Retailer2Retailer: Find another gear

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Nov. 18/25 2013; Volume 27/number 15

By Scott Perron

Scott Perron

When it’s all said and done, 2013 will be known as the year that the flooring industry officially left the recession of 2009 and beyond. Although there have been slight signs of recovery since late 2012, most dealers in almost every market are reporting a favorable increase in business while others are strategically planning for real-time growth. I have talked with and worked to help dozens of teams all over the country in concert with researching my own markets in southwest Florida. Make no mistake: There is action and reaction to the current market trends.

Now for those of you who are not experiencing the positive inertia I am describing, my unsolicited advice is very simple: Find another gear.

I recently interviewed six seasoned and successful dealers in a market where our company intends to expand. Three of the dealers are in full growth mode, psyched about the future and their plan of attack. Two dealers showed clear signs of wanting to grow but were unsure about the road to take. Finally, the last owner was already defeated, spending 20 minutes telling me why business will remain stagnant, that the big boxes will continue to cause the erosion of his market share and that expansion is cost prohibitive. There are those who think they can and those who think they can’t; they’re both right.

Companies all over the nation are ramping up their game plans. Are you? For each cycle of decline there is an explosion of growth that causes a shift of the players in every market. Due to the magnitude of the last downturn, a huge number of dealers were effectively put out of business, and the lack of available capital makes it a challenge for many to reinvest. The good news, however, is there are much fewer competitors to service the rebound in sales, and the lessons from the decline have been burned into our brains. Patterns of best practices or business fundamentals are emerging with respect to the companies on the move.

Multiple brands

No matter how great your existing business is at sales, service and success, there are undoubtedly others in your market that appeal to a different niche of customer. It would be wise to examine your footprint and decide how you might expand or, better yet, diversify your offering across different types of buyers. Be sure to research these options fully and decide if these markets are right for you. Know who you will be competing against and look for weakness in that segment.


If you can afford to purchase your locations, that is fantastic, although that can eat up a lot of cash and slow down expansion capability. Be especially careful to enter into lease agreements that clearly define escalation clauses and increases in CAM charges, and allow for a reasonable time to escape while not burdening you with years of future rent. Good landlords want good tenants, and if your company is strong you will be able to make a deal. Make a point of shopping every cost annually to secure the best cost structure.


From the front door to the back, there is a machine that runs your business and delivers the customer’s expectations. Be sure to consult your staff and customers to identify your weaknesses and build your strengths.

If you have been working in your business instead of on it, remember there is a competitor in your market who is working harder, researching options and looking to find another gear with the hopes of passing you by. The question is whether he will succeed.

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