Showrooms can shore up your business or be the rock that pulls it under.
Michael Weitz of DW Development in Willimantic, Conn., says the $17,000-a-month overhead for his Design Center East showroom/retail store is a huge nut, but there are plenty of pluses packed into 1,500 square feet of storefront. The largest is that his store and remodeling business feed each other $2 million in business annually.
Weitz has three employees and an installer at his showroom/store, with five cabinetry displays and racks for flooring and tile. To help boost sales and guarantee payment, Weitz offers a Design Center East credit card. GE Financial guarantees payment within 48 hours after a sale, while the client doesn't have to pay for 90 days to a year. At the remodeling firm, the contract steers clients to Design Center East for selections.
The only negative Weitz sees, besides needing to hustle to cover overhead, is that sometimes his remodeling firm competes against other contractors using the Design Center. When that happens, his remodeling company backs out, but the showroom still wins by selling materials at contractor's discounts.
Larry Schaffert of Schaffert Construction of Myersville, Md., isn't as positive. Schaffert, who had a similar-sized showroom for three years, says showrooms can be a rock around your neck.
Schaffert solved showroom overhead issues, such as rent and paying for a person to staff the showroom, by partnering with a Corian fabricator. The fabricator uses Schaffert's Kitchen Solvers cabinets to display its 1,400 square feet of countertop samples, at no charge, and Schaffert's cabinets and company gain visibility. Schaffert gets a few leads each month without being in the store. And now, he keeps the changes he makes to his three displays to a minimum, such as changing out drawer boxes or drawer guides.
With this symbiotic arrangement, he saves $20,000 on rent, utilities, and taxes alone. And now, he doesn't need to generate $60,000-plus in gross volume to cover overhead.
"I found a showroom is better for making selections than generating business anyway," he says. "The showroom was more of a closing tool than a sales tool. There are a lot of tire kickers out there."