Difference Makers: Midwest Sales Group

First Rate in the Second City

WORDS BY JAMIE SORCHER

At the helm of his own company for more than 15 years, Steve Fahlmark has built solid relationships with dealers, vendors and installers to make his mark in the Midwest.

It all started with Y.E.S., Your Electronics Store—a retailer in the Chicago area where teenager Steve Fahlmark kicked off his retail career on the selling floor.

“I rose to become the store manager and then I ended up getting hired by the Kenwood representatives in the area to go to work for their firm called Brook Marketing,” Fahlmark said.

There, he represented top lines including Kenwood, Boston Acoustics, EPI and Ricco. He spent the bulk of his career at Sales Network and Leading Edge where he represented brands such as Rockford Fosgate, Lighting Audio, JBL, Bazooka, Clarion, MTI and many more. Ultimately, he knew someday he would go out on his own.

“I was born in Chicago. I know Chicago, and I am familiar with all the customers,” he said. “I’ve been working with these guys for 30 years. Not just that, but I have also seen the changes with the big stores coming and going, from American TV to Circuit City to Sound Advantage to Sound Experience. All those stores are gone now. I rode the wave out with the transition to work with the dealers who are still left in the marketplace.”

Covering Illinois and Wisconsin, Midwest Sales Group has what might seem a relatively small territory compared to rep companies that have five states, but Fahlmark noted that it follows the EIA guidelines.

“I have half the state of Illinois and pretty much all of Wisconsin except the very left side which goes to the Minneapolis rep,” he said. “My territory is not that big, which is actually kind of nice because I can cover it and be in the stores all the time. What my dealers tell me is that they appreciate seeing me all the time and that I always give them information [they need].”

Presently, Fahlmark services about 65 retailers. “That takes into account ABT to the small retailers, but what gives me the edge to be in these stores all the time is that they’re pretty much condensed in the Chicagoland area or right up in the Milwaukee area,” he added.

Gotcha Covered

One of the missions for Midwest Sales Group is providing total market coverage. “I strive to make sure a brand is sold within every area of our territory without conflicting with other dealers,” Fahlmark said. “As a marketing representative, the key is to keep all your dealers happy and working together. To do that, you can’t have dealers across the street from one another selling the same manufacturer’s brands.”

Fahlmark explained he will go into a large area, and he might set up only two dealers in the entire territory to cover the whole market. “Then I would go to the next market, to Green Bay, Wisconsin, and do the same thing. Then Stevens Point, Wisconsin, and do the same thing—so there are no holes in my market for the vendors I represent.”

The whole process can be seamless, according to Fahlmark, with an experienced rep who understands political values. “If a retailer wants a certain line that is already in another store, you can let them know that it might be a possibility,” Fahlmark said. “There might be an opportunity for them, and I remind retailers that this is an ever-changing business, so down the road it could happen. What you must do is let the dealer know that currently we’re protecting the dealer who already has this brand.”

As Fahlmark explained, “If you were the existing dealer, I would give you that same benefit of the doubt to make sure I would protect you. With that said, I might pull out another line which they can buy through my company. I know where the A, B, C and D dealers are, and if I am going to open up another dealer, then I clearly tell—and get permission

Making the rounds and getting lots of face time with the dealers in his territories is Fahlmark’s calling card, but he also appreciates the opportunity to connect with industry folks at KnowledgeFest, like the most recent one held last month in Indianapolis.

from—the nearest dealer to make sure that they are okay with it.”

The last thing he wants to do, Fahlmark said, is surprise a dealer by opening another dealer nearby. “There are reps who do this, younger reps who are green, who don’t understand the business. You have to protect your dealers, and that is my main goal.”

No Money Left Behind

Midwest Sales Group sets a goal level for each of its dealers in the marketplace. “When you sign up a JL Audio dealer, they have the opportunity to buy in at three different levels,” Fahlmark said. “They can buy in at a $3,000, $6,000 or at the $10,000 level. When a dealer comes on, you put a quota in place so the dealer doesn’t go out and pick up other competitive lines. For instance, if a dealer picked up my line, I really wouldn’t want him to be a Rockford Fosgate dealer. I would want him to support JL Audio.”

With goals in place, Fahlmark keeps on top of retailers by sending them monthly statements so they know where the sales numbers are. “I also send them quarterly numbers so they can earn rebates that the manufacturers put forth depending on how much volume the retailer does,” he said. “I keep my dealers intact so they know how much they have ordered, and if they’re $3,000 short of the seven percent rebate, they get a call and an email from me saying, ‘Put an order together so you can pick up $500 in rebate money.’ It’s constant contact and constant communication so dealers don’t leave any money on the table.”

