I recently had the opportunity to visit a number of kitchen and bath showrooms, and one thing I noticed was the lack of complete kitchen and bath displays. This got me thinking about how kitchen and bath dealers use showrooms to entice homeowners to make a purchase.
The showroom is the most expensive part of your business. To maximize its effectiveness, you must consider the square footage, and understand the significance of what you display in that space.
Don’t assume homeowners will figure out by themselves what you do. For instance, I visited a company whose name did not say anything about bathroom remodeling or products. The showroom had a few vanities and one nice whirlpool tub on display, but that was it. Not surprisingly, the firm’s bath business was not very good.
I suggested they add “baths” to the company name, and then we found a wasted area with low margin products on display to use for a couple of bath displays. It really made a difference in bath sales.
When adding displays, it’s not just what you display, but in what context. For instance, almost all homes have a 5'x8' bath in them. So if this is the market you’re looking for, you want to show a bath of that size. In our new showroom we put three 5'x8' baths on display. The first one is a very basic bath, standard fixtures, white in color, cultured marble panel walls in the tub area with a shower curtain, vinyl floor tiles, basic 30" vanity, a plate glass mirror and a light fixture. A ceiling fan and painted walls complete this display. The cost of this bath is shown at $11,250, installed in an average first floor 25- to 30-year-old home.
The next bath display shows a bit of an upscale bath, with a whirlpool bathtub, cabinets over the tub area in the soffit and a tall storage cabinet on the wall opposite the vanity, which has two working drawers and has been raised to 34" high. There is a banjo over the elongated toilet, as well as a ceramic tile floor, upgraded wet water fixtures, a fan and a light in the tub area, onyx panels in the shower/tub area and a medicine cabinet with a commode cabinet. This bath is shown at an installed price of $32,000.
The last bath is the same layout with a full custom bath. The tub has been removed and replaced with a 60"x32" shower, a beautiful shower wall with ceramic tile and inserts, body sprays, hand-held fixture, clear glass shower by-pass doors, Silestone vanity top with a banjo, same vanity as in the second bath but with a rub-through look and distressing, a warm floor system, tri-view medicine cabinet the full width of the banjo with special lighting, a small flat-screen TV, a special finish on the fixtures and a steam unit. This bath is shown at $42,000.
Why build three baths? The reason is the average customer has a hard time understanding how a 5'x8' bath can get to this price. From a business standpoint, this spells it out.
As you consider your showroom, you must consider the cost of the floor space you’re paying for. If you have “dead displays,” you need to cut your losses and get rid of them. I’ve heard of dealers keeping displays that don’t sell because they “paid a lot of money for them,” or because they are relatively new and “look great.” Displays are very expensive real estate, and if an area isn’t making you money, then you’re losing money.
In a 2,500-sq.-ft. showroom with a 500-sq.-ft. office area, you have 2,000 square feet as the showroom area. Take your cost of rent, utilities and insurance for the store, total the number and divide by the square footage of the overall showroom. Now take the area with the displays and you will have the cost per square foot for the displays.
Let’s assume the total annual rent or mortgage cost is $75,000, utilities are $15,000 and taxes are $4,700, for a total of $94,700. Divide this number by 2,500 square feet and you will see you have a cost per square foot for the showroom of $37.88. If a display takes a 10'x10' area, that would be 100 sq. ft. x $37.88, making this display area worth $3,788 a year.
Now consider the cost of the actual display itself, add that to the equation and you may find the area where the display sits is expensive. If the display is not paying back, you need to find a product that will make you the money to support it.
This formula is a simplified version. For an exact cost you should check with your accountant.
To make sure your displays are effective, they need to be complete. For instance, a bath display that doesn’t include faucets or fixtures or a kitchen display that doesn’t have appliances will have less impact than a complete one. If your showroom doesn’t sell appliances or plumbing products, partner with someone who does. Or, join a buying group, where you may have these products available to sell for a profit.
If you’re looking to sell the total project, you should be selling the total package of products. It’s important to remember we are selling kitchens and baths, not cabinets or sinks or hardware. When we purchase an automobile, we don’t purchase the frame of the car and then go elsewhere to get the tires or the audio system. We purchase the car ready to drive out of the showroom. I believe the same is true for the kitchen and bath industry.
Your vendors can also help you maximize your displays. These days, more manufacturers are doing whatever they can to help us get their products in our showrooms – things like memo billings, where the vendor will make the products available to the dealer on a 12-, 18- or 24-month agreement. The dealer pays no up-front money to the vendor, but for every order received, the vendor will credit 5% to 10% of the order to the bill, until the display becomes a no-cost because of the purchases earned from the display.
While we all know there is no truly free display, memo billing or extended terms can go a long way toward helping complete a showroom that allows customers to see what the complete display will look like. Take a good hard look at your showroom and see if it is stale or fresh. Consider replacing the hardware on a cabinet display, a dated countertop, an old floor or a tile backsplash. If you don’t sell tile, find a tile company that would like to get referrals from you in exchange for free tile for the display. Making your showroom look truly inviting will make you money in the long run.