analyse trends and how we should adjust strategically for the future (not a LDS). This was when the internet was for the techno-geek who made us all nauseou about how the internet was going to change the world etc.
The consultant spent the whole day talking about a lot of stuff, but the only thing I remember him saying was this:
"If you're in the middle, rethink your business."
The internet will continue to put pressure on those in the middle of a transaction. Margins will continue to shrink. Easier and more cost effective technology will help put manufacturers and consumers together without the middle margin. Count on it.
By the way, stop ranting about us poor divers! The guy whose product you're trying to sell is providing it to someone next door - actually on that same computer you've got sitting in your shop. You can't stop it, but the manufacturers are the ones looking for more efficient distribution channels.)
That being said, I'd be pretty loyal to a LDS that
1)
would acknowledge that I do have a choice to get the product cheaper with the click of the mouse and would work with me to come to a fair price.
Unrelated story: a few years ago I was shopping for a diamond for my wife. It was my first internet purchase ever - several thousand $. I did my research online, found what I wanted in terms of size, quality, etc. and then gave around 10 diamond stores around here a chance to win my business. And I wasn't expecting to pay the same. I would have paid a bit more - maybe $500 or so. One store actually said that with an internet purchase you don't get any service! I said, "How much service does a diamond need?" Needless to say, I got the diamond online.)
2)
provides opportunity to dive current products from a wide variety of lines in a pool or other setting.
As already noted, no internet provider can compete with that. Sure, some people will take advantage of the opportunity and still get the lower price online, but a lot of people are just decent folks who respect someone sincerely trying to help and backing it with real service.
3)
told me when the products they carry aren't right for me.
This is a big one. If I feel you are trying to sell me what you have, then we're in an adversarial relationship. No loyalty ever goes to the used car salesman.
I really don't know if this model will sustain a small shop. But I know the old one gets high margins from people who aren't knowledgable - and the internet makes everyone more knowledgable very quickly.
"If you're in the middle, rethink your business."
