Callier & Thompson Kitchens Baths and Appliances has always sold appliances with their kitchen designs. But when owners Gary Callier, Thompson Price, and David Callier wanted to increase revenue, they analyzed this division and found it lacking. A survey of their clients showed that 95% were changing their appliances during a kitchen remodel, but only 30% purchased their new appliances from Manchester, Mo.–based Callier & Thompson. Due to manufacturers offering suggested retail pricing, Callier & Thompson was competing on price with its competitors, so the sales should have been higher.
The team deduced the low sales were because they failed to show the full range of appliances their high-end clients wanted to see. “When a customer is spending $6,000 on a commercial range, they want to see a broader selection,” Gary Callier says. And some customers did not even know the company sold appliances — they thought the products in the kitchen vignettes were just for display.
The team decided to highlight the appliances division. They created a 3,500-square-foot appliance display within their main showroom. They hired a salesperson/manager from the industry so they were able to hit the ground running.
Callier says that now when clients come in to purchase an appliance, they are aware the company offers design/build skills, and vice versa. The company is selling appliances to a higher percentage of their kitchen remodeling clients, and they are on target for stand-alone sales. On the stand-alone side, Callier offers what he calls “red carpet” installation that is a step above their competition. They have one carpenter who has great customer service skills and can install appliances with on-site adjustments. “Because of our professionalism and our great showroom, we can charge a little more than the guy down the street for appliances,” Callier says.
He says the average margin on an appliance is 20% — their company averages about 26%. Of the eight designers in the Callier & Thompson showroom, four sell the appliances themselves. The other half prefers to have clients work with the appliance salesperson.
Keeping it All Together Callier is surprised by the number of kitchen and bath showroom owners that send clients to appliance showrooms. “Once that customer leaves the showroom, you don't know if they will return,” Callier says.
Doug Nelson, CEO/sales manager of New Spaces in Minneapolis also sells appliances in his 5,000-square-foot showroom and plans to sell the same high-end brands such as Sub-Zero, Wolf, Viking, Asko, and Bosch at the company's newest location. He says with standard brands such as GE, Maytag, and Whirlpool, the pricing is very competitive, so there is less opportunity to make money. “But, if you're doing high end, $70,000 to $150,000 kitchens, you can use upscale appliances,” Nelson says.
Kathy Ostrom, president of C.N. Ostrom & Son, who recently formed a strategic partnership with New Spaces, has always been involved in selection of appliances with her clients, but in the past she sent them to an appliance showroom. “If you send them off and they bring you a list, you may not be aware that, for example, the Thermador oven needs venting,” she says. Also, the state of Minnesota has strict energy codes, so designers need to be aware of specifications and restrictions.