If you’re fortunate enough to be a larger retailer with deep pockets and a diverse customer base to get you through the rough patches, then you probably don’t panic when things slow down. However, if you’re a smaller independent flooring dealer that tends to struggle in a tight economic environment, it might be time to change your tactics.
Here are some proven tips to help improve your bottom line and, eventually, your outcomes:
Charge a fee for credit card purchases.
Do you use a cash price or do you add on 3% for credit cards? Credit cards today cost you anywhere from 2.6% to 4.5% of the sale. (American Express being the most expensive, and a lot of people use that.)
Everywhere you shop, most merchants charge for credit cards—restaurants, home improvement businesses, gas stations. Floor covering retailers shouldn’t be any different.
Making this change could add 3% to your bottom line. If you do $1 million a year in business, think of how much you can make by adding 3%. How much business do you have to do to net an extra 3%?
Require a bigger deposit on orders.
Some retailers require a minimum 25% on orders. That’s not enough. How about 60% to 65% down on the order? You can even set it up in your CRM system where the customer gives you a credit card for the deposit, and then when the installer is finished with the job, you can run that credit card that afternoon for the balance. For example, the installer calls you up at 4 p.m. and says, “I just finished the job; it’s OK to run the credit card now.” That’s how other trades—i.e., plumbers and electricians—operate. Why not do the same? Do you think this is too extreme? Don’t forget that Home Depot and Lowe’s get 100% down when writing the order for an installed project. It’s another way to keep the cash-flow going.
Negotiate better prices.
In retail, everything is negotiable. This includes the cost of product—especially if you do
a lot of volume. The next time you have a large order (let’s say more than 100 square yards of carpet), call your distributor rep. If you give them a good reason (tell ’em “It’s for Aunt Tilly or Uncle Jack” or whoever), you can usually get a little better price. Also, is there an item on sale? Too many people order carpet blindly. They’ll order 100, 150 yards, and they never ask for a better price. There’s always a better price.
Price cut orders accordingly.
Are you charging the customer freight from the mill or distributor to you? Freight today usually runs from $75 to $150. Some retailers charge $125 to $175 delivery to their customer per mill (sometimes customers have multiple mills or multiple rooms).
Refresh your website.
If you haven’t upgraded your website in the last two to three years, you’re probably overdue. It sounds simple, but updating your website frequently is very important. Remember: most people go to Google or other online outlets to get more information on a flooring/home improvement project, or to look up the nearest dealer in their area. Many also look for positive customer reviews on your website to help put them at ease. Lastly, is your website search-engine optimized? Try this: Google “floor covering stores near me.” Does your store appear in the top 10 search results? If not, you need to fix that.
Harold Traister is regional vice president, northeast region, Abbey Carpet & Floor. A 65-year veteran of the floor covering industry, Traister is known for his sales acumen, mentoring and networking skills. In 2024 he earned the Al Wahnon Lifetime Achievement Award from FCNews.
