Rx for a Short Sales Season
If you suffer from a short selling season, talk to Alan Trusler, president of Aladdin Steel Products, a $12-million wood-burning-stove manufacturer in Colville, Wash. Until recently, its sales peaked with the fall foliage and petered out with winter's last snowstorms. Undaunted, Trusler doubled his sales season by using --
* Early-bird incentives. Trusler entices his 350 dealers to sell stoves in the middle of barbecue season by offering them steeper discounts for the entire year if they stock stoves in the off-peak months -- March through July.
* Flexible financing. Floor-plan financing gets dealers products as needed. Dealers pay (with interest) a third-party finance company for units as they're sold. The finance company pays Aladdin up front. Trusler absorbs his dealers' interest expenses if they sell their units within eight months.
* Cash discounts. Dealers who pay for products up front get cash discounts for buying early -- 8% off each invoice in March, 7% in April, 6% in May, on down.
Trusler's strategy has helped even out cash flow, and Aladdin's production process now can run year-round, lowering manufacturing costs. Even with the aggressive discounts, Aladdin's pretax profits are twice the industry standard, and the company grew 451% from 1987 to 1991.
-- Susan Greco