Product niche marketing...
Another way to increase sales, profits and market share

BY PETER SCHOR
Showroom specialist

CAUTION: Reading and digesting this article will dramatically increase your sales, profits, and grow your market share. It will be important to keep your mind completely open while reading and digesting the content. There is a complete separation in mindset between the conventional thinking of the plumbing wholesaler pvf side of the business versus the middle to high-end plumbing/bath showroom. I guarantee you that the top 10% dph and plumbing wholesaler showrooms in the U.S. and Canada have utilized this process to leverage their success. In fact, there is a plumbing wholesaler in the top 10 that has used this for 25 years. Any doubt, and I would be glad to email you the names of a few dominant successful players that use this in your marketplace.

Over the last two years of writing this monthly column, I have written some “juicy” information taken from the most successful models of showrooms. Openly and honestly, I do hold a high volume of very special information back for my paid consulting/coaching and custom-tailored showroom seminar clientele. Those of you who remember the 42 two-day “city” showroom programs I conducted around the U.S. and Canada and conducting Kohler’s Registered Distributor and Dealer Programs (1988-1992) are amazed at the depth of information that I bring to the table in 2006. Fresh, juicy and changed with the times! The other important thing is that “people” sell products; products don’t sell themselves. This is why I teach people the latest showroom skills, especially in a changing society.

As you know by now, I am not running a popularity contest, so I am sure that some of the major “selling everyone” plumbing and bath manufacturers will be aggravated by this article. I apologize in advance, as I am here to serve you, the collective industry.

Product Niche Marketing is one of the most important things you can do for a new or existing showroom. Product lines are evaluated differently between conventional inventory-driven plumbing wholesaler and the plumbing showroom wholesaler.

The first thing needed to be done is to carefully evaluate your stocking product lines that are sold in the showroom. I am not advocating radical changes. As an example, take your stainless steel sink line. You evaluate this category to find out that numerous ultra-competitive discount plumbing wholesalers, hybrid showrooms and home centers sell this in your marketplace. You may make a decision to find a lesser-known -- yet high-quality -- product line to be sold in the showroom (short buy/sell high) while continuing to sell this normal stock line thru your conventional wholesale and retailer channels. You might find it is time to change the product line in both cases.

In regards to re-evaluation of showroom product lines or opening a new showroom, here is the order of importance to the top 10% of successful dph (decorative plumbing and hardware) and plumbing showrooms:

• Quality: Will always remain on top. We only have time to sell it once. I am including in this first one -- reasonable lead time, great customer service; excellent pk; easy to sell; pop; co-op advertising program; a great local rep of integrity is a “biggy” and a lot more things as a part of the re-evaluation process.
• Gross profit margins: You need to examine the gp of all of the product lines you currently have. Can you earn much higher gp with a lesser known brand of equal quality? Yes, I 100% agree that you must have some a good mix of branded product lines. When I say that there are plumbing wholesaler showrooms yielding 37% to 42% gp on high volume in my past articles. It is absolutely do-able.
• Limited distribution/semi-exclusivity/exclusivity: This is state-by-state, region-by-region and local market situation. This is why you need a product expert like myself,
  Hank Darlington or Don Arnold who sees a more broadened array of product lines throughout the North America. Yes, even in this day and age, exclusivity can be found. A few months ago I conducted a seminar for a major plumbing wholesaler with multiple high-end showrooms. They were yielding low profit margins on air massage/whirlpool tubs due to fierce competition. They found a manufacturer who makes a very high-quality and desirable line and cut a “win-win” program that gave them an exclusive for the multiple states they serve. At the showroom seminar I conducted, I saw how motivated and happy the management and showroom staffs were in making higher gp and higher quote percentages being written up into sales. Limited showroom distribution means that when you quote these product lines, the quote turns into an order more often.
• Inventory turns (if stocked): You know this better than the showrooms know how. Many questions to be asked of which you know, i.e., Does the manufacturer have a program to rotate slow moving inventory into faster-moving items, once or twice a year?

Buying groups, both wholesaler and Forte showroom types, are exceptional but do not guarantee your showroom will have an edge on that said product line in your exact marketplace. Many times, manufacturers have set-up your local competition way before they entered the buying group. Again, it is also the level the competition sells the bath and plumbing products in your marketplace that lowers your gp on board.

In order to start the showroom products evaluation, you must first write a far left column of everything possible that goes in a bathroom and kitchen that can be sold. You will find many of those less seldom sold products inside the content of this article. Across the column to the top right of each page should list the three to five dominant showroom competitors. You now need to begin your search of each competitor to find out what product lines “they prefer to sell.” You can get their product line card; go on their website; or just call up and ask, “What brand would you suggest for a towel warmer?” Glass sinks? Bronze sinks? Shower doors? Magnification mirrors? Get the picture? Like all of us, you always lead with your best lines. There are many other creative ways to get disclosure. You will also need to visit the local home centers (Home Depot, Lowe’s, Expo and Great Indoors).

