If you couldn’t attend HPBExpo this year, it was eye-opening as the majority of the industry is finally rushing to adapt to the new EPA 2020 wood stove emission standards. In talking with dealers, distributors and other manufacturers, several key takeaways emerged.
- Most manufacturers are severely behind. Less than 1/3 of manufacturers have any compliant 2020 models, meaning dealers need to start evaluating their showroom and inventory mix or get caught with big holes in selection.
- Many new models are getting rushed to market and lack proven real-world customer use. Look for manufacturers that have been delivering 2020 compliant models between 2016 and now to minimize your risk. MF Fire has been delivering 2020 certified models since 2016, leading the industry.
- Dealers who don’t carry much inventory stand to win, as dealers loaded with non-2020 inventory are forced to sell old units and not invest in new inventory. This will limit the 2020 models available in competing stores and should be used to your advantage. Educate your customers and seize the day.
- Dealers should look for 2020 manufacturing partners with low minimum order quantities to avoid market uncertainty in 2019, while gaining the benefit of selling new models – your customers do their homework and will be seeking new models.
- Beware distributors or manufacturers promoting non-2020 certified inventory. The risk of buying non-2020 inventory is high and you only have a year to sell it.
- If you are a dealer with substantial inventory, know that everyone in the supply chain with inventory, including other dealers, distributors (not just yours), and manufacturers will be trying to liquidate that inventory. Expect deep discounts everywhere in non-2020 compliant models. By some estimations at the show, discounts in the 70-80% range will happen by mid-season.
- Dealers holding substantial inventory should consider when to discount and at what level. Watch your competitors to keep a real-time pulse on what will be a rapidly deteriorating situation. This will minimize impact to your business while still selling through all your inventory.
- Expect to see extreme sales of older inventory online as manufacturers and distributors unable to sell direct will unload inventory to online retail sites who are willing to buy deeply discounted inventory.
- Customers will naturally segregate into those willing to buy bargain non-2020 compliant wood stoves and those seeking more efficient and cleaner burning stoves. Educate your sales staff to ask relevant questions to immediately determine which type of buyer they are talking to. Successfully determining the buyer type will allow you to maximize revenue by selling to 2020 buyers while liquidating old inventory to bargain hunters. At this point, all your costs for old inventory are sunk cost. Any revenue you can derive from sales of these units is money in the bank. The later in the season you go with inventory the less valuable it becomes. Some dealers will take a wait and see strategy, while others will provide strong discounts early to move inventory. Figure out which you are so you can implement pricing strategies and follow through.
- Have patience – this too shall pass. Market demand remains strong for wood heat, particularly as pellet fuel availability is expected to be unusually tight this year helping wood stove sales. A sufficient number of manufacturers, including MF Fire, have made the investment in 2020 technology and new models to keep the industry strong. There will be manufacturer fallout for sure – in fact more than 50% of wood stove manufacturers are likely to not have 2020 compliant models and will exit the market over the next year. Find your new favorites and start preparing your wood business today.
MF Fire has been committed to delivering only EPA 2020 compliant stoves since we entered the market in 2014.
We are growing our dealer network and are looking for dealers to join our family as official suppliers for our line of EPA 2020 certified wood stoves and firepits. If you want a manufacturer focused on proven innovation, quality, customer and dealer satisfaction, contact us today.
Click here to join our growing family of dealers.
Paul LaPorte, MF Fire CEO