Choosing which vendors to work with, Fahlmark noted, has changed dramatically. “It used to be you would pick up any vendor and run with it, and try to sell everybody everything,” he said. “Those days are done since Amazon came on the scene and changed the whole playing field at MAP policy. I want a high-profit line that my dealers can make full margin on. The dealers have adapted to that philosophy over the last few years and only support those brands that bring that type of protection to the marketplace.”

By not being on the Internet under MAP, Fahlmark said, “those brands are the ones dealers love to sell because they can make their 50 percent margin. That practice is upheld by JL Audio, Focal, AudioControl and JVC—so these vendors have really stepped up their game as far as policing the Internet and that’s what opens the doors for your dealers. Dealers want lines that are not prostituted all over the Internet.”

Fahlmark estimated that it is just about a 50-50 split with vendors who allow their brands to be sold on the Internet and those who don’t. “It used to be that only 15 to 20 percent of vendors were monitoring, but in the last few years with Amazon in the picture, dealers have to go with a forced MAP policy,” he said. “That is kind of what you want—a forced MAP policy that the retailer signs. They have to abide by that or they get cut off. When considering whether to bring on a vendor, I am very particular as to which ones I carry because I know what my dealers want—highly profitable lines, protection, and the brands that consumers are asking for every day.”

Those assurances are especially critical for the mom-and-pops to run their businesses profitably. “They have taxes, insurance and installers to pay,” Fahlmark added.

In the Back Door, Out the Front Door

With all the dealers Fahlmark visits in his territories, it is not just about working with the owner of those companies, but the installers as well. “Some people just meet with the owners and walk out the door,” Fahlmark said. “My philosophy is to walk in the back door and walk out the front door. When I get to meet the installers, they tell me what products they like, what they don’t like and they give me lots of feedback that I can share with the manufacturers. My contact with the retailer is throughout the entire store. I am close to the installers, the owners and the managers.”

Midwest and JL Audio have a strong relationship. Among the select brands that he works with, Fahlmark wants to partner with manufacturers who have a high-profit line that dealers can make full margin on. Pictured: Steve Fahlmark (left) and Andy Oxenhorn of JL Audio.

To keep those dealers’ employees knowledgeable and up-to-date on product features, training is an important focus for Midwest Sales Group. “I personally do training with the dealers,” Fahlmark said. “I conduct trainings in person or I send out product links so dealers can do trainings direct from the manufacturers. A lot of the vendors have web training, so I can help arrange that.”

With Xtreme Kustoms Wheels, Fahlmark knows it’s all hands—and ears—on deck for a crank-it-up event. This DB drag race invites customers to come and play their stereos as loud as possible. At this event, Fahlmark said, someone hit 160 DB.

With Xtreme Kustoms Wheels, Fahlmark knows it’s all hands—and ears—on deck for a crank-it-up event. This DB drag race invites customers to come and play their stereos as loud as possible. At this event, Fahlmark said, someone hit 160 DB.

Midwest Sales Group also offers annual training at KnowledgeFest, Fahlmark said. “We do trainings at the local hotels here for JL Audio. Every year they come in for a week and do trainings for the dealers,” he explained. “They are able to assist those dealers who have been around for a while and can get

intimidated by some of the newer technology. JL Audio and Focal came out with a lot of new DSPs, which are a little bit different than the standard amplifier where you’re flipping switches. This is a case where you plug the laptop in and go to the computer and you do a computer set-up of your system.”

Dealer events, like truckload sales or tent sales, have shifted into the background—at least for now. “We used to have more events, but my dealers don’t really have those as much anymore,” Fahlmark said. “ABT does their private sale three times a year. They are known for their customer appreciation sales which are enormous. With promotions, we have a short window here. Half our season is remote start season and the other half is car audio.”

Whether it’s for training, stopping in for a quick hello, or a conversation about new product, it is Fahlmark’s in-person visits to dealers as well as his loyalty and honesty that make Midwest Sales Group the success it is today.

“My claim to fame is that if you call and can’t reach me, I will call you back immediately,” Fahlmark said. “My voicemail on my cellphone even says that. It says, ‘Hi, you’ve reached Steve with Midwest Sales Group. Please leave your name and number and I will call you back immediately.’ The dealers love it.”

His quick response, Fahlmark said, “is because the lifeblood of my company is my customers. Dealers get a return call the minute I get off the call I’m on, or walk out of the meeting I’m in when it’s finished. There’s no waiting for a call until the next day,” he added. “I call the dealers back immediately—and you can print that!”