Taking On Goliath

Plugging Yourself In

Competition has made an impact on Mike Tucker's appliance and furniture business, Tucker's Best Brands Plus in Rogers, Arkansas. It's not just that folks in Tucker's neck of the woods shop at Wal-Mart (and its appliance-selling corporate child, Sam's Club): Tucker estimates that 40 percent of the people in his local market are Wal-Mart employees.

"I'm about six miles from Sam's Club and seven miles from Wal-Mart corporate headquarters,' says Tucker, 46, who co-owns the business with his wife, Joan. "When we bought this business [in 1988], there wasn't much competition. But now, there are probably five stores that compete with me."

Tucker has had the good sense to shore up his strengths. He saw that competing strictly on price was a losing battle, so he emphasized service and went after the demographic most likely to prize it. "A lot of retirees in our area are used to getting [good] service, and are willing to pay for it," says Tucker. "We recently spent six days working with a customer on a purchase. We spent a lot of time but made a $25,000 sale--and the customer got exactly what she wanted. You can't run a chain [with the same attention] you can give to one store."

But Tucker has also been smart enough to see the limitations of going it alone--and he's been fortunate enough to belong to a buying group with real initiative. Germantown, Tennessee-based Best Brands Plus began strictly as a buying group--helping independent store owners pool their resources to secure better prices on merchandise. Recently, however, it's expanded its mission to include a variety of programs, such as developing point-of-sale computer systems, providing demographic and marketing information, and creating design prototypes for store owners who want to update their interior decor.

Tucker was first in line for renovation, although he admits it wasn't easy turning his store over to Best Buy Plus' professional designers. "At one point, the designer said he was going to paint pink and red triangles over a [display]," Tucker recalls. "I called a time out. I said, `Hunter green and burgundy are okay, but pink and red don't do a lot for old Tucker here.' " Yet this was precisely why Tucker needed a designer's help. "He finally talked me into it, and now I like it," Tucker reports. "The store looks impressive."

Sales have followed suit. Although the renovation cost Tucker a cool $1 million, sales volume quickly rose 250 percent, and Tucker saw a profit after only two months. It was the collective intelligence of the buying group that provided Tucker with the means and motivation to make this necessary change, but it was Tucker's competitive will that made the change possible. Score another one for the underdog.

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This article was originally published in the June 1999 print edition of Entrepreneur with the headline: Taking On Goliath.

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