Buying Bonanza

Buying Bonanza

Kitchen and bath dealers are continuing to invest in new products lines, technology, equipment and their showrooms, a new K&BDN survey reports.

By Janice Anne Costa

Kitchen and bath dealers, like the rest of the population, love to buy things. The good news is, with a strong remodeling market continuing to fuel both the kitchen and bath market and the economy as a whole, kitchen and bath dealers are buying more than ever, with a great many planning to add new product lines, upgrade technology and equipment and increase the size of their showrooms in the coming year.

 

The findings spoke positively about both the economy and the confidence level of kitchen and bath dealers, the majority of whom noted plans to increase the number of product lines they carry in 2003. Likewise, more than half of dealers surveyed said they expect to add to their equipment in the coming year, while an appreciable number also noted plans to expand on their showroom space for 2003.

The number of product lines carried by kitchen and bath dealers is clearly on the rise. In fact, survey respondents said they expect to carry an average of 9.9 kitchen product lines in 2003, compared to only 9.1 carried in 2002.

Likewise, kitchen and bath dealers said they carried an average of 7.8 bath product lines in 2002, but plan to carry an average of 8.7 bath product lines in 2003.

Additionally, when adding new product lines, more than half (57.9%) of all survey respondents said they would add a desired product line outright, rather than substitute it for an existing product line (see Graph 3). As one dealer explained it, "Diverse offerings are part of what fuel growth. There are a lot of people out there who want product, and you have to be able to meet their [diverse product] needs, or someone else will."

The majority of dealers said they purchase products direct from manufacturers (80%), but a good number also utilize distributors/"whotailers" (33.8%), and a small amount supplement their product purchasing by going to lumber yards or other retail outlets (2.8%), home centers (2.1%) or other sources (3.4%), the survey showed (see Graph 1).

 

The large majority of dealer respondents (82.1%) said they did not intend to significantly change these sources of supply in 2003, though 6.9% did plan changes their supply sources, while another 11% was unsure whether they would be changing their supply sources.

While buying groups still comprise a relatively small percent of the dealer market, some 13.8% of dealers surveyed said they are currently a member of a buying group, and several commented that this has opened new doors to them in terms of product discounts and opportunities.

Interestingly, when asked whether they intend to join a buying group in the future, a whopping 45.3% of survey respondents said they were unsure, suggesting that this is an area where dealer education about buying groups would be beneficial to the industry.


 

Indeed, the Internet is clearly an area where dealers are focusing their attention, with more than three-quarters (75.2%) of dealers surveyed saying they currently use the Internet to visit manufacturers' Web sites in order to research or buy products they are specifying for their clients.

"The specs change so fast, you really can't live without it," explained one dealer, who, as a self-proclaimed Internet addict, sees manufacturers' Web sites as "the ultimate research tool for consumers and designers."

Quality Counts

"Accurate and timely deliveries" was rated the second-highest priority, scoring an impressive 4.7 out of 5, followed by "supplier service/support" (4.5 out of 5), "product availability" (4.4 out of 5), "profit margin" (4.3 out of 5) and "product features" (4.2 out of 5).

While "price" was rated more toward the middle of the pack (coming in seventh out of 15 items rated, with a 4.1 out of 5), many dealers noted that price only becomes key once quality is there. As one dealer explained it, "If the quality isn't there, price is irrelevant. Why would you expect a client to be happy with a poor-quality product, even if it is well priced? Quality is always the best bargain."

 



Showroom Stats

"The full displays are key because they allow you to create an actual kitchen or bath environment that people can visualize in their homes," a Northwest-based dealer said. "The vignettes, on the other hand, allow you to showcase more variety. I place my full kitchens strategically around the showroom, with my 'live' kitchen as the centerpiece."

Survey respondents were quite vocal about the importance of having a good number of quality displays. To that end, a full 20.7% said they are expecting to increase their showroom space in 2003 (see Graph 6). Additionally, another 10.3% are considering increasing their showroom space this year.

 

Indeed, it seems that kitchen and bath dealers and designers are quite willing to invest in themselves and their futures in order to see continued growth, according to survey responses.

"We view investments in new products and technology as key to our growth," explained a dealer with several satellite showrooms. "The remodeling market is strong, and so many people have bought homes in the past year, we can't see that changing. If we want to get that business, we have to spend the money so we're prepared. That means staff, equipment, the Web site...and, of course, products. You have to have high-quality products, and a good selection of them."

As another dealer concluded, "There's no way around it. Things change fast in this industry either you're part of that, or you're history." KBDN
 

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