Every three years, SUPPLY HOUSE TIMES commissions a market research study with the goal of learning more about wholesaler showrooms.
The overall purpose of the study is to gather the most up-to-date information on wholesaler showrooms: their background, personnel and management status; merchandising and sales strategies; and sales and profit performance.
This year, the target audience was 2,000 active, qualified SUPPLY HOUSE TIMES subscribers whose firms are engaged in plumbing wholesale. The survey was addressed to various members of the management team. Out of 2,000 surveys sent out, 439 usable returns were received (a 22% response rate). Of the 439 responses, 158 (36%) indicated they operate one or more showrooms.
This is the only survey of its type, and I applaud SUPPLY HOUSE TIMES for investing the time, energy and money into this valuable tool. If you are in the showroom business, this is the only benchmark information you have that enables you to compare your operation with others in your industry.
For the past four surveys, I have been part of the analysis of the results and a contributor editorially. For those of you who have read my articles over the past years, you know that I have an incredible passion for the showroom side of the business, and that I'm pretty opinionated and verbal on how showrooms should be run.
In past surveys, only some of the survey results have been shared with SUPPLY HOUSE TIMES readers. This was partially due to space constraints and partially due to perceived interest. However, this year I have asked my editors to allow me to break the survey results into a two-part article. Part One will include virtually all of the information compiled. Part Two will allow me to make comments and comparisons from previous surveys on what I consider to be the most important points. I'll share trends, and even venture a look into the future.
I love doing this survey. It's particularly rewarding to see the wholesalers finally embracing the concept of showrooms and making them an integral part of their future long-term business strategies.
There were more than 40 questions in the survey. Not all folks responded to all questions - so at the end of the question, I'll show the number of responses to each question in parenthesis. Due to the length of the survey and the space available for this article, a few of the questions will be skipped. Following are the questions and answers:
Yes = 36%
No = 64%
2. What is your firm's annual sales volume? (360)
$1,000,000 or less = 19%
$1,000,001 - 5,000,000 = 28%
$5,000,001 - 16,999,999 = 24%
$17,000,000 - 99,999,999 = 23%
More than $100,000,000 = 6%
(Mean Average: $26,127,458)
3. In which state is your firm headquartered? (439)
These answers were pretty evenly spread out by geographic regions in the United States.
1 or 2 = 52%
2 or 3 = 23%
More than 3 = 25%
4b.What is the size of your showroom(s)? (123 - multiple answers allowed)
Less than 1,000 sq. ft. = 18%
1,000-2,499 sq. ft. = 45%
2,500-4,999 sq. ft. = 29%
5,000 sq. ft. or more = 27%
4c. Where is/are your showrooms located? (72 - multiple answers allowed)
Wholesale facility = 76%
Downtown retail district = 17%
Design center = 8%
Shopping mall = 6%
5. Has your firm opened any new showrooms, remodeled existing showrooms or closed any showrooms in the past two years? (105)
Opened new showrooms = 39%
Remodeled showrooms = 87%
Closed showrooms = 1%
6. What is the average monthly traffic (number of customers) at your largest, most active showroom? (148)
Less than 100 = 30%
100-199 = 23%
200-299 = 21%
300-499 = 17%
500-999 = 6%
1,000 or more = 3%
My firm's personnel = 83%
Manufacturer/Designer = 31%
An independent designer/architect = 19%
8. Do you maintain back-up inventories of merchandise on display? (151)
Yes (on most items) = 68%
Yes (on a few items) = 19%
Yes (on all items) = 9%
No = 4%
9. Which of the following product categories are offered in your showrooms? (153 - multiple answers allowed)
Bath fixtures and brass = 96%
Bath accessories = 90%
Kitchen fixtures and brass = 73%
Decorative hardware = 64%
Bath furniture = 62%
Vanities = 60%
Medicine cabinets = 58%
Steamers & saunas = 55%
Countertops = 48%
Water treatment products = 40%
Kitchen cabinets = 29%
Spas = 26%
Lighting fixtures = 23%
HVAC = 18%
Appliances = 13%
Carded plumbing products = 12%
Tile = 10%
Other = 3%
Number = 1 or 2, Fixtures = 29%, Brass = 12%
Number = 3, Fixtures = 35%, Brass = 12%
Number = 4, Fixtures = 20%, Brass 24%
Number = 5, Fixtures = 4%, Brass = 12%
Number = 6+, Fixtures = 12%, Brass 40%
12. Which price point does your showroom generally target? (139)
Luxury = 10%
Upper Mid-range = 64%
Mid-range = 25%
Low End = 1%
13. Which one type of presentation dominates in your showroom? (138)
Vignettes/Simulated room settings = 41%
Displays provided by manufacturers = 30%
Modular/like products together = 28%
Other = 1%
14. Do you display prices and model numbers on your display products? (152)
Yes = 30%
No = 70%
Manufacturer list = 63%
Contractor price = 20%
Other = 17%
16. What model number do you display on showroom products? (45)
Manufacturer's actual number = 76%
My number = 24%
