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Have a question and looking for feedback from industry peers? This month KBDN listens in on dialogue between industry professionals as excerpted from the KitchenBathPros.com online Design Discussion Forum.
SELLING TO CUSTOM HOME BUILDERS
Can anyone advise me on developing a clientele of custom home builders for a cabinet supply business that recently opened a new showroom? This business has two other beautiful showrooms that service consumers and builders. We have discussed having me solicit custom home builders for them as an independent contractor.
I would appreciate ideas/advice on: marketing to custom builders; expectations on support I should receive from this cabinet business (besides business cards); a typical sales commission percent for this type of contract; how long I can expect this sort of contract to be up and running after initial contacts to home builders.
My background is as an independent residential space planner, CKD, providing design/drafting services to home builders. I have previously been employed by architects. I work from my home office, I love designing kitchens and I need more challenges, as well as additional income.
Thanks in advance for your advice/ideas!
There are several issues here, as I see it from my perspective.
First, your compensation will reflect who is taking on most of the risk, to some extent. Is the contract between the showroom and the builder or between you and the builder? Do you have support staff at the showroom, meaning someone who will write up the order, interact with the builder, collect payments and check the acknowledgement? Who is doing what? There is no “should” here, unless the showroom has opinions on who does what.
I don’t understand the question, “How long can I expect this sort of contract to be up and running, after initial contacts to homebuilders?” What do you mean by that exactly?
I have marketed to custom builders before and I have found that a wonderful e-mail does not always work. The way I’ve done it is to simply show up at job sites, find out who the builder is, and approach the builder right then and there, hopefully with manufacturers’ catalogs in hand to give to the builders, business cards and a book of your company’s work…that’s a big part of your credibility, especially for higher-end builders.
I think the pictures say it all. They’re always busy (like us) and sometimes the direct and personal approach is really worth pursuing.
Thanks, Susan. To answer your questions: The cabinet sales contract would be between the builder and the showroom. My risks would be the amount of time I’d need to spend to develop relationships with custom builders in order to sell them the contract. It may take several visits to the builder before they even want me to price out a kitchen for them.
After getting the builder to consider working with me, I’d meet with the prospective homeowner to discuss their goals and desires for the kitchen. Then I’d design a layout of the kitchen, specifying the cabinet components, wood species/door style and tops. The showroom would be responsible for taking these kitchen drawings (of my layout or another designer’s layout) and prepare a proposal contract on their 20/20 system, including drawings, pricing, delivery, etc. I present the contract to homeowners, then builders and do the revisions as necessary.
Once I get the contract signed, my job is complete. I move on to the next sale; the showroom handles ordering, delivery and follow up.
How long do you think it would take to develop relationships with builders, to earn their trust enough for them to consider buying cabinets/tops from me? It seems to me it will take time to go out to job sites, maybe a few times, before the builders will consider working with someone new. By “up and running” I mean actually getting contracts signed, on a weekly basis, repeat business and repeat sales commissions.
This is a good topic, I hope others will weigh in.
Okay, so it looks like you’re doing the selling on the front end, the back end, the design, and the showroom is doing everything else, including converting it into 20/20 and making all the drawings for purposes of the contract and writing up the contract. I’m thinking 5% to 7% of the cabinet sale would be appropriate. I see the showroom with nearly all of the risk/responsibilities. But, if you can sell project after project, there is money to be made.
If you’re a strong, direct seller, especially with builders, that is good because they like “direct,” at least around here. Just say, “Try me, you won’t be disappointed!” I think you have to be like, “Come on, let’s go, I’d love to work with you and you'll have no worries.” Telling them you’re a CKD is important. I really believe that it is literally just out there for the asking and you can’t be shy.
I think some builders are not necessarily loyal, which is both to your advantage and not to your advantage, meaning I think they would probably give you a chance pretty easily. But, then you have to give them lots of service to keep their loyalty. And, of course, keep contacting them or find reasons to show and tell them something new, to get one to give you a kitchen.
