To my knowledge, this is the only survey of its type, and I applaud Supply House Times for investing the time, energy and resources to obtain this important benchmarking information. If you are a wholesaler that operates one or more showrooms, this resource allows you to compare your operation to others in the industry. It’s not fool-proof, but it certainly is an excellent guide.
I have been privileged to be part of developing the survey and doing the analysis of the completed surveys for almost two decades. Those of you who have been reading my articles know that I am passionate about this segment of our industry and have strong opinions on how showrooms should be operated.
I love working on this survey. The results should help many of you make important comparisons in a number of critical areas. It has been particularly rewarding to see many of you finally embrace the idea of adding showrooms to your business model and making them an integral part of your future long-term business strategies. The survey found that 60% of respondents operate plumbing fixture showrooms, compared with 36% in the 2006 survey.
There were more than 40 questions in the survey, so it took a bit of effort on your part to complete it. Thank you for doing this! Without your participation the results would have been meaningless.
In this article I will reveal the answers to selected survey questions. In my next article I’ll share my responses to various items. Many of the survey results were as I had expected, but I also discovered a number of surprises and disappointments.
Wow! That’s a lot of data to digest. Compare your showroom numbers and data to those shown above. If you are below average, correct it - NOW! Next month I’ll share my views on the good, the bad and everything in between.
Most respondents (79%) said they do not display prices and 67% said they do not show model numbers on showroom products. Of those who do display prices, twice as many show the manufacturers’ list price vs. displaying their own net price. Of those who display model numbers, 79% show the manufacturer’s actual model number.
The survey found that 95% of respondents reported their showroom operations are profitable. Of those, 65% said they can isolate showroom sales and expenses from the rest of their operations and have hard data to support this. The remaining 35% said they cannot fully isolate those figures but think that showroom income exceeds expenses.
Showroom salespeople are paid a combination of salary and commission according to 60% of respondents, while 40% said they pay a base salary only. Gross profit alone drives the commission portion according to 72% of responding companies; 12% said sales only and another 12% said that both sales and gross profit drive commission; 4% said other.
Asked for the average monthly traffic (number of customers) at their largest, most active showroom, the largest percentage of respondents - 38% - said 100 to 199 people. Equal percentages - 24% - reported less than 100 customers or 200 to 299 customers. The same percentage of respondents - 7% - said their busiest showroom drew 300 to 499 customers or 500 to 1,000 customers per month.
More than half of respondents operate one showroom: 51%; the second highest percentage - 32% - operates more than three showrooms. The survey found that 17% of responding companies operate two or three showrooms. The mean total annual sales of all respondents to this survey was $14.3 million, down from $26.1 million in 2006. The total annual sales reported ranged from $5 million-plus up to $25 million for 37%; $25 million-plus up to $50 million for 10%; and more than $50 million for 6%. In terms of geographic regions represented, 33% were from the Northeast; 20% from the Midwest; 30% from the South; and 17% from the West.
A majority of respondents - 62% - said they target the upper mid-range price point in the showroom(s), while 33% said they target mid-range, and 2% identified each of the other two options, luxury or low end, as the target price point.
The single most important characteristic sought when hiring a sales consultant for the showroom is plumbing industry sales experience, according to 52% of respondents; retail sales experience was cited by 21%; interior design experience was mentioned by 10% and 17% of respondents answered “other.”
For more survey results, read the digital edition of the April 2011 issue of Supply House Times here on this website.