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New Posting! 9/12/14 See Below:
Who is ELECTRIFIED.COM
and Where did They Come From? -8/12/14
An Old-Fashioned American Success Story. 
Electrified Discounters Inc was the brain-child of two young men in 1983 who had worked in retail audio sales for a number of years and wanted to do it better and more efficiently, thus making it cheaper and easier for the average customer to buy products. They knew from past experience that the overhead in a Brick and Mortar store directly caused higher prices for the consumer. Heating and air-conditioning and all the other associated costs of operating a large retail space had to be paid for by charging customers more for their purchase. By selling directly though the mail, costs were reduced and the savings could be passed directly to the consumer who now was not limited by geography. Electrified’s customer could be anywhere if they could be found and told what was happening in a little two-story walk up in West Haven Ct.. It was an obvious win – win situation and with that ideal – High Quality at Lower Prices, Electrified Discounters Inc was born! Now 31 years later, Electrified stands as one of the oldest and most successful independent, single ownership companies in the modern electronics era. As we will see this was no accident, but the result of hard work, innovative techniques, and totally out of the box thinking.
Who are these guys anyway?
Phil Krass – Founder, President, and the owner of the aforementioned, and now long gone, audio store that was named after him, Krasco Stereo. This is where Phil first learned the joys (and horrors) of owning a business. He was the whole company for a while, selling to college “reps” who would then resell to the friends and relatives. He did well and expanded to a small retail store, hired a couple of people and sold stereo equipment as well as car stereos and installation. In 1977 he needed a sales person and put an ad in the paper. He interviewed and hired someone who was to start the following Monday. The next day Jim Sonet walked in and applied for the job. He was told that the job was taken but that maybe he should talk to the owner. Phil and Jim met and talked for two hours and that evening Phil called and offered Jim a job. That was 37 years ago and they have worked together every day since. (We really do not know what happened to the guy that was originally hired for the job. Some claim he started making cookies and started “Famous Amos”, others insist that he became one of the founding members of the Talking Heads, one of the great rock bands of the late 70’s, but seriously we have no idea where he ended up and wish him well in whatever endeavor he decided to pursue.)
Jim Sonet – Co-Founder, Vice President - A school teacher by training, Jim was looking for a summer job until the Fall semester started up. He walked into Krasco Stereo, was hired, became a salesperson, and two weeks later knew he would never teach formally in a school again. There was something about the opportunity to be creative, outrageous, and teach people about electronics that struck the right chord and basically that was that. Two guys, totally different in most every way (except that they are both incredibly silly at times) but united in an old school work ethic and a desire to succeed doing things differently than the traditional way. In 1982 after a number of years of reasonable success as a small independent retail audio company with two stores, it became clear that the future was not going to be rosy trying to compete against the ever growing chain audio stores that were popping up around the country. They got together one weekend and after consuming a few adult beverages they began to talk about what was good and bad about business. The people you talked to and helped, that was great they both agreed. The hours were horrible. 6 day weeks and usually 9 or 10 hours a day (not even counting the emergence of Sunday as a retail day and the occasional Midnight Madness Sale). The satisfaction of helping people, educating them and steering them in the right direction to what they needed as opposed to giving them the hard sell was paramount. They went back to Phil’s original idea about using college reps, but instead of selling just to them, why not just offer great pricing via mail-order to everyone? Slowly the concept of Electrified Discounters Inc. came into being. Selling electronics of all kinds to all kinds of people at the lowest possible prices and delivering it fast and trouble free. This was the beginning of it all. A mail order catalog company, and they rushed to tell their parents about their ideas. Of course as most parents of children born in the 60’s know, the parents had only one comment. “What are you crazy? You will lose every penny you have!!” Armed with that kind of support they decided to go ahead and do it anyway. The company was based in the remains of one of the two audio stores that Phil already had a lease on. The rent was low (as were the ceilings) and the cost for heating and air-conditioning was low as well since neither worked very well either. All in all it was a perfect fit. Of course every time a large delivery was made that had to be carried up a flight and a half of stairs piece by piece it seemed a little less than so. Regardless, the first catalog was produced, mailed out, and perhaps even moré surprising the phone began to ring.

