Are Trunkslammers Stronger Than Ever?

We’re in San Diego and trunkslammers are running rampant. It seems as if every guy who used to work for Circuit City, Tweeter, Good Guys and Comp USA are all out there working out of their trunks….......too many think that the way to get the job is sell the equipment at or near cost and make a living just charging for labor.  Too often they get money up front, do a little for the customer and then disappear.

Heaven help us for sure because the White House certainly isn’t.  The small independent businessman is getting torn up from all ends. More Government controls and taxes, out of control costs and consumers looking for the cheapest price possible, even if that contractor is a “trunkslammer”. And no one is doing a darn thing about it. Locally the best we can hope for is to see the trunkslammer and call the local code or licenseing officials and hope they get there in time to catch them in the act. I’ve spoken to many in the trades about running local commercial spots to make the public aware of the possible problems when dealing with non-licensed or un-insured contractors working out of their trunks. Until this problem is dealt with I’ll keep on fighting and try to keep my head above water.

Philip Ammirati
Independent Electrical Contractors of Rockland County

What you are seeing is normal and expected. As our society is pushed further into one ism or another.the fall of capitolism will create the rise and growth of black market

Trunkslammers and any body who can buy from electricals.
In my part of the world, home sound distribution and automation is being taken over buy retial, trunkslammers and even alarm and cctv installers. Sound has a history of being treated as the “last on the list” on a lot of builds with whats left in the budget to pay for it. Now it’s being farmed to any tradesmen on the job site willing to do it at “best cost”. End consumers seem more interested in “bargin installs” then paying for the best job available.Educating the public doesn’t seem to hit home as they are creating the need that trunkslammer fill . People seem to have lost the value of having things done by those actually trianed to do them. I see the same issue in alarm and cctv as well. I think in this economy. People want what they can’t afford and are willing to take the chance of who installs whatever, if the cost is something they can pull off. Quality is for those with money LOL the average guy takes what he can get.

I think John Hancock nailed it best.  When the economy suffers, people do just as they do in war time, stretch every dollar until it squeals.
As a nation though, we gave up investing in good equipment and professional installs.  People buy the cheapest gear they can get, and the cheapest install, figuring that if it lasts a couple of years, maybe they’ll be in a position to buy better.  They usually don’t though….........
Fotunately though, where we are there are no licenses and permit restrictions.  We are the “high priced company”, we do good work, and we’re always busy.  Performance pays in keeping customers, cheap pays in getting new ones you don’t want anyway…................

Conditions are prime for trunk slammers to flourish. Not are only clients looking to save a buck but manufactures are loosening up distribution to keep up the volume. Trunk slammers these days can offer some rather compelling solutions.

Here’s an interesting scenario:

Two A/V/Integration industry veterans (15-20 yrs experience) have opened a company (licensed/insured) and are authorized dealers for the most desirable lines in each segment of the industry.  Their offices are in their homes, their inventory is ordered mostly on an as needed basis.  Spare parts and supplies are stored in a garage sized building.  Google Voice, smart phones,  IP phone lines and a part time, experienced administrator allow all clients the ability to reach a live person during business hours or on weekends.

Labor is provide by licensed and insured sub contractors who are also A/V industry veterans.  The owners assist in programming and client instruction.  The subs make more in 30 hrs. than they made as employees working 40 hrs. full time previously.  Long term relationships with electrical contractors provide leads, additional labor for rough-wires, and a team approach to extensive lighting control system installations.

Shipping and receiving are handled by a UPS store.  Text messages/emails are sent whenever a shipment from any delivery agent are received.  (This costs about $50/month)

Clients are happy since they enjoy the benefit of every project being managed by an owner.  They are paying less money for high quality equipment and labor because the overhead to run this business is extremely low. (These guys are winning almost every project they bid because they offer exclusive brands at list price, but provide relatively inexpensive labor) The subs have a vested interest in making the clients happy because referrals mean more work for them in the long run. 

All projects are client financed and all equipment is purchased COD or pre-payed taking advantage of the best possible pricing.  (the owners have terms but don’t need them) The owners make more money doing fewer jobs and everyone is happy.

Looking at this company and their very satisfied clients, I can’t help but think the “Trunkslammer” business model may be a great way to compete in this very difficult market.  I also sincerely doubt their clients will migrate back to the big guys with their million dollar show rooms as the economy improves.