It depends on the market where you are working. When I worked as a road salesperson, I handled the area and called on builders in the vacation home market. I rarely met with the homeowner. I would stop at the builder’s office, pick up the blueprints, and measure and order the cabinets. My boss had to invest all of the door samples in the builder’s office. It was very lucrative as I had four accounts that were building more than 50 homes per year.
If you are calling on the custom home builder, there will be a lot more work involved. You will have to do all of the above plus work with the builder’s clients. What you will have to watch out for in this market is that the builder will probably want a percent put on for him. You may go through all of this only to have the client shop at one of the home centers to price shop. Loyalty will be important between you and the builder.
Thanks, everyone. I really appreciate your input.
The sales commission percent is much lower than mentioned earlier – actually it’s so low that I’m not sure I should invest my time representing this company.
What do you all think of 3% commission on sales of materials (and installation, if they choose it.) Remember, I will be building a new clientele of custom home builders and providing a design layout or builder’s plans to the in-house designer, for them to complete 20/20 plans and proposal. So, I’d be out in the field a lot.
Also, no benefits, start-up expenses or base pay. Is this common practice? I’ve worked as a subcontractor for years without these benefits, though. I’ve been paid either a flat fee for a specified number of drawings or an hourly rate for design services. Sales commission is an entirely new ball game to me!
Doing the math roughly…new business probably equals $150,000-$500,000 builder sales first year x 3% = $4,500 – $15,000. I’m not sure this is such a great deal for you, unless the business is established enough in the other two locations to generate much more business.
I would ask how much builder business was generated last year by the other two locations and know that with a new location, it will be less going forward.
Good point! What do you expect your sales to be? As Susan shows, it’s really important to project that forward and if you do decide to do it, to maybe give it a certain period of time, one to three months, to see if it makes sense. What are you thinking now? Can you just bring in the business and have the showroom take care of the work and you would just be the front person? This way you could cover more territory.
After much thought and number crunching, I will pursue other options, which are more in line with providing design services to consumers, rather than focusing on relationship building with home builders. It’s been a tough decision, since I personally liked the business manager and thought we’d have a good working relationship, but it’s not really the direction I’d like to go in right now and the sales percent seemed too low.
Thanks for your advice. This has been quite an experience for me to be able to converse with other designers who “have been there, done that!”
MASTER CABINET CHECKLIST
I would like this to be a continuing thread on creating a master checklist of issues that must be considered before we enter, or finalize, a cabinet order. This would be invaluable not only for ourselves, but for newbies to our business, to avoid costly mistakes. I’m thinking of segmenting the issues into categories such as the following:
- Cabinet Dimensions
- Cabinet Interior Options (what to check and why)
- Cabinet Fit Around Room Elements
- Ventilation Checklist
- Appliance Checklist
- Appliance Fit Checklist
- Construction Checklist
- Contract Checklist
An example of a later post on this thread, if I catch an error might be something like this:
- Cabinet Fit: Note crown molding flare dimension and window casing location to avoid collision.
Also note the thickness of door/window casing projections, especially if it involves very thick casings.
- Appliance Fit Checklist: Note door swing on plan to avoid collisions.
When you have caught an error, or just want to share your wisdom, please do. This is a huge piece, to maintain accuracy and ultimately profits, and is something we can work on together to create something of great importance to our business. I still forget small, yet very critical, details.
So, make your own category title, or use one above, and write down your tips, your “saves,” etc. and eventually this will be made into a formal list that will have a special spot on the site.
You can include a comprehensive listing of any given category if you have a little time to share with us, or you can just throw in a few gems of details on the run of what to look out for under any given topic. Images of examples are welcome, too.
One thing that I’ve recently created for my company was a Natural Wood Disclaimer. Just this past year alone, I’ve had multiple jobs where the client was unhappy with the wood grain and claimed that it wasn’t what they picked out in the showroom. Hickory is the biggest culprit, but oak is a close second.
So now, with every job that is a natural or light-stained wood, we require the client to read and sign the disclaimer. As long as the client is aware that wood is a natural product and that we cannot control wood grain and color, this should be a non-issue.
I also no longer order granite based on our samples. Instead, we require clients to view and tag their own slabs from a slab yard (unless it’s a super uniform color like Crystal Gold or New Caledonia).
