Showrooms Increase Sales And Profitability
In the late 1970s I was helping run a large plumbing wholesale business in northern California. I felt strongly about the idea of plumbing contractors having a showroom to display great products being manufactured by companies like Kohler, American Standard, Jacuzzi, Delta, Moen, Elkay, etc.
The thought was that the contractor would have a display area in the front of the building where he would show and sell products -- then run the trucks for the install and service out of the back of the building. There were no showrooms where a homeowner or custom home builder could go and see the higher-end products. Everything was selected from catalogs.
I spent several months calling on plumbing contractors sharing my vision. There was no interest! None! Zero! They basically wanted to work with the tools -- not be marketers, merchants and salespeople. I didn't necessarily agree, but I certainly respected their point of view.
I felt so strongly about the idea that in the early 1980s I left the plumbing wholesaler and opened a 10,000-sq. ft. showroom of decorative plumbing and hardware products. The combination of a good idea, the right place at the right time, and a whole lot of hard work added up to success. Since then, showrooms have sprung up all over: wholesale distributors, big boxes, independents and some plumbing contractors.
I know several plumbing contractors who have showrooms and I called to see if they agreed with me that showrooms are an excellent way for the plumber to diversify his product and service offerings and to add dollars to the all-important bottom line.
Due to the space allotted I'm only going to go in-depth about one of them. But, please let it be known that all four of the plumbing contractors I interviewed said the showroom was a great addition to their businesses and that it generates additional sales and profitability.
In fact, one of the plumbing contractors is a friend of mine and was my very first competitor with a showroom in northern California. Right now, he's in the process of closing down his construction business and he and his wife are going to make the showroom their total business.
An Entrepreneurial SpiritThe star (and I might add, a very bright star) of this article is Savage and Son Inc. of Reno, Nev. I've known this business for many years and its story is truly unique -- from several different vantage points.
First, the business was started in 1893 (yes, that's 110 years ago). Savage and Son Inc. holds the Nevada Contractor's License No. 10 and that's the oldest, active contractor's license in Nevada. The "Son" part of the name should be "Sons" because the third and fourth generations of Savage sons are operating the business.
If you like history as I do, you'll love this story! It all started with Leonard Coates Savage, a pioneer, moving west from Missouri in 1859. The original Leonard (there are now five Leonards in the lineage) rode for the Pony Express, held claims in early mining operations and ended up a successful rancher.
He passed his entrepreneurial spirit on to his son, Frank Charles Savage. Frank partnered with a gentleman by the name of Genesy, and together they formed Genesy & Savage Plumbers and Tinners in Virginia City, Nev. They sold industrial plumbing supplies for draining mine shafts.
In 1893, Frank left the partnership, moved to Reno and began his own plumbing shop: Savage and Son Inc. It was pretty much a one-man shop until 1917 when Leonard Charles Savage joined his dad in the business.
Next came Leonard J. Savage (the company's current president, known as "L.J."), who joined the company in 1954 after a stint in the Korean War. Leonard Charles died in 1958 and L.J. was forced to take over. Short on experience but long on ideas, people skills and hard work, the business thrived. This is when the major expansion of the business really began. L.J.'s wife, Eileen, worked in the business and has been a strong guiding light; she is now the company's treasurer.
L.J. and Eileen have two sons active in the business; that's four generations -- and there's more coming along! Leonard Charles Savage is currently vice president of operations and Pete Savage is vice president of accounting. Both sons went to college and worked for other companies before joining the family business. L.J. and Eileen have nine grandchildren -- the oldest being 13. I'd say the odds are very good that there will be a fifth generation to perpetuate the family business. (Yes, one of them is a Leonard!)
I'll bet there aren't many other businesses, let alone plumbing contractors, that have been continually operated by the same family for over 100 years.
Higher-End Clients, Higher-End ProductsToday, Savage and Son employs 125 people and covers northern Nevada and northern California. It's a union shop, and does business in six different areas: residential plumbing, commercial plumbing and HVAC, industrial piping, service and repair, bathroom remodels, and showroom sales.
The company prides itself in being a "one-call shop," as well as its loyal customer base and dedicated workforce. L.J. will tell you that Savage's business philosophy is to "provide a full range of outstanding service, charge a fair price and deliver excellent product."
The business has almost doubled in the past 10 years, and the showroom has contributed nicely to this.
In 1992 the company moved to a new 20,000-sq.-ft. building and opened the showroom to give Savage's customer base every possible option. Called Plumbing, Etc., the showroom occupies 2,000 sq. ft. and is next to a very large and active parts counter that supplies plumbing and heating repair parts to do-it-yourselfers and other contractors.
The "one-stop shopping" concept allows the company to sell the product, install the product and/or build out the bathroom, warranty the product, and then service it as needed. Turnkey all the way!
With the showroom, Savage can market itself to a higher-end client, thus selling higher-end products. The showroom brings people to the business that the contractor wasn't reaching before, and allows the company to compete (very nicely) with the Big Boxes. Savage offers the client a better package than the Big Boxes do with its well-trained staff that has years of experience in the industry.
Advertising and marketing for the showroom is separate from the construction side of the business. It's promoted to custom home builders, interior designers, architects, homeowners, remodelers and, yes, to other plumbing contractors. Advertising for the showroom is mainly through the Yellow Pages and radio. But word-of-mouth and referrals are the No. 1 way people hear about the business.
Savage and Son doesn't just market the traditional wholesaler products; it shows and sells a complete range of products in style, color, finishes and price point.
Some of its main products are Jason Luxury Tubs, California Faucet Co., Phylrich, Dornbracht, St. Thomas, KWC, Grohe, Hansgrohe, Toto and Kohler. Most of these products are purchased from various distributors, but some are purchased direct. The company's line card reflects quite a few more, but you get the idea: Savage and Son has a great variety of product, something for every style and every budget.
Of all the products sold out of the showroom, Savage employees install about 50 percent. While the company prefers to sell product and install it, it will sell the product only. It also will install product bought elsewhere (even from the Big Boxes) and will service everything from the smallest washer to the biggest whirlpool.
Savage's showroom business has experienced 150 percent growth in the last three years. That's huge! The overall showroom gross profit? The margin averages in the 30s!
Other features of the showroom include:
- Business hours are 8 a.m.-5 p.m., Monday through Friday and Saturdays by appointment.
- Two full-time sales consultants and two backup people for busy times.
- Flexible pricing schedule for various categories of clientele.
- Credit cards are accepted for deposits and purchases.
- Consultants offer coffee, water and soft drinks to clients.
- Live whirlpool displays and working kitchen faucet displays.
- A once-a-month product meeting for training.
- A Web page, but they acknowledge this needs to be improved.
- All showroom clients are made aware of Savage and Son's 24 hour/7 days a week service department. They will be there if you need them.
Enthusiastic Thumbs-UpAt the end of my interview with the Savage family, I had one last question to ask: "Would you do the showroom again?" The answer was a resounding "Yes!"
As Savage and Son enters the 21st century and its 111th year in business, it is committed to being proactive, not reactive; to continuing to be very flexible; and to being responsive and educated in all areas in order to maintain its competitiveness. The Savages recognize that resting on 110 years of laurels won't get it.
So, Mr. Plumbing Contractor, if you've never taken a good, hard look at establishing a showroom, now just might be the right time to do it. You, too, can grow your sales and profitability.