Greetings Floor Dealers!
When I was in college I earned my daily bread by giving private guitar lessons at a music store. The owner of this store was a good-hearted and generous fellow. A little too generous. He sold his wares at incredibly thin margins, so thin that he had to take part-time work outside his store to stay afloat, always had to do things on the cheap, and could never get ahead. His excuse was the same as many floor dealers: the only thing people care about is cheap price. That was twenty-five years ago, and things haven’t changed much for him. He still struggles. His business doesn’t prosper.
That’s a heavy, heavy price to pay for selling things cheaply. Not only does it hinder you’re your ability to grow your business, but you suffer personally through the inability to save for retirement, take vacations, and simply enjoy life. Life is a constant struggle. Too many floor dealers can relate.
Walmart can sell things cheaply because they are set up to move a ton of products, so they (sort of) make it up in volume. Flooring retail doesn’t work that way; you will not make it up in volume. Yes, there are a handful of national dealers who have adopted the Walmart model and seem to be succeeding, for now. But cheap price is a fragile market advantage because all it takes is for someone to figure out how to sell at an even cheaper price and you’ve instantly lost your advantage, and quite possibly your business. There was a time when Kmart ruled the cheap-price retail kingdom. Thirty years ago it was inconceivable that they could be knocked from their throne, but then Walmart came along. If they aren’t careful they’ll suffer the same fate. Other discount boxes, not to mention online retailers, have been carving up the cheap-price retail market and stealing market share from Walmart. An April, 2013 editorial in Forbes by Rick Ungar has the telling title: Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails—Proof That You Get What You Pay For. Costco’s earnings for year-on-year sales were at 8 percent, while Walmart’s were at 1.2 percent. Walmart pays its workers horrible wages, is grossly understaffed, thus resulting in lack of customer help in the stores, and an overall customer experience that is terrible, and getting worse. Ungar theorizes that this has driven customers to Costco. I think he’s right. But that’s what happens when cheap-price is your driving force; little things like customer service get kicked to the curb.
If you’re a retailer I urge you to completely get out of the cheap-price rat-race. I’ve taught many dealers to sell at premium prices, and to do so in many different markets, from big cities to tiny agricultural towns and everywhere in between. Dealers from across North America have proven you can sell at premium prices in any market and in any economy, even right across the street from Home Depot. Anyone can learn, but it starts with a willingness to adopt a different mindset and to implement new sales and marketing strategies.
I wonder how the music store owner’s business and life would have been different if he’d devoted his energies into figuring out how to sell his products for the most money. I wonder the same thing about floor dealers who are trying to compete on cheap price, which is why I’m devoting time to this subject.
In Part 2, I reveal how to determine if you’re facing a long, slow financial death.
To Tons Of Customers!
Jim Augustus Armstrong is The “Coach”
Jim Augustus Armstrong is the President of Flooring Success Systems, a program that equips dealers to double their profits, cut their work hours in half and beat the boxes! Many dealers have totally transformed their businesses and their lives for the better after joining Flooring Success Systems.
See what real, live dealers are saying!