From the category archives:

Appliances

Private Labels – Saving Hundreds. Same Exact Product. Same Exact Quality.

by Steven M. Fisher

Here is what no manufacturer is going to tell you outright, but it is the way things work.  There are two ways a manufacturer can go, private labeling and/or branding.  By way of example, until LG launched their own brand in the United States, they were and still are one of the largest “private labelers” in the U.S.  The way it works is that LG will manufacture their product for another label.  The inner workings are exactly the same and the outside will have some cosmetic changes, (usually minor).  Therefore, you can save a lot of money if you know who they private label for.

Another example is Kenmore.  Kenmore private labels all of their appliances.  They are manufactured by JennAir, Whirlpool, etc.  Those companies give Kenmore a head start in terms of distribution and sales and then launch their own label a few months later.  That’s why Kenmore appliances are first rate and also why they are cheaper than everyone else.  Additionally, it is why they are always out first with major innovations.

The question is then, what is in it for the manufacturer to private label if they can make more money using their own label?  Simple.  Distribution.  The appliance manufacturing world relies on getting the product to the consumer and that is a distribution problem.  Sears has the best retail distribution network going.  JennAir and Whirlpool have none, so they have to sell into other retailers.  They are happy to give Sears a head start and then follow up with their own high end label.  This way when the buzz wears off from Kenmore, they launch with JennAir, etc.  It is a well thought out and brilliant strategy that has been working for years.

However, as the consumer gets more educated and watches their money closer, the lure of the “high end” brands might give way to the generics.

How does this benefit the consumer?  If you like a certain product, find out who they private label for and buy the private label.  You can save hundreds and sometimes thousands and not skimp the slightest on quality.  To my knowledge, the ultra high-end brands like SubZero and Viking don’t private label, but you can’t cover every appliance manufacturer in a single article.

Private labeling works the same way in a grocery store or with prescription drugs, but that is another story.

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Appliances: Telling The Differences

by Steven M. Fisher

I got more phone calls and emails from my article:  “Failure to Communicate – Manufacturers and Consumers” than anything I have written in the past 6 months, so it only stands to reason that  I would follow it up with an article on major appliances.

Let me set the stage: Last April I was at a press conference at the Kitchen and Bath Show (KBIS) sponsored by Sears.  KBIS is one of the many places people like me go to learn about the latest and greatest so we can communicate that information to you.

At this conference were some of the “top” corporate executives from several major manufacturers.  I asked a very simple question: “ The most common complaint that I get from consumers is that they are overwhelmed and confused when choosing major appliances.  Most importantly, the majority of consumers I have spoken with feel they cannot tell the differences of one product from the other.  Additionally, the sales people know little more than they do.  Are you aware that this problem exists and how are you working to correct it?

There was silence, with the exception of Betsy Owens, General Manager, Kenmore who immediately “got it” and answered the question.  The rest were completely unprepared to answer that simple question and every other question that they weren’t previously scripted for.  After attending that Press Conference, it is no wonder why we are all confused.  If the people the manufacturers put on a panel can’t answer questions directly, how can we expect sales people to?

Ms. Owens acknowledged that there was a problem in explaining differences to consumers.  She also said that going forward, this is one of Sears/Kenmore’s biggest challenges.  I hope the other manufacturers follow their example.

In the meantime, my simple advice to you is do your homework before you walk into a showroom.  Know what kind of features you are looking for and most of all, don’t rely on the sales person.  You have no idea what he is told to sell and chances are that he is as clueless as the manufacturer’s top management. Once you find the features and the price you want, then buy with your eyes.

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