Coming soon: How do we decide what to sell? The Past, the Present, and the Mind-blowing Future… 

September 11, 2014

Robec takes a chance.

 

Now the phone was ringing and our Heroes were trying to figure out how to sell everything without committing to anything a strategy many people who have absolutely no money are familiar with. There was a small amount of car stereo and audio equipment left over from Krasco but hardly enough to support a large amount of sales and even more concerning was the fact that very little profit could be made from those items. A great deal of time was spent every day calling distributors of every shape and size to see if there was any product they would drop ship directly to customers for Electrified and if price sheets with specifications could be obtained so someone would have a clue as to what was being sold and how much it would cost. Air-conditioners, Refrigerators, Audio and Video equipment, 35 Millimeter Cameras? Sure why not?  Anything and everything electronic and for that matter anything at all that someone would sell to us was fair game. We drove every wholesale salesperson nuts with questions and begging for spec sheets and better prices. (A practice that still goes on today.) Eventually the “pricing bible” was created.  This was a large metal open binder that held an A-Z divider set and allowed us to add price sheets in alphabetical order as we received them. When a customer would call, we would leaf through, find the product and a price, mark it up and sell it. Of course it was not rare to sell something to a customer - get off the phone with them – call the distributor and be told. “That model? Yeah those were great. We sold out of those two months ago.”

That would start the calling to other distributors all over again trying to save a sale that never should have happened in the first place.

Most long term electronics people were very old school. They had been through the wars, selling white goods (appliances etc.) and moving though audio and other like products. They had little interest in helping two young guys make a sale. In fact they often resented the silliness and somewhat irreverent way that Electrified went about its business. Why lighten everything up and have fun? That is not the way business was to be done. They liked to do business the way they always had done business. They believed in quantity sales with low margin. Credit was for established businesses and there was no way they were going to sell to Electrified unless it was on a cash up front basis. They had no vision of the future, nor did they care to hear how anyone else might plan to grow a business. They did not use computers. They did not understand them, nor did they even believe that a market existed for them. (Of course at that point even though we used a Radio Shack TRS-80* computer for our customer database, neither did we.)

Robec joins the team:

One day a salesperson showed up at our door from Robec Distributing in Massachusetts. They specialized in computer and computer accessories. He had heard about us calling their office and begging for information and thought he would check us out on his next foray into Connecticut when he visited his other customers. He was a young, pleasant, guy with a great sense of humor and a bond was formed at once. Amidst a lot of repartee that had everyone laughing, a key in the way Electrified would do business was forming. Direct contact utilizing our natural zaniness made us stand out and helped form a bond with other young people in the computer business. He offered us an opportunity that he thought would be a great fit. Robec was distributing Okidata dot matrix printers throughout the country. Part of their agreement with Okidata was to remarket all the refurbished printers that they had. These consisted of returns from overselling to dealers, as well as customers who had exhibited buyer remorse.(For those unfamiliar with the term, this is the moment when you purchase something with the unpaid rent money and are setting it up in the house just as your wife walks in.)

Basically this product was in pristine condition, in original boxes and contained all parts and accessories. The units came with an Okidata warranty so there was no risk to the consumer. The best part for Electrified was that Robec was willing to give us thirty day terms to pay for the product. We could actually stock and advertise and ship immediately when we made a sale. It was risky since we were unknown and it was unclear if the small business world was really going to buy into small computers and printers but the discounts were huge and the opportunity was there. Phil wanted to gamble and Jim, while playing devil’s advocate as always, went along. The resulting explosion in sales was remarkable, the lights went on over their heads and a new way of selling computers and peripherals was born.

*Known throughout the industry later as the Trash-80.

 

Coming soon: The Staff grows.