@lbaltz—this is a great business model. By definition, I believe the “trunk slammer” moniker applies to folks that are small and disreputable.

My own integrator was a one-man shop with a home office when I hired him. Now he has a theater in the house to demo for clients + one employee.

He works with other local companies for much of the install work.

Urban dictionary

trunk slammer - Derogatory term for a contractor who has minimal skill, experience and equipment.

@julie jacobson - I agree with your comment, but there are many aspects of the actual “trunk slammer” business model that make sense in today’s market.  As an integrator who rode the bull market and plasma TV wave, I believe we were fooling ourselves about how important an expensive showroom and multi-thousand dollar add campaigns were worth.  Well designed systems, properly installed and promptly serviced, can bring more business than a fancy showroom.

In my experience the integrator following the low overhead model is often portrayed (and denigrated) as a trunk slammer by the guys with a 3000 square foot showroom and 5-10 installation crews.  This industry is changing and we all need to adjust our business models accordingly.  Think in-wall iPad ($1000) vs. $5K+ proprietary panels.

I apologize in advance, this will probably be lengthy.

@ibaltz - You almost described my current situation to a T and so I guess I’ll own it.  Two years ago I had 5 employees (not including myself) and a simple but technical showroom.  I had a lease, a van, high overhead, and spent most of my time trying to keep others busy. 

My office manager and I sat down some time before things went south in the economy and recognized that out of our last 15 clients only 2 had been to the showroom.  About 3 weeks later we closed down the showroom and moved into cheap office space in what could be considered a small business park.  It has white walls, old ceiling tile, and is just ugly.  What it does have is a receptionist out front to accept shipments and a common board room to share with the other tenants (mostly engineers and independent insurance salesmen).  I dropped two employees and it became me and 3 others. 

Last year we had one of our best years despite the move, but still it’s been either feast or famine.  It seems like for the last 6 months every integrator within a 30 mile radius has been bidding on the same jobs.  I even showed up on a $10k home theater job to find the customer had mistakenly scheduled a friendly competitor for the same time.  We just laughed about it and went inside.  We found out in that discovery meeting that he was talking to 6 integrators.  Neither of us got the job. 

So about 6 months ago I took something into consideration.  My dad has been a builder for almost 40 years now.  He usually built 4 or 5 houses a year that ranged from $300k to $600k.  The thing was that he had a full time job and built homes on the side.  He managed skilled subcontractors and checked on the jobs at least twice a day. 

So I thought, if he can build several homes at a time with a full time job and no employees, then why can’t I run an integration business the same way?  As the owner I was working about 50-60 hours a week.  I was paying 3 full salaries and then taking out what I could (which meant I was working for about $10/hr).  So I put everyone on subcontract.  I let one installer go (for other reasons).  I moved my business back into my home (where I started over 7 years ago) and my wife now helps out with the bookkeeping.  I signed up for Grasshopper.com to handle my business phone calls.  I’m selling the company van (hit me up if you’re interested).  Oh yeah, and 4 weeks ago I took on a position with another company that I’ve been working with on a side project for web/iPhone development. 

A funny thing happened when I did this.  My previous partner/employee went back to doing more electrical work and is staying really busy (he had stopped doing that completely when he came on as an employee).  I don’t have the pressures I once had of being responsible for salaries, benefits, etc.  I’m getting paid for ALL the hours I work.  I’ve gotten 3 new jobs in the last 2 weeks and I’ll actually make good money.  I do all the design, ordering, programming, project management and bookkeeping.  I pay better money to the subs (previous employees) to do the installs per project.  And, the most important part is that I can now pick what jobs I want to take.  It all comes down to my ability to manage my time and hold myself accountable to stay lean.  My clients don’t see a difference.

The main lesson I’ve learned is you’re never in a position where you can’t make a change.  Einstein said it best when he defined insanity as “doing the same thing over and over again expecting different results”.  I realized that following the same path everyone else was taking just wasn’t going to take me anywhere but living off of borrowed money. 

Here’s the kicker.  Some of these other guys that are considered “trunk slammers” may be smarter than you think.  If they’re skilled (possibly let go from a larger integration firm), have access to products, and are responsible, they could be considered the next plumber or electrician on the job…especially if they’re better at developing relationships with the builder than a “big fancy expensive company with a showroom”. 

