Page 16 - LPG August 2018 Newsletter

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The Luxury Report August 2018 Luxury Products Group
IS YOUR MONEY ON THE CHICKEN OR THE EGG?
The traditional bath/ kitchen showroom that is connected to a wholesale plumbing operation faces several challenges,
and the changing face of retail is adding new pressures.
Wholesalers who operate showrooms often face that very dilemma.
They must consider what type of investment — nancial or otherwise — they should make in a segment of their business that accounts for usually just 5% of sales and 8% of gross pro t. I often see owners in this situation who don’t want to invest in their showrooms because they’re not producing enough pro t. But, back to the chicken and the egg, these showrooms will never be able to produce enough pro t if not properly paid attention to with appropriate benchmarking.
MAKING A FEW SIMPLE CHANGES BASED ON WHAT YOU DISCOVER FROM YOUR MEASUREMENTS CAN MAKE A HUGE DIFFERENCE IN YOUR OPINION ON INVESTING IN YOUR SHOWROOM.
In my career, the challenge is to create the type of opportunities that will help showrooms
double and triple their numbers. To accomplish that, the owners of these wholesaling companies must rst commit to learning the showroom business, then evaluate the quality of their showroom, personnel and manage
the overall investment. When you can make showrooms 10% of your business and 20% of your pro ts, I am certain you will pay more attention to what’s going on in that segment of your operation.
Let’s take for example a showroom that has one employee. I see this far too often in my travels. In many cases, companies have added a showroom to their wholesale distribution center because of the demands of plumbers in their area — not demands of the consumer. So, the showroom lives mostly on word-of-mouth advertising and likely doesn’t see a good deal of retail traf c. If it does, it runs the risk of poor service if more than one customer enters at
a time. If the showroom is lucky, it is open a few hours on Saturday, but probably is closed