I’ve resisted doing this for the past several months - but my level of frustration has risen to the point that I’ve just got to vent! My frustration is mainly directed toward the owners and managers of showrooms - hence the title of this article. If you’re a showroom sales consultant and read this, please tear it out and forward it to your bosses. If you dare, you might even highlight/underline any segments that hit home with you.

So you’re saying: Okay, Darlington, what’s the frustration? As many of you know, I teach a couple of all-day workshops. One is on basic business management and the other is on showroom selling skills. I’m also privileged to do quite a bit of consulting to wholesalers that operate showrooms. The following explains why my frustration runneth over:

In the past and through the present day owners continue to spend a lot of money building out showrooms - but they haven’t made a commitment to learn how to run them. Regardless of whether or not your main customer base (who the invoice is written to) is the plumber, the showroom business is much more retail-oriented than wholesale. It’s an all-new business model. Please, do whatever you have to do to learn more about how to operate a successful retail business.

Too many owners invest big bucks to get into the showroom business but don’t treat the showroom as a profit center. They don’t know for sure whether or not that segment of the business really makes money. I’ll bet if these same owners invested the same amount of money into real estate or the stock market (although right now that’s iffy) they’d know exactly how that investment was doing. So, why the heck don’t you develop a profit and loss statement for the showroom? Some of you would find out you’re not making any money and then you could do something about it. Please treat this investment the same as you do other investments.

Too many of you have gotten into the showroom business without communicating to all your employees why you did it, why it’s important to the overall business and why the wholesale side and the retail side have to work together. I see showrooms doing quotes that end up in the plumber’s hand who then goes to the outside wholesale person or the counter and the pricing gets changed to wholesale pricing. In addition, the order doesn’t get credited to the showroom salesperson. You, the bosses, have to bring the wholesale and showroom together. They need to work as a team. The company name is at the top of everyone’s payroll check! How’s the cooperation and understanding at your company?

Some of you may have an overall business plan, but I’ll bet you don’t have a separate business plan for the showroom portion of the business. You need to know where you are today, where you want to be in five years, and then spell out how you’re going to get there! Do you even have a vision for your showroom? How about a strategy to make that vision turn into a reality? Please step back from all the day-to-day “stuff” and spend some time being the visionary for your showroom business.

I know that some of you do a kind of/sort of annual budget for the showroom. But without a defined profit and loss statement, there has to be a lot of guessing and interpolating. When you have a well-defined P & L specific to your showrooms, doing an annual budget becomes much easier. Please eliminate surprises and do an annual budget.

Many of you have an organization chart that shows the showroom manager and/or showroom sales consultants reporting to a branch manager. The branch manager can make sure everyone reports to work on time and can handle some of the easy HR issues, but very few know or understand anything about running a showroom. They don’t know the products, they don’t understand working with homeowners and pricing is totally different. It’s not a volume-oriented business. It’s 75% small special orders. It isn’t fair to the showroom folks that their boss doesn’t know or understand (and in many cases doesn’t care a hoot about) the showroom. The showroom folks are just left hanging out there, trying hard to do their jobs. Please, give them some help!

Okay, here’s a subject foreign to most owners: marketing. I spent the first 17 years of my professional life as a manager in wholesale distribution of plumbing products. Wholesalers do very little marketing. They may offer a golf game, a fishing trip, maybe some incentive trips in good times, a few lunches and some noon hour product barbeques - probably even some tee shirts and hats. But the showroom requires an all-new approach to marketing: things like a great Web site, ads in magazines, newspapers, radio and television. Also, billboards, direct mail, home shows, in-store promotions, etc. All of this requires a budget and a plan - a January-through-December, well-thought-out plan on how you’re going to let folks know who you are, what you do, why and how you do it differently, better and more unique than anyone else. Whether you admit it or not, your main audience has to be the homeowner. Whether you’re selling them direct or not, these are the folks who are selecting the products for their homes. Please, budget some serious bucks, do an annual marketing plan and drive these folks through your front door.

Then there are the selling skills. The showroom is a selling business. Selling is an art and a science. It needs to be taught and then practiced. Think about this: nothing happens until the sale is made! In fact, there wouldn’t be owners and managers if your folks didn’t sell something. So if selling is so darned important, why don’t you do any selling skills training? It’s so easy, so important and so few do any sales training. I don’t get it! ASA introduced a Showroom Selling Workbook and Workshop in 2008. Did you send your folks? Why not? Please contact ASA and beg them to do a workshop in your area in 2009. Or if you have enough folks they will do one for your company only.

A real pet peeve of mine is low gross profit margins in the showroom. When I owned my business I was able to put action where I’m now putting words. When I sold my business we were doing several million dollars a year with a gross profit margin in the very high 30s. I was an independent showroom competing with wholesalers. I had to buy the traditional wholesaler products from you - but my staff was able to sell value and render services that allowed me to make margins that were 10 points higher than the average wholesaler makes today. And yes, 50% of our business was to the trades (builders, remodelers and plumbers). The average wholesaler is realizing margins in the upper 20s. That’s terrible! It shouldn’t be tolerated. The cost of operating your showrooms is about the same number. That means your showroom is about a breakeven. Hmmm - is that why you invested in showrooms? Did you do it to break even, to make your vendors feel good because you’re pushing their luxury products, to make the plumbers feel good because you’ve done all the work for them? Which leads me to the next bullet point:

Please read this twice, then highlight it, cut it out and put it in front of you to remind you to do something about it: You cannot continue to sell the plumbing trade at the same price through the showroom that you do on the wholesale side. I wish I had more room to discuss this point! Suffice it to say that the cost of operating a showroom dictates that you have to make more money on showroom sales. Refer to my previous articles on this subject or e-mail or call me. I’d love to share more thoughts on the subject.

I’m running out of room - but here are several more bullets that YOU, the bosses, need to consider as they pertain to your showroom business.

• How well your showroom business runs starts at the top with YOU.
  
• You need a list of 25+/- Showroom Best Practices.
  
• Develop a compensation program that rewards sales and gross margin.
  
• Establish sales and margin goals for each salesperson and manager.
  
• Is your location and are your showroom hours customer friendly?
  
• Should you be looking for greater diversification of products?
  
• Do you have job descriptions for all showroom employees?
  
• Do you do at least one annual performance evaluation?
  
• Do you have a formal training program?
  
• Do you have a policy and procedures manual for your showroom?

The list could go on and on. Thanks for letting me vent - it’s only because I care! But I won’t feel really good until YOU, the owners and managers, really accept the challenge to get more involved with your showroom businesses. There’s such an incredible opportunity waiting for you.

If there is anything I can do to assist you, send me an e-mail or pick up the phone. I truly do want to help!