Next, identify the numerous product line manufacturer not sold or seldom sold in your marketplace. Find out who the manufacturer rep is but call up the national sales manager. Tell him or her that you are considering making a change in their product category. You tell the sales manager that you know the rep but prefer to ask some important questions to him/her. The questions are:

• “Who in our market is your major displaying or stocking showroom client(s)?” You now are checking your homework in the prior paragraphs.
• “While you will certainly buy through your local representative, do you have master distributors or large stocking distributors outside are marketing area? The reason I am asking you is when you run out of a line product, we can attain it on a short buy to accommodate our clientele.” I will give you some legitimate reasons, if you have not figured out why, if you send me an e-mail. I want to see how many people are reading this article.
• “Are you a member of any of the wholesaler or dph buying groups?”
• “If we make a major commitment to sell your product line and limit the amount of conflicting product lines in your category (faucets are harder than a towel warmer) will you limit the amount of other showrooms the rep can open after we put the market on high demand for your products?” What are your requirements in sales and display for a ‘win-win” partnership?”
• Regular questions such as availability/lead time, terms and many other we all know.

I know personally dozens of the top bath/plumbing/decorative hardware showrooms in the U.S. that have product lines that operate in the above “win-win” partnership relationships. I was working with one of these showrooms last month where the national sales manager called the owner of the showrooms and asked, “How would you feel if we opened up the ________showroom?” This is called respect. In this case the existing showroom felt that they are good competition further away. In many cases, it is a flat no. The no means that it would strain the working relationship. Once your showroom creates the market for a specific product line is it fair that the rep. open up a bunch of other showrooms from your work? Of course not.

I am currently working with a plumbing wholesaler with multiple locations opening up their first 6,000-square-foot high-end showroom. I guarantee that many of their showroom product lines will be like the Great Wall of China to infiltrate by the competition.

Showroom products -- self-destruction
As I travel the U.S. and Canada, I am still finding many wonderful plumbing wholesaler showrooms without the full array of bath and related products that are expected by the consumers and professional trades when visiting your showroom. Today, more plumbing showrooms have moved toward “one-stop shopping” by handling a wide variety of high-profit margin plumbing products.

I understand, acknowledge and applaud those plumbing wholesalers that sell 100% to the licensed C-36 plumbing contractors. By not handling these non-plumbing hook-up bath and kitchen products, you are doing the injustice to the plumber, yourself, professional trades and the consumers!

The truth is that the consumer or professional trades expect to see and buy bath and related products somewhere. If they cannot see or buy them from you, they will surely find a plumbing/bath decorative hardware or wholesaler showroom that will sell them these products. While they are there, they will see some of your products and other exciting products similar to yours and perhaps at a discount price.

These non-plumbing bathroom products which the plumber does not want on his invoice can be sold direct to the consumer at msrp or -10%. The consumer then gives it to their builder/contractor to install. Why would the plumber care if he does not want to make the sale or install these products? These items are: lavatories -- 15 different type of materials today; bath furniture -- traditional and contemporary; bathroom magnification mirrors and lights; bathroom lighting; bath accessories -- all types and to include free-standing ones (Allied Brass); medicine cabinets; washlet seats; steam and sauna units; shower doors; towel warmers; hand showers/multiple shower devices; electric floor warming; lcd-tv bathroom mirrors; sun tanning showers; shampoo and shower/tub soap dispensers; toilet chairs -- traditional or contemporary that hide the toilet, made to order of the toilet model; and many other products.

Please examine the above list and display -- or at least have access to -- these bath and related products. If you don’t, you might as well give the consumer or professional trades a list of some very high-priced decorative bath and hardware showrooms. If you don’t, they will “pick your pocket” with similar products that they see elsewhere. We call that “Showroom Products -- Self-Destruction.” Out in the street it is simply called “Product Suicide.”

 

Peter Schor, president of Dynamic Results, Inc., is an educator, motivational speaker, consultant, coach and writer in our industry and many diverse others. For the past 17 years, he has conducted 100 educational programs yearly, including 34 industry conventions. Schor has great expertise in the field of showrooms and has won many industry awards. He also works with manufacturers in the field of sales, marketing and public relations. Schor has a new book called Pillars of Success, published by Insight Publishing Company, Sevierville, Tenn. He can be reached at 1491 Ivy Arbor, Lincoln, CA 95648, phone 916/408-5346, fax 916/408-5899, e-mail pschor@dynamicresultsinc.com or at www.dynamicresultsonline.com.