I certainly wouldn’t call myself a trunk slammer…I like the term “bootstrapper” much better.

Again, sorry for the long post. This just hit close to home .

Hi Jason

I have Been in bussinbess for over 20+ years as a small bussiness & a corporation , having 1 employee to having over 7 employees .
The Small bussiness with 2-10 employees cannot sustain the overhead to pay for good talent . Thier are certain economic factors that govern small bussiness no matter what the economy is doing .
Trunk Slammers have always been there & will always be there . Low price = No warranty , Reliability, Longitivity, Recorse for the owner .
Quality,Integraty,warranty True Trust , Partnership will never be there with the trunk slammer . It is the starting point for a lot of people who cannot afford the overhead of starting a true bussiness . It is we will call it the learning curve of bussiness. Sad to say this causes an effect of bad employment standards for others . Usually the customer unknowingly takes a bath on the learnig curve.
Trunk slammers are here today & gone tommarrow.
The laws direct & dictate that any person knowingly & willingly hiring a non licensed contractor shall assume all liability & responsibility on them selves .
Example if a unlicensed trunkslammer completes any work on a property & has a serious accident they can sue the owner , customer & possibly cause the owner to loose thier propery . So the econimic savings of hiring them is extremly bad .
Know the laws & Report Trunk slammers to the license board,state, authorities . This protects the small bussiness.

Other factors are that it is econically more benificial for any licensed , insured , bonded bussiness to work out of thier home with less than 5 employees .
The Economics of bussiness , Taxes,Benefits , overhead dictate that a small bussiness cannot succeed in these hard times .
Truckslammers can & will work for free & when they are finished leave a road of economic decay for the industry as a hole.
Causing economic s to accept lower pay scales,prices,& forcing a recession into place .

I can relate to ryan as he mentions the story above . I did exactly the same thing . Only I sold the business in 2006 , Tried to work for other companys only to realiaze that the other companys saw the opportunity , took advantage of my education & back ground , causing me to re inter the contracting field as thier compition . I have been making great money in the last 2 years as I re think the economy , restructure how I do bussiness , how I look at bussiness as a hole .
We sub contract , outsource everything , manage very tightly all projects .
We have noticed the industry taking less , making less , giving less , becoming more competitive , causing most of the middle of the road contracting firms to go out of bussiness , ( 5-25 employees ) .

Be Smart , Be well informed , Well educated , Do a lot of Research as the economy will devour small bussiness ‘s quickly .

@lbaltz, I’ve gone to bat many times for the little guys—since my own installers were one- and two-man shops.

I had an integrator submit a story for Electronic House on how to qualify a CE Pro and I had to disagree. Showroom, nice Web site, etc….Some of my favorite integrators have no such thing.

The lesson is: small (even solo) does not necessarily equal trunk slammer.

To all who read , Dont Misunderstand the difference in Talent & Trunk Slammer .
licensing
Bonding
Insurance
Training - Verifiable ( Not Trade Shows )
Accountability for actions in field - Contracts for accurate direction -
not here say , I said, you said , could be , would have been , possible. No Fancy sales tactics .
Clear ,Concise & held accountable for actions
( T.S. ) Usually have minimal experienc ( 1-3 years & suddenly they are experts in trade s . )
Do a job on the side type actions @ a fraction of the overall real cost .
Journeyman means 5-8year s of real experience in multiple talents of the trade . not 1-2 years as a monkey or laborer .
Most Trunk Slammers Work out vehicle, No licenses, not insured, not bonded
If job goes south who pays

@Julie, I’ve noticed and appreciated the fact that you’ve been somewhat of a proponent for the small guys.  I think it’s worth noting here, too, that one could argue the other side of the story to say that some large integration firms with their big showrooms and huge overhead are making it hard for anyone to make money.  Not all, but some. 

It’s happening to most of the building contractors I’ve done business with for years as well.  Guys are bidding out commercial construction projects as low as 2%-3% profit just to keep people busy.  No one can sustain that over time.  Not only that, if and when the market recovers, will that necessarily mean that prices can go back up after such a drop? 

I lost two $45k plus projects (for previous, happy clients) a couple of months ago to a larger company with about 12 employees.  I don’t know for sure, but from talking to the builder on one of the jobs about why they “went another direction” it seems it had more to do with what the other company was “throwing in”.  I don’t think their decision had anything to do with pressure from trunkslammers.  I think it had more to do with the fact that they have 12 people to keep busy and if they don’t get the job someone else will.  Then what would they do?

