Proven retail practices to boost profit margins

HomeFeatured PostProven retail practices to boost profit margins

By Ken Ryan Successful flooring retailers didn’t get that way by luck or by accident. Through proven retail practices — and sometimes trial and error — they learned how to conduct business smarter and more efficiently to boost their bottom line.

FCNews spoke to flooring retailers about what their proven retail practices are and what has worked for them:

Kevin Rose 

Carpetland USA & America’s Flooring Store
Arlington Heights, Ill.

“Follow-up always remains at the top of the list. Close the deal the first time they are in the store. We all know the ugly percentages of hoping they return aren’t good. Sell what you believe in, and always get back to your customer quickly. Customers have many options, and many times service is all that separates you from the competition.”

Bill Huss 

D&M Interiors
Appleton, Wis.

“Buying truckload/container deals has been good for us over the years. We gain a solid price advantage for good margin room and try turning the product in a 60-day to 90-day period to insure no stagnant inventory. Another idea is to display some of your higher-margin products in very visible spots of the showroom. Having a sales staff that does not sell off price is important; instead, they stress the importance of quality and fashion.”

Steve Weisberg 

Crest Flooring
Allentown, Pa.

“Crest Flooring only offers two prices for each product we sell. Quantity pricing for 900 square feet and up, and a slightly higher price for lesser quantities. Unlike a lot of flooring stores, we proudly offer the two prices and nothing else. This allows me to establish workable margins on each product and thereby maintain my profitability at the same time.”

Kevin Frazier 

Frazier’s Carpet One Floor & Home
Knoxville, Tenn.

“[Our] No. 1 proven retail practices, as boring as it seems, is our system for systematically verifying expected prices, including freight, on every single invoice, and short paying any that are more than $2 above expectation. That being said, if a supplier’s invoice comes in higher than our “expected” cost, we only give the supplier a $2 buffer before we simply pay our expected cost. This is huge. Why? Because we receive more than 30 invoices a month that are significantly more than they should be; that’s about 400 a year to the tune of more than $30,000. It’s boring, and it takes effort, but it saves tons of profit.”

Travis Carlson

Carlson’s Flooring America
Fort Myers, Fla.

“For us, a few strategies that have worked well to achieve higher margins. By focusing on the value of the package the customer is receiving as a one-stop-shop for full service on both materials and installation—and standing behind/upholding the applicable warranties even when the supplier/independent installer does not—has worked to our advantage. Our follow up and follow through is key.

A second practice is to promote our heritage. Not only to show the customer how long we’ve been in business, and that we’re not a fly-by-night company, but so they realize the knowledge and expertise we have to offer them with more than four generations of floor covering experience on both the sales and installation side.”

Matt Wien 

Marshall Carpet One & Rug Gallery
Mayfield Heights, Ohio

“With an increase in higher-ticket items, we bumped our margin on premium goods. We increased our minimum labor charge and implemented a project minimum of $1,000. If a job comes in at $650, we charge $1,000. If the customer agrees to it, we move ahead. If not, we move on. It’s been working surprisingly well with minimal pushback. This helped keep our calendar clear of undesirable projects that have clogged up our installation schedule in the past.”

Marjorie Benson 

Friendly Floors
Port Charlotte, Fla.

“One of the best things we do at Friendly Floors to keep profits up is to not be afraid to mark our showroom at a very good margin. Our job is to show why we are worth them paying the price as stated. If a discount is necessary, I believe you have to take something away or it will look as though you were trying to overcharge them to begin with, which is a great way to earn distrust.

Another strategy is obtaining reviews from our customers on social platforms; this way, people get to see the unbiased opinions of people just like them before they make a purchasing commitment. It’s today’s version of word of mouth.”

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Jan. 25/Feb. 1, 2021

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