In today’s hyper-competitive market, the allure of selling products at rock-bottom prices can be tempting for many flooring dealers. However, history has shown that competing on price can lead to dire consequences. Not only does it hinder your ability to grow your business but it also affects your personal life, restricting your financial stability and overall enjoyment. Unfortunately, many flooring dealers can relate to these struggles.
While retail giants like Walmart can sustain low prices due to their vast volume, the flooring industry operates differently. The notion of making it up in volume simply doesn’t apply here. Cheap prices create the illusion of having a market advantage—but that illusion is shattered when someone else figures out how to sell even cheaper.
Remember Kmart? Once a dominant force in the discount retail kingdom, it seemed inconceivable that it could be dethroned. However, Walmart emerged and today Kmart is virtually extinct. Now other discount boxes and online retailers are chipping away at Walmart’s market share. Their underpaid workforce, inadequate staffing and deteriorating customer experience have driven consumers elsewhere. When price becomes the sole driving force, critical aspects of the business—like customer service—suffer.
Recently I had the privilege of coaching a flooring dealer who had been facing numerous challenges. For a decade he had been selling at margins in the low 30% range, which had resulted in a stagnant business and accumulation of debt. His stress levels were high and he felt miserable. His belief was that he had to compete on price to survive.
During our coaching sessions, I focused on transforming his mindset and helping him implement strategies for commanding higher prices. I showed him why it was not only possible but essential for him to sell at higher margins—specifically in the range of 40% to 50%. By implementing strategic changes and emphasizing the value his products and services provided, he began to see remarkable results.
Today, I’m proud to share his margins have significantly improved and are in the mid-40% range and above. He recently closed a $12,000 sale at an impressive 48% margin. This success not only paved the way for him to pay off his debts but also reinvigorated his business and ignited enthusiasm among his sales team.
This is just one of hundreds of examples. I urge flooring dealers to break free from the price rat race. Premium pricing is not only achievable but can also be a game changer for your business. I have helped numerous dealers to successfully sell at prices higher than their competition in diverse markets—from big urban centers to small agricultural towns. These dealers from across North America have proven it’s possible to thrive economically—even in close proximity to giants like Home Depot. The key lies in embracing a different mindset and implementing effective sales and marketing strategies.
By shifting your focus toward premium pricing and adopting innovative sales and marketing strategies, you can thrive in any market and economy.
Premium pricing is not only achievable but can also be a game changer for your business.
Jim is the founder and president of Flooring Success Systems, a company that provides floor dealers with marketing services and coaching to help them attract quality customers, close more sales, get higher margins and work the hours they choose. For information visit FlooringSuccessSystems.com.
