Expanding the variety of products and manufacturers you represent will lead to increased sales and higher gross profit margins.



Sales grow very nicely and margins grow dramatically when a showroom shows and sells a greater variety of product. This includes the basic core products of faucets, lavs, water closets, tubs and whirlpools - plus adding other products that are used in the bath and kitchen.

More times than not, when I do a consulting job with a plumbing wholesaler I find nicely done showrooms with hard-working, professional salespeople - but the products being shown and sold in the showroom are from traditional wholesale manufacturers: Kohler, American Standard, Eljer, Elkay, Delta, Moen, Price Pfister and the like. These are well-known, well-accepted and proven products, but everyone has them. Unfortunately, because of this proliferation and a history of "prostituted" pricing, it's very difficult for anyone to make very good margins with these products.

If they're being sold in bulk and straight from the wholesale warehouse to the plumber's shop or a multi-unit jobsite, the wholesaler has learned to survive with gross profit margins of 20% (+/-). Great products with great services deserve better. The industry has adjusted to the situation by learning to run better businesses, joining buying groups and negotiating "extras."

Showrooms are higher cost operations and therefore have to earn a higher margin on sell. If you can't do this selling primarily the "traditional" wholesaler products, then other products need to be mixed in.

More choices

In the past 20 years the decorative plumbing and hardware products and vendors have grown tremendously. When I started my business in the early 80's there were four main suppliers of decorative faucets: Broadway, Artistic Brass, Sheryl Wagner and Phylrich. Two are virtually gone, one is struggling and one is still a major player. But today there must be 30 manufacturers/assemblers of decorative faucets. Many of these suppliers offer their products at 50/10/10 cost discounts (a .405 multiplier). That's significantly better than most of the "traditional" wholesale suppliers. Plus many of these smaller decorative faucet manufacturers may offer exclusive or semi-exclusive partnerships, meaning you could be the only player in town vs. being one of several.

I'm not suggesting that a wholesaler drop the Delta, Moen, Price Pfister, Kohler, American Standard, etc., faucet lines. But I would encourage them to select two or three alternative sources. Offer your clients the full range of styles and finishes that are available. These products shouldn't be sold at deep discounts. It's okay to make 40-50% gross profit.

The sources on vitreous china products are more limited. However, there are some wonderfully designed water closets, bidets, and lavs being made by "non-traditional" manufacturers.They also can be purchased at longer discounts - allowing you to make better margins.

Do you show and sell bidets? The bidet is a terrific hygienic plumbing fixture that has several uses for men and women. A bidet with the appropriate decorative valve may be a $500-$1000 add-on sale. You should not give the same deep discount you have to on the more standard products. Don't be afraid to mix up the discounts and make more money.

Hopefully many of you have the opportunity of visiting the national Kitchen and Bath Industry Show (K/BIS) each year. While 20 years ago it was 90% kitchen cabinets and appliances, today it's 70% decorative plumbing, hardware and bathroom furniture. Use this great exhibition to select items to complement your product offerings. You need a mix of the better-known traditional products and the lesser-known, but still fine quality, shorter line of faucets and fixtures.

Whirlpool/jetted tubs are popular and probably the biggest ticket item in most bathrooms. But don't show just the traditional line. Select one or two other manufacturers that have a great selection of styles, shapes, sizes and colors. Choose companies whose buy discount is longer and who will give you a semi-exclusive display/sell arrangement. Buy deep and sell shallow!

How about bath accessories? Too many wholesalers don't take these products seriously. The homeowner wants - and is demanding - that the style and finish of these products match the faucets, and is willing to pay big bucks to tie it all together. An average master bath could easily have $500 - $1000 worth of bath accessories. Don't discount them. Sell at list or close to it. They aren't "shopped" like the other products and not everyone sells them.

At my business we sold a lot of door and cabinet hardware. The array of decorative products is tremendous. Your margins will be 40% or more if you don't fall into the wholesale mentality that everything has to have a deep discount. Be known as the best showroom/sales outlet for these products.

Bathroom furniture - fine furniture has become a big item. Not the "big box" vanity, but great combinations of vanities, side storage units, mirrors and medicine cabinets. Many styles are offered from Early American to European Contemporary. These are big-ticket items and you can make furniture store margins. Check it out!

How about medicine cabinets? These also have grown in variety, style and quality. Every bathroom has them - shouldn't you be getting the sale?

Don't be content selling just fixtures and faucets. Develop a "one-stop shopping" marketing strategy. Do everything you can to attract clients to your showroom. Then when they come through the front door, don't let them out until they've bought every single thing they'll need to put together that dream bath or kitchen.

More and more showrooms are getting into the full kitchen business - cabinets, appliances, countertops - the full package. It's a different business. It's a difficult business! But it can be a very profitable business as well. Do the "big boxes" show and sell the total package? You bet they do! So why shouldn't you carve out a niche on the high-end scale and expand your product offerings? More sales and more profits equal a greater return on your investment.

Do you show and sell towel warmers? How about steam and sauna units? You won't sell a lot of them, but they don't take up much display room, require very little investment and they do offer the opportunity to grow sales and margins.

Some creative and innovative folks have added tile and lighting and flooring. One of the best showroom designers in the USA encourages his clients to show and sell soft goods: towels, soaps, etc. They help accessorize the showroom, take up very little space, are sold right out of the showroom and add dollars to the bottom line.

The bottom line is: If you show and sell only the "traditional" wholesaler products, the best you can hope for will be margins ranging from 25-30% (if that)! But if you will diversify the products and manufacturers you represent, you can only grow sales (increasing sales per employee) and you can achieve gross profit margins of 35-40% (and more)! I know when I invested half a million dollars in each of my showrooms that I wanted to achieve the absolute greatest return on that investment possible. Shouldn't you do the same?