As a matter of fact,  I’m kind of upset that they have so much overhead with their salaries and benefits. I’m mad that they have that big fancy showroom that they don’t need.  I’m irritated that they might give stuff away at cost or a loss to get jobs.  Not really.  Honestly I feel for the owner who I’m sure loses sleep every night thinking about how long he can keep his thing going and where the next project will come from and how he still has debt in the company and who he might have to let go and how the banks aren’t loaning any money and on and on.  I’ve been there and it sucks.

Here’s a suggestion to anyone finding themselves in that position of fighting to stay busy.  Read “The Dip” by Seth Godin and if you find yourself on a cul-de-sac…get off.  There’s no better time than now to make radical changes in your business model.  As with most of Seth’s books, that book slapped me in the face and changed my whole perspective.

As a small shop myself, (one man band) I have to say that being the big guy doesn’t guarantee a great job. I’ve seen plenty of jobs where the client was oversold for their needs and the install was not the best quality.

On the other hand, I’ve seen signs on trucks that advertised carpentry, painting, light plumbing and electrical and flat panel TV installation. Huh? I’ve also had people tell me that they weren’t going to pay more for installation than the TV cost because they got a cheap TV.

The trunkslammers are filling in that lower niche. It isn’t right, but the low price, like in so many things, and in this economy, is very attractive. The consumer just doesn’t realize the risk they take when they use unlicensed, uninsured contractors, and most don’t care. They shop price.

There is some great advice and experience shared in these posts. Julie, I hope you will continue to spotlight the little guys who are trying to do great work.

Here is another question. Without a demo, how do you differentiate yourself from the low priced guys (you’re higher but why are you different? Prove it.) and the big guys with all the shock and awe that blows the buyer away. (Wow, check that out!)

How do you keep the pipeline full? How are you finding customers?

Great posts folks, they are keepers.
Good luck to all.

@GLS.  “How are you finding customers?”  The best way is to let your customers find you customers.  The largest projects we’ve gotten were from referrals from previous clients.  Bend over backwards to provide the best customer service and use social tools to spread the word about your company.  Friend clients on facebook and get to know the names of their kids (and pets).  When you stop considering them clients and start considering them friends, there’s nothing they won’t do to refer you to someone else.  Become an advisor to their needs, not a salesman.

I just left a large company to start my own business. In my situation and market a showroom won’t do me much good, the best sales tool will be doing good work and being of high integrity.

Ibaltz’s biz model will be mine for the near term, that’s how I lived starting up a remote office for larger company.

The difference between a reputable firm and a slammer is that the firm is focused on maintaining a reputation and relationship, and a slammer is just focused on getting paid cash.

All great comments and I mostly agree with all of them. I too had a showroom for 13 years, but I was primarily a 2 channel high end dealer back then. As home theater invaded my world, instead of trying to perfectly recreate hearing the rosin on the bow of a mintage Stradivarius, I was dragged kicking & screaming into the world of helicopters, hand grenades, and dinosaur footsteps.

When home theater came into play, trunk slammers began their invasion into this market place very easily. They didn’t have to know all of the ins & outs of fine A/V equipment… They just thought that louder was better and they worked cheaper than us pros. Thus, any idiot with a roll of speaker wire and had access to cheap A/V receivers and JBL speakers put them in business.

A few years back, (and I didn’t like it at the time), certain counties in NJ began requiring a license to run/install low voltage systems. However, that license showed the client more proof of your ability and or qualifications to work in their home more than any PARA or CEDIA logo you had on your front door or on your business cards. In my neck of the woods, trunk slammers are almost extinct due to the licensing requirement laws now in place.

I don’t remember who made the comment, but that person was absolutely correct stating to let your existing customers get you your new ones. My business model is right on target with most of the above posts and I’ll stick to it. If a client wants a cheaper way out by using a trunk slammer, be assured they will sooner or later wind up calling you to clean up their mess.

I look at it this way-  The training & experience now required for great system integration is tough enough for established pros to keep up with. A roll of wire, a cheap A/V receiver, and a set of JBL’s just don’t cut it any longer. If that’s the route that the client chooses, you don’t want them as a client from the get-go because they’ll never get it until the see a real system in action. Even then, they simply might not care and nor should you.