If I’ve learned anything in the four or so years in this industry, it’s that the more you educate your client, the better chance you’ll have at a smooth project.
I think this is a great idea! What a wonderful tool for everyone.
Are you envisioning this list as a “basic” or “starter” list, or more advanced? Maybe this should include the NKBA guidelines?
Do you have any information yet? Just a couple of quick thoughts I had on the following:
- Cabinet Fit: Note crown molding flare dimension and window casing location to avoid collision. Note thickness of door/window casing projection, especially if very thick casings.
- Windows: Look not only at the trim and casing, but also at the sill. Watch how far it protrudes. If it is on an adjacent wall from cabinets and/or appliances, you should make sure you have enough clearance to open doors and drawers without banging into the sill or trim.
- Window and Door Treatments: If windows are installed outside the framing, how far does the treatment and/or hardware extend and have you considered this? This is especially important if there is a “stack” required for the blinds or drapes. In many cases, the patio doors have vertical blinds and, in some applications, the “stack” can be huge – 24"+. (The “stack” is what direction the blinds go when they are opened – to the left, right or split.)
- Cabinet Hardware: Have you checked if the hardware will fit on the doors and drawers? Some of the more intricate or detailed doors or drawer headers don’t have much room for hardware (especially with applied moudlings). I also like to order one or two extra of each hardware.
This can be helpful if a) you miscount b) one gets lost or damaged c) you want to give it to the customers in the final customer care kit so in the future they will have an extra (they’ll probably never need it, but it sure leaves a good impression that you’re thinking about their future) d) you want to add something extra to your “selection” of hardware on hand so that customers can touch and see the real thing (most of us don’t have every hardware style to sample for the customer and have to order one if the customer wants to see the real deal).
Wow, this is something that could go on forever and ever. I’m sure I’ll be back to see the progress and to add more information in future postings!
Thanks to all the participants of this forum for all the useful help, information and support.
Good topic! Does anyone have any forms that they could share to show how they capture all of their information?
I’m adding this to my list…just saw this in a current installation. Next to a Sub-Zero, if doing 3/4" or other pilasters, begin them an inch beyond each side of the Sub-Zero, having plain stock between the start of a pilaster and the Sub-Zero, so when the door opens, it doesn’t bind on the pilaster.
That is certainly a big issue. The doors still open beyond 90 degrees, but not a whole lot more.
I like to order some extra hinges (especially full-overlay face-frame) for the client to stash away for a later time when they might need them. I also like to order some extra drawer slides. An extra touchup kit is a good idea, as well, since the installer always uses the free one up when he’s working on the project. Stain and finish by the pint are also helpful for the installer.
When figuring mouldings I typically add 6" for each turn for cutting waste. If the moulding is large, I make it 8".
As to clearances that can trip you up, such as door and window casings, I draw them in on the elevations. That way they can’t be forgotten.
Digital photos of the existing mouldings in a room or adjacent rooms are always helpful when you are planning mouldings to conform to a home’s style.
I also take pictures of all furnace vents and light switches [so that I have a comprehensive overview.]
I haven’t been to this site in a while but I just came across this thread, and I hope it’s not too late to continue it.
I’ve had two checklists that I’ve been using for almost two years now and this has really been a time and money saver for each project.
The first checklist is an order checklist that includes a lot of the points made on the list that was posted. I check the appliance openings and swings, and pretty easy stuff to miss – stupid stuff like making sure any cabinets that sit on the counter ends up at the same height as the wall cabinets, or checking that I specified finished sides at appliance openings (like the cabinet sides at European dishwasher opening), or that I added up the wall cabinet run with base cabinet run.
When you are deep into writing a detailed order, these are the things that bite you three months later when the cabinets are delivered!
The second checklist is a drawing checklist. We found that if the designer’s details don’t translate from order to drawings, than the installations are much more difficult. I also do full-scale moulding details, calling out the projections, and making sure things like the pot filler location and microwave outlet are called out, as well.
I even do a typical side view checklist. It makes sure I’ve noted any variation in the floor/ceiling height, the thickness of the stone, the height of the backsplash, etc.
