A $9 R/C Helicopter versus NORDSTROM

Tuesday, December 13, 2011 8:00:00 AM

Categories: Customer Service

By Mark Tomalonis
Principal, WarehouseTWO, LLC

customer service can work instead of competing on price I recently bought a new toy. It is an R/C ("radio controlled") helicopter, purchased from a legitimate retailer here in California. It has two channels and works very well. I paid $9 USD for it. NINE DOLLARS! As of this writing, that price is equivalent to €8.02 EUR and $11.75 CAD. Who can manufacture, import and market such an item for this price?  Apparently the Chinese manufacturer and the Australian importer can. Kudos to those two companies. But this remarkable buy caused me to have concern for manufacturers and sellers in my country, the United States. My thought was, "We're doomed." How can any provider, who is not the low cost provider, survive in this world economy?

Then I thought of NORDSTROM.

compare nordstrom customer service to yours...are you a low cost provider or high quality vendor? According to its web site, “Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 225 U.S. stores located in 29 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 117 Full-Line Stores... Nordstrom, Inc. is publicly traded on the NYSE under the symbol JWN.”

For those of you who are not familiar with Nordstrom, it is not a low cost provider of anything. To the contrary, it is one of the higher priced clothing retailers in the U. S. Yet it flourishes. On any weekend day, the parking lot of its store closest to our office is nearly full. Year round.

In an informal survey, we asked shoppers why they patronized Nordstrom. “Low prices” was never a reason given. Instead, shoppers told us that they shop at Nordstrom for three reasons:

To our surprise, those we surveyed were exceptionally loyal to Nordstrom. Yet Nordstrom is not a low cost provider. Hmmm.

Is your company the low cost provider of the goods that you sell? Probably not. So how can you gain customer loyalty like Nordstrom has?

Consider the loyalty factor of “wide selection of products”. Inventory-sharing can help here. By leveraging the inventories owned by peer distributors throughout your country (or the world), you can offer your customers a much wider selection of products, for immediate shipment, than can your local competitors.

If you cannot offer the equivalent of a $9 R/C helicopter, try to be more like Nordstrom. Inventory-sharing with peer distributors via WarehouseTWO can help. Contact us to learn more.

Incidentally, my $9 R/C helicopter broke after a week. Maybe you do get what you pay for.

About the Author
Mark TomalonisAfter a successful career in sales and operations management in the wholesale-distribution industry, Mark Tomalonis is now principal of WarehouseTWO, LLC.  He amuses himself by writing articles, such as this one, to help wholesaler-distributors execute their operations better.  Mark’s articles and tips are published in WarehouseTWO’s monthly e-newsletters.  Click here to subscribe.

About WarehouseTWO
WarehouseTWO, LLC is an independent “inventory-sharing” service created exclusively for durable goods manufacturers and their authorized distributors, and for any group of durable goods “peer” wholesaler-distributors, such as members of a buying/marketing group or cooperative.  To learn how inventory-sharing with WarehouseTWO can help your business, visit the WarehouseTWO website, or email info@warehousetwo.com.