Q&A: Jim Ristow, Home Entertainment Source

As the market gets more competitive and as the margin on products gets slimmer, buying groups are becoming more important to custom integrators.

Even a minimal discount on product purchases can make a huge difference to a dealer’s bottom line. Moreover, buying groups offer the ability to gain access to specialized, exclusive product lines.

Finally, buying groups offer a competitive marketing advantage for those members able to garner more sales by leverage their membership against alleged "fly-by-night" competitors.

It’s not so easy, however, to become a member of some buying groups. Some keep their numbers small through restrictive membership requirements.

Home Entertainment Source is one of the largest buying groups with 500 members and, as a division of the Associated Volume Buyers (AVB) that includes the well-known Brand Source, it’s the only one that offers its members the ability to leverage a publicly recognizable brand name.

HES also has a full stable of vendor partners covering every aspect of custom installation. Nearly 60 manufacturers are listed on its Web site.

Executive director Jim Ristow spoke with CE Pro about the group’s membership and plans for the future.

Home Entertainment Source — How would you describe it?

HES is the specialty consumer electronics division of Associated Volume Buyers (AVB). AVB is the umbrella for several other buying groups, including Brand Source, Home Rental Source, Trib, Sleep Source, MARTA and Flooring Plus.

AVB is a member-owned, member-managed, not-for-profit organization in which each member has an equal share-holding position.

An annually elected board of directors composed of elected members governs the group. HES members have an annual volume range of $1 million to $25 million.

How many current members are there? What is their cumulative buying power?

As of today, there are approximately 500 members of HES. Annually, AVB represents $10 billion in annual sales, of which $1.4 billion is generated by HES dealer members.

What is required to be an HES member?

Our region managers evaluate each market individually. Minimum requirements for HES membership include an annual volume level of $1 million, two-plus years in business, an office or store front in a commercially zoned area, the ability to provide professional installation and a willingness to commit to the group.

What are the benefits of joining HES?

By joining HES, independent dealers are able to better compete against national accounts.

The way we do this is by offering our members invaluable volume buying benefits as well as just-in- time access to key products through the member-owned Expert Warehouse and Custom Warehouse solutions.

We also have several regional managers in place that help our members gain a competitive advantage in their market through in-field consultations, analyzing merchandising strategies as well as general business practices.

Our region managers play a key role in effectively communicating manufacturer and industry trends and information to members.

HES members are also able to enjoy many of the same benefits of a factory-direct account, including participation in sales and marketing promotions.

Most of our marketing opportunities are a result of collaborative planning and execution with our suppliers.

And because HES is part of the AVB group, we are able to offer a host of additional profit and business building services, which include wholesale and consumer financing, marketing solutions, extended service plans, health insurance benefits, business insurance, human resource solutions and more.