Smarthome Direct Growth the Smart Way
That's a philosophy that Smarthome has espoused from the very beginning. In 1992, the company initially only distributed home automation products and parts under the proprietary Smarthome name. But customers began to clamor for more types of products. Kapur points out that the customers' collective desire for a one-stop shop for home automation products led the company to begin selling third-party products just a few years later.
Working now with nearly 1,000 suppliers, including such heavy hitters as Uniden, Samsung and Sony, Smarthome cycles new products into its catalogs regularly, with nearly 1,500 to 2,000 products added during the past year, Kapur says.
Smarthome's Jason Root, vice president of merchandising and product acquisition, stresses that having a good relationship with suppliers has been a key part of the company's growth in the past few years. While Root and his team often find new products at tradeshows, most new products are offered by the vendors themselves. Good communication has allowed these supplier relationships to grow. He's active in requesting and selling products from all these suppliers, encouraging suppliers to notify Smarthome when new products become available.
In addition to suppliers and tradeshows, other key sources for new products have been Smarthome employees and gadget and tech blogs on the Internet. "Our employees are all big fans of our product line," Root says, "and when they find fun things online or elsewhere, they'll send me an e-mail saying this is something we should carry."
And in the past 10 months, Root and his team have developed a global sourcing effort that has added to Smarthome's product assortment and bottom line. After noticing greater demand for a number of third-party products in the Smarthome catalogs, Root began looking for direct sourcing options for those items. His theory was that bigger margins would allow Smarthome to lower its prices on specific items, without necessarily reinventing the wheel. It's been an effective strategy, he says, because, "Most of the products that we've sourced have resulted in increased sales through lower pricing, not so much through a redesign or something completely different about it."
