There's a trend starting to take shape in the showroom industry and I believe it's a good one. More and more wholesalers are starting to use a different name for their showroom businesses and many are relocating their showrooms to more customer friendly, retail oriented locations.
Good name selection is important. Names like: The Galleria Bath and Kitchen, Southern Bath and Kitchen, The Creative Bath, and The Decorative Bath offer great advantages because:
- 1. The name tells people what the business is (bath and kitchen oriented).
2. It allows the business to advertise and promote itself to everyone (homeowners, home builders, designers, architects, etc.).
3. Possibly most importantly, it separates the showroom business from the wholesale side - which makes it less threatening to the plumber.
Let's talk a little more about #3. When the showroom is located off-site, away from the wholesale business, and it has a different name, it's not as direct or obvious. Sure, the plumber will know that ABC Bath and Kitchen is located in the shopping strip down the street and that it's part of XYZ Wholesale Co. But at least the consumers aren't taking up his parking spot at the counter or seen loading product into their cars.
The hard cold facts are that the plumber has lost, or is rapidly losing, the buy-sell of higher end plumbing fixtures.
As I travel the United States and Canada working with wholesalers and their showroom businesses it's obvious that in most areas either the homeowner or the custom home builder is making the buying decision and writing the check for the product. The plumber does the rough plumbing and installs the product.
Really, this shouldn't come as any surprise because the plumbing contractors made the conscious (in some cases unconscious) decision to not contribute anything to the process. They wouldn't invest in a showroom, they didn't have trained salespeople to spend hours working with homeowners, they wouldn't invest in the inventories, etc., etc.
For a long time I didn't understand why the plumber wouldn't take advantage of this wonderful revenue opportunity. Then one day a really good friend of mine (a plumbing customer of my showroom business) explained to me that plumbing is a trade, a hands-on hard working trade. It requires brains and skill, but dressing up and “selling” fancy products isn't why plumbers become plumbers. Bang - I understand!
But, I also knew that there was no free lunch: you have to do something to earn something. And as far as showrooms are concerned, the plumbers add no value to the buy-sell process so they aren't entitled to make any money in the process.
Yes, I know some would argue that “they send” their customers into the showroom. Well, that's nice and I appreciate it, but, showrooms refer the plumbers to builders and homeowners so that evens it out. If (a BIG “if”) a plumber is truly loyal to my showroom and refers a lot of business to me, I'd consider extending a better price on products purchased. Or, I might even develop a nominal (no more than 5-7%) rebate or referral fee. Basically I don't like these because of administrative hassle - but I would try and show my appreciation for a good loyal customer in some concrete, monetary fashion.
I'm finding that many, and I mean many, plumbers have accepted the fact that they have lost out on the buy-sell process of high end products. But, they can add a mark-up (10% +/- of the value of the product) to the cost of installation. As long as they don't price themselves out of the market, this is fine. My long-term guess would be that this will go away also. (Remember the “no free lunch” saying).
So, those of you who are still out there trying to “protect” the plumber keep in mind that it's only a matter of time before the “wave” of selling showroom products direct to anyone hits your area. Will you be the leaders and the first to be proactive in your area? Or will you wait until the competitor across the street makes the bold move? Playing catch-up is a lot harder that being the leader.
Just one more fact to help make my point: not too many years ago the electrician supplied all - that's 100% - of the lighting fixtures to custom homes. Today they supply none! That's 0%. They wouldn't do showrooms, they didn't want to do the selling job, etc., etc. In my opinion it won't be that many years before plumber participation is “0.” I don't particularly like it, but it is what it is!
Back to the idea of putting a different name on the showroom business. I wouldn't be opposed to having the name of the wholesaler on the sign, quote, letterhead etc. Here's an example:
ABC Kitchen and Bath Showroom
A division of XYZ Wholesale
Everyone likes to buy, or at least think he or she is buying, at wholesale prices. The above example would give this perception. Or when the subject of pricing comes up in the showroom, the salesperson would say “of course we'll extend to you our very competitive prices since we are a division of XYZ Wholesale.”
Okay, your current Showroom is located at one end of the wholesale business. It's in an older, industrial area. Folks coming to the Showroom have to drive over the railroad tracks to get there. The parking lot isn't very well lit. Parking spots are tough to find because the tradespeople are there also. You're getting it: the location doesn't look or feel very consumer friendly. Get in your car and do a market study of more desirable locations. Sure the rent will be more, but you're also going to be attracting a lot more homeowner business at 40% gross profit. This will more than cover the additional rent. Better yet, if you're the owner of the wholesale business, buy the more desirable showroom location and have the company lease it from you. That's a win-win situation.
In doing your market research for a more friendly location for your showroom, here are some things to be looking for:
- 1. Are there other related products or stores close by? (Tile, granite, kitchen cabinets, appliances, lighting fixtures, etc.)
2. Where is your competition located?
3. Where is most of the custom home building taking place?
4. Where are the higher end, older homes located (thinking of remodeling)?
5. How's the parking?
6. Is the parking lot well lit?
7. Are there awnings or overhangs for rainy days?
8. Is the space the right size for now and the future?
9. Are there windows for displaying product?
10. Is the location easy to find and accessible?
We've all heard the saying “location, location, location.” A great location is what you want to ensure the success of a retail oriented business. Allow me to share my personal experience on the subject. The first showroom we did was located on a very busy eight-lane highway. Over 160,000 commuters passed by our business every day. When we asked folks how they heard about us, it was “referral” first and “saw your showroom from the freeway” second. Our second showroom was in an older shopping strip that maybe had 200 cars passing by daily. When we asked the same question there, very few people said they saw us from the street. Guess which one I had to spend a whole lot more money advertising to attract clients to our store?
As I've stated so many times before in this space, showrooms are an all new/different type of business. Wholesale and retail are as different as night and day. It's an all new learning experience - and the business name and location are a big part of it! <<
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