The best part of this is that, when I get my order acknowledgments, I hand off the checklists, order and drawings and I have another set of eyes go through it again…and yes, occasionally they will find a goof-up, either on the factory’s part or mine. But at least it’s a checks and balances system this way.
I hope this helps.
CABINET REP ETHICS
I recently found out that my cabinet rep is now my competitor. His son had been installing my cabinets for six years and we recently parted ways. I just found out that his father has set him up with his cabinet line. He does not have a showroom and is selling out of his truck.
I spent money on my displays and door samples along with co-op advertising with this cabinet line. I feel that this is as unethical as it gets. He knows my customer base, so he can have instant business without any start-up cost.
I’m not a vengeful person but I feel I must do what I have to do to protect myself. If I contact the company, I feel that the rep could get fired. At this point, though, I feel that I’m going to do this anyway and let him suffer the consequences.
I should also point out that I have asked him in the past if he was doing this, and he denied it.
This is a tough call. I would not want to be the one who gets him fired. Before you take that last step, you might consider sending a letter via certified mail telling him if he continues, then you will contact the manufacturer.
I understand how upset you are. I would make a call to the company, or have a friend/employee call to inquire about what is needed to become a dealer for that manufacturer.
Do you need displays? Do you get different pricing if you have displays? See what that brings…so when you do write to the manufacturer, you have “bullets for the gun.”
This situation depends on if you have any contract with the rep and/or cabinet manufacturer for a protected area, or if there is any language in the agreement covering not having other dealers within a certain radius. If you don’t have anything like this, then the guy is unethical, but you probably don’t have much recourse, except to possibly get him into trouble with the manufacturer. You have a right to be very upset either way, and the manufacturer should be contacted whether he has the potential of getting fired or not. It’s your investment at risk here, and you have a right to protect that.
There is no question this is unethical. I advise doing some fact checking before you report it.
The points you need to cover:
A) What are the manufacturer’s requirements to be a dealer?
B) Does the manufacturer protect dealer territories?
C) Is he listed on the manufacturer’s Website as a dealer? Is he in your territory?
D) Does he have his own Website?
The cabinet manufacturer should be informed of this conflict of interest if indeed it is a true conflict. Do some checking. Have a friend call the son who is selling your line and have him ask some basic questions about getting an estimate. I would also have a friend e-mail the manufacturer to be referred to a dealer in your zip code or territory and see if your company pops up as a dealer.
I am not sure that I see the ethical problem with what has been described. Does your showroom have exclusive rights to the line of cabinets? If not, wouldn’t this just be a case of competition entering the marketplace?
If you have used this installer for six years, I assume his work must be of high quality. If he went through the proper steps to obtain his dealer account and samples, then he is just a motivated installer striking out on his own.
If he did not go through the proper channels, I’m sure that this example will be a reflection of his business practices and that he will not be competition for very long.
I had a similar thing happen to me a few years ago: My factory rep and I butted heads at our local NKBA chapter concerning chapter business. As retribution, he went down the street to my competitor and set them up with the same cabinet line.
It took a year for me to find out, then I threw a huge fit with the company (the line was my primary product and my competitor’s third or fourth). Luckily, I was buying a significant amount of cabinets, and the competitor was high-maintenance who wasn’t buying much, so they took it away from the other guys.
The rep was fired a few months later. It turns out this wasn’t the only ethics issue they uncovered about the guy.
I believe this is an ethics issue. He is still your rep. Signing up his son is a conflict of interest. Usually my reps discuss potential new dealers before signing them up. What was this guy thinking?
Did you part ways with the son on good terms? As a rep, he could’ve helped his son get a number of different lines. This seems to me like revenge.
I bet the rep is hoping you’ll get mad enough to drop the line. If it were me, I would contact the manufacturer to discuss the issue as it has jeopardized the relationship between the rep and yourself.
Kompy, I did part ways with his son because he had ethics issues of his own. I would have him do jobs and find out later that he would do extra work and get paid directly from my customers for extra work. He later decided to hire apprentices to do the work on my jobs while he would go hunting. None of this was good for my business, which is why I had to make the change.
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