Whether you're a kitchen and bath dealer who's been in the business for two weeks or 20 years, the issues we all deal with are the same: What products do we want to display and sell from our showrooms?
Today, more than ever before, we have plenty of choices in every category. While years ago we had a choice of two or three faucets, today we have hundreds of varieties.
While buying groups have brought product selection to the forefront of our business, it's still necessary to evaluate the needs of the customers, the staff and the company. All too often I hear dealers say that they have sold a certain cabinet line for 25 years and that is what they are known for in their marketplace. They honestly believe that if they no longer had that product to sell, they would go out of business, or be substantially hurt in the market they serve. There are also kitchen dealers who think that they cannot sell appliances or fixtures because they cannot get the margin that they can get with cabinet sales.
While things have certainly changed in this industry in the last 30 years, one thing has been constant. It's all about profit.
If you cannot be the provider of products that your customers are going to need for the project they are coming to you for, then maybe you should look at a new model. I know of kitchen and bath dealers who have restructured their businesses to include an appliance showroom, decorative bath fixtures and fittings, and full service for whole-house remodeling. They're not just kitchens and baths anymore. I know many remodeling companies that have opened kitchen and bath showrooms because they could not get what they once did from the local distributor.
We have a tremendous influx of competition by way of home centers and retail buying groups. Our industry is being driven by these large companies, firms that we cannot compete against with regard to price.
When I purchased my company many years ago, we handled one specific cabinet line. We sold a few others, but we featured one very specific line. I was told that this was the best cabinet line and the only one we would ever need in order to be successful. As time went on, however, I learned more about the business and found that there were plenty of cabinet lines available to me. They all did have their differences, and that was how I decided what we should carry to be a successful dealer.
Today, we are a full-service company for our clients. We sell about five different cabinet lines, and they are all profit centers for our business and pay me rebates for my purchases.
We also sell appliances. While I realize I cannot make a 40% or better margin of profit selling them, I do realize a 20% to 25% profit or more on some select appliances or plumbing fixtures.
Part of selling the kitchen, I think, is to be able to have total involvement with the appliances. This includes learning about the appliance the customers will purchase, as well as having some input as to what you think is best for them. After all, you are their designer.
When I consider what happens when someone else sells the appliance instead of me, I think I am miles and dollars ahead by providing the appliance package. I have, all too often, been the one who ordered and paid for the new wood panel fronts because the specs I was given were incorrect. I have, all too often, been the one who ordered and paid for a new oven cabinet or paid for the installer to go out and redo a cutout in a cabinet because the specs given me were incorrect. I have, all too often, been the one who had the money held out because the appliance we installed that was supplied by the homeowner did not work and they were told it must be something we did during the installation.
By selling the appliances, we have 100% control of the job. I don't have to wait until we are on the job or wrapping up to discover that someone else has made a mistake. I make enough mistakes on my own; I don't need to deal with someone else who makes a mistake - especially when I'm not making any money on the item in question.
Something that I discovered when I decided to change cabinet lines that had been with the company when I purchased it was that I did not lose the sales I was told I would lose. Friends of mine have shared the same experience. I think we are made to believe that it's the cabinet or product line that drives the customer into our showrooms and makes the sale for us. I can assure you that is not true. If that is true, then you are doing something wrong in your sales approach to your customers and with your product selections.
Have you ever had a customer ask you what cabinet lines you carry? Do you give them the answer, or do you ask them what they are familiar with? When I am asked that question, I ask them if they are looking for something in particular. Generally, they will say they saw a product somewhere else and just wanted to know. If you ask if that's the product they want, they will generally say "not really, we just wanted to see what else is available." The same is true for fixtures, appliances, lighting and flooring. Seldom does a customer ever ask for a specific brand name.
That being the case, maybe it's time for you to look at your product selection. With the amount of new products and the variation of quality and price, you should be able to hand select the products that will bring you the greatest return on your investment.
Many products today are available through direct distribution through the manufacturer. While some products are still purchased by way of a distributor, it is the best product at the best quality for the best return that you should be looking for.
Home Center Concerns
You do not need to sell the same cabinet the local home center is selling. While some dealers think this is a good thing for them, why would you want to be the same as you competitor? Often I hear dealers speak of how much better we are than the home centers; we are more professional, we work harder for our customers, we bring more to the table. Then why try to compete with them by selling the same cabinet or fixture line that they sell? We should want to be as different as possible.
It's a proven statistic that the decision of buying is not based on price alone. In fact, price is near the bottom of the reasons for a positive buying decision. Professionalism, show of concern for the homeowner and hard work are at the top of reasons to buy.
We try to not sell what a customer can get at the local home center for two reasons: We want to differentiate ourselves from them, and we want to make more money. The home centers will set the price, and unless you want to tell the customer that the home centers don't know what they're doing, I would suggest not to even be put in that position. I would rather price the like products that will satisfy the customer and make me more money.
The home centers also work from huge rebate for the large volume of business they give the manufacturers. Can your dealership qualify for those rebates? It has only been through the buying group that I have been able to participate in the rebates that the big boys have been getting for many years.
Take a good hard look at your company, consider why you sell what you sell, and ask yourself if, in fact, you are really getting your fair share of the profits. While you may think you are, the truth is that there is more money left on the table by kitchen and bath dealers who remain as independent dealers. Joining a buying group will give you clout and rebates that you will never see by yourself.
In addition, the buying group's educational seminars and the learning experiences that you have as a member have no price tag on them. This is all a part of belonging to a group of your peers - to learn and earn your lion's share of the business you are in.
Gerald C. "Jerry Johnson," CKD, CBD of Cameron Kitchen & Bath Designs, started working in the kitchen and bath industry in 1971 at Kitchens by Cameron in the New Orleans area, a firm he purchased in 1980. In 1983 Johnson