By Ken Ryan Flooring guru Tom Jennings is known throughout the industry for his many words of wisdom for retailers, including his mantra: “They say that champions don’t do one thing 100% better than their competitors; rather, they do 100 things 1% better.”
That statement accurately reflects 2021 for many flooring dealers, who—despite facing numerous challenges—are closing out 2021 with one of their best sales years ever, with many shattering records.
That dealers managed to navigate around supply chain slowdowns, inflation as well as labor and installation shortages is a testament to their entrepreneurial know-how and drive.
FCNews asked several flooring retailers to share their proven practices for profits. For many, it was all about focusing on the details and doing the little things the right way.
Don Cantor, Lake Interiors Chelan,
Buy better, choose our jobs wisely, watch our overhead cost, charge for all the little extras that we didn’t used to charge for (like detaching and resetting doors), installing carpet metals, hard surface and tile transitions. Charge more for tear-outs and dump fees.
We raised our margins and monitored our freight charges and surcharge fees more closely to include into the job price. We raised margins on our custom granite and quartz countertop installations from 18% to 25% because of the demand, and we also raised our cabinet sales margins from 35% to 38% for the same reason. We also negotiated better pricing on LVP/LVT jobs to pick up another 2%-3%. We also increased our window coverings sales by 50% volume over last year, which added another 2% in additional rebates. It all adds up.
Carlton Billingsley, Floors and More
We have been successful in adding to the sale items such as transitions, upgrade padding underlayment (not just carpet) and other items to enlarge the sale while the customer is confident in spending money with our company. We also continue to look for tools to streamline our efficiency such as technology for our office team and mechanical (floor removal machines, cutters, etc.) for the installation team. Adding line items to sales make for more profit at the beginning of the project and getting jobs done correctly in a quicker turn allows us to do more volume at the year’s end.
Steve Weisberg, Crest Flooring
Rather than showing manufacturers’ displays, we select a complete line of products—whether it is soft surface or hard surface. The products are displayed in our own custom displays. In effect, we create our own private-label lineup based on good, better and best qualities. Generally, the lineup is redone every two years. We’ve done it for 48 years. Keep it simple.
Bill Huss, D&M Interiors
Buying truckload/container deals has been good for us. We gain a solid price advantage for good margin room and try turning the product in a 60–90 day period to ensure no stagnant inventory.
The other not-so-new 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.
Matt Wien, Marshall Carpet One & Rug Gallery
Mayfield Heights, Ohio
With the increase in higher ticket items, we bumped up 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 has 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.
Kevin Frazier, Frazier Carpet One Floor & Home
- Here are some of the things we do:
Maintain rigorous control of your product net margin by developing and maintaining a vision for how your company’s standard operating procedures are set up. You want your SOP to always be ‘working’ to create more margin at multiple junctures—like pricing, payables and job costing.
- You, or your partner, should be the comptroller for both strategic and protection reasons. Remember to work on your business, not in your business.
- Audit every incoming supplier invoice for accuracy. Have a systematic, air-tight process in place that allows your operational staff at both the order-entry/purchase-order stage and the accounts payable stage to do this auditing with every invoice. We performed a year-long survey about three years ago and discovered that, month-in and month-out, 30% of our incoming supplier invoices were priced higher than they were supposed to be. This was not done intentionally, but nonetheless, 30 out of every 100 invoices came in too high. Be on guard for that.