17. Do you have a showroom manager for your showroom? (150)
Yes = 68%
No = 32%
18. What is the average annual compensation for your showroom manager? (95)
$29,999 or less = 10%
$30,000 - 39,999 = 23%
$40,000 - 49,999 = 20%
$50,000 - 59,999 = 20%
$60,000 - 69,999 = 15%
$70,000 or more = 12%
All full-time = 81%
60/40 full-time/ part-time = 9%
Other = 10%
20. How many sales consultants do you employ in the showroom? (133)
One or less = 18%
Two = 30%
Three = 20%
Four = 19%
Five or more = 13%
21. What is the average annual compensation for full-time showroom salespeople? (124)
$25,999 or less = 16%
$26,000 - 29,999 = 15%
$30,000 - 39,999 = 40%
$40,000 - 49,999 =21%
$50,000 or more = 8%
Combination salary/commission = 54%
Base salary only = 46%
22b. What drives the commission portion? (37)
Gross profit = 59%
Sales and gross profit = 22%
Sales = 14%
Other = 5%
24. In addition to on-the-job training, how do you train showroom salespeople? (140)
Vendor schools = 64%
Formal in-house training programs = 54%
Trade shows/workshops = 51%
Design schools = 17%
Other = 8%
No other way = 10%
25a. Do you do any formal sales skill training? (147)
Yes = 22%
No = 78%
26. Do you sell direct to consumers visiting your showroom? (151)
Yes = 84%
No = 16%
1% - 10% = 16%
11% - 20% = 18%
21% - 30% = 25%
31% - 40% = 14%
41% - 50% = 15%
More than 50% = 12%
(Mean average = 33%)
28. If you sell direct to the consumer, do you offer rebates to their plumbers? (121)
Yes, but only if the installer asks = 40%
Yes, automatically, if we know the installer = 30%
No, we retain the entire profit margin = 30%
29. What price do you charge the consumer? (123)
Less than list, but greater than contractor = 79%
Manufacturer's list = 10%
Contractor's price (or almost) = 9%
Other = 2%
30. Which one of the following is the single most serious competitor for your showroom business? (138)
Home centers/DIY retailers = 53%
Other wholesalers with showrooms = 35%
Dealers on the Internet = 7%
Other = 5%
31. As a percentage of total sales, approximately how much does each of the following contribute to your showroom sales volume? (120)
Plumbing contractors = 34%
Consumers referred by contractors = 18%
Consumers who came in on their own = 16%
Builders = 16%
Remodeling contractors = 9%
Other = 7%
Credit card transactions = 90%
Consumer delivery = 87%
Saturday hours = 68%
Installer referral = 60%
Evening hours = 39%
(Several others to a lesser degree)
33. Do you routinely make sales calls on builders, designers and other professional specifiers? (149)
Yes = 53%
No = 47%
34. What percent of showroom sales is budgeted for all advertising, promotion and public relations activities? (99)
1% = 19%
2% = 12%
3% - 4% = 14%
5% = 21%
6% - 10% = 16%
More than 10% = 18%
(Mean average 9%)
Types of Advertising: Yellow Pages = 73%, Most Effective =11%
Types of Advertising: Newspaper= 53%, Most Effective = 15%
Types of Advertising: Trade/home shows = 49%, Most Effective = 14%
Types of Advertising: In-house events = 40%, Most Effective = 13%
Types of Advertising: Radio = 34%, Most Effective = 9%
Types of Advertising: Direct mail = 32%, Most Effective = 7%
Types of Advertising: Consumer/metro magazine = 31%, Most Effective = 8%
Types of Advertising: Trade magazines = 29%, Most Effective = 1%
Types of Advertising: Television = 27%, Most Effective = 14%
Types of Advertising: E-mail/Web site = 21%, Most Effective = 1%
Types of Advertising: Billboards = 16%, Most Effective = 3%
37. What is the total average monthly sales volume for ALL of your showrooms? (97)
Less than $80,000 a month = 37%
$80,001-300,000 = 36%
$300,000 or more = 27%
38. Estimate your showroom operating costs as a percent of total showroom sales. (76)
Less than 10% = 17%
10% - 19% = 29%
20% - 29% = 36%
30% or more = 18%
Yes = 91%
No = 9%
40. How do you know they're profitable? (143)
We can isolate showroom sales and expenses from the rest of our operations, so we have hard data to prove it = 57%
We cannot fully isolate showroom sales and expenses, but we think showroom income exceeds expenses = 43%
41. Which ONE of the following is the primary reason why you operate a showroom? (137)
Bottom line profitability = 31%
They boost our sales of higher end luxury products = 27%
They enhance our company's image within the local trading area = 22%
They are part of our commitment to our major suppliers = 15%
Other wholesalers in our area are doing showrooms = 5%
42. What needs to be done to improve your showroom's profitability? (137 - multiple answers allowed)
Promote more aggressively to builders, designers, etc. = 67%
Promote more aggressively to consumers = 42%
Improve staff selling techniques through training = 40%
Promote more aggressively to plumbing contractors = 34%
Improve the layout and appearance of the showroom(s) = 28%
Add showroom salespeople = 22%
Increase hours, evenings and weekends = 20%
Increase the amount of product displayed = 20%
Upgrade the product offering to include higher price points = 15%
Engender a greater commitment by top management to the showroom marketing effort = 14%
Discontinue listing prices; match home center prices = 5%
Read Part II of the Showroom Survey in October SUPPLY HOUSE TIMES.
