I'm like most of you … I love a great success story! This story is about how a friend of mine, who was also a good customer of mine, became a competitor and remained a good friend.
My first career was managing a large plumbing/HVAC wholesale business. In the late 1970s and early 1980s I recognized the need for showrooms to show and sell some of the great-looking, higher-end plumbing products that Kohler, American Standard, Eljer, Delta, Moen and others were coming out with. My first thought was that the plumbing contractors who specialized in residential/custom homes should be the folks who develop these showrooms.
I worked very hard trying to convince plumbing contractors in northern California into building out a showroom. It just made sense to me that a contractor could show the products up front and run the install trucks out the back door, offering a turnkey job. I’m a darn good salesman, but had zero success in this effort.
Next I tried to talk the owners of the wholesale business I was managing into doing a showroom. They said, “No thanks. We know wholesaling, but nothing about retail.” I was still convinced having a showroom business was a good idea. So I decided to put my money where my idea was and opened a 10,000 sq. ft. showroom in Sacramento, Calif. It was an immediate success.
The homeowners, builders, remodelers and designers loved what we were doing. Plumbers were slower to buy into it, but over time several plumbing contractors who specialized in higher-end residential jobs saw the value of what we were doing and became excellent customers.
Jerry Kain of Kain Plumbing was one of our first and best plumbing contractor customers. Jerry and his wife, Judy, became good friends as well as good customers. So when they invited my wife and I to have dinner we thought it was going to be another very nice social get-together. Big surprise … the Kains announced they were going to start their own showroom about five miles from our business.
After the shock receded, we congratulated them and offered any help we could give them. This is America, home of the free enterprise system and the Kains were going to do what I had preached for a couple of years — be a plumbing contractor who displayed, sold and installed the product. A true turnkey business.
Jerry got his plumbing contractor’s license in 1975. He worked for a couple of other contractors specializing in residential/custom jobs. He started Kain Plumbing in 1979 and was successful in being the plumber of choice for some higher-end housing developments in the Sacramento area.
In 1987, the Kains opened Plumbing Unique, a 3,500-sq.-ft., very nicely built-out showroom. They had been buying products from my business, The Plumbery, and a couple local wholesalers. By opening their own showroom they were able to buy a majority of the decorative plumbing products direct from the manufacturers.
In the beginning, Jerry and Judy believed they could market and sell products to other plumbing contractors. Heck, he was one of them! But they couldn’t make this happen, so they concentrated on custom builders and homeowners.
For several years, my business and Plumbing Unique were the only two games in town. But in the late 80s and early 90s, a couple large wholesalers recognized the advantages of getting into the showroom business and competition heated up a bit. But the greater Sacramento area is home to more than a million folks, so there was plenty of business to go around.
High end, high margin
Jerry and Judy operated Plumbing Unique as pretty much a “mom and pop” business, with Judy doing the books, purchasing and selling and Jerry, with a couple of plumber employees, doing the installs. In 2009, they decided they needed to change their business model. They moved the showroom to a much more visible, retail-friendly area and opened a 10,000-sq.-ft. showroom, backed up with 10,000 sq. ft. of warehouse and office space. Plumbing Unique added appliances to its product mix when it made this move, which works well with the kitchen business.
They sublet the old location to a kitchen cabinet dealer, who very successfully operates his business right in the showroom space. Kain Plumbing had grown from working on higher-end custom homes into some tract and commercial work. The plumbing contractor side of the business had grown to 15 employees and the increased size of both businesses afforded them even greater purchasing power.
Although Plumbing Unique was a direct competitor of my business, Jerry and I were smart business people and were able to grow sales and maintain very attractive margins each year. Plus, the Kains and Darlingtons continued to be good friends, although we didn’t talk as much business on our social outings.
Unfortunately, Jerry was diagnosed with terminal cancer and passed away after a very short illness in 2010.
Jerry had never liked working in the showroom so Judy, daughter Jennifer Sheffield and a couple showroom sales consultants handled this duty. Jennifer had graduated from design school and came into the business extremely well-qualified to handle the showroom displays, marketing, design and sales responsibilities. She became the showroom manager and Judy handled the important role of bookkeeping and purchasing.
I had sold my showroom business in 1995. We had grown the business to three stores doing in excess of $10 million in sales at a very healthy 39% gross profit margin.
Since selling my business I have been a consultant in the decorative plumbing and kitchen business, and have written several business management books. I also teach business management classes, showroom selling skills workshops and webinars, and act as a broker for folks wanting to buy or sell a showroom business. In January of this year, I had the pleasure of helping Judy and Jennifer sell their business to Pace Supply, a large Northern California plumbing wholesaler.
Jerry, Judy and Jennifer proved what I had believed for a long time — that a plumbing contractor operating a decorative plumbing showroom can be a very profitable undertaking. Plumbing Unique had grown sales to $3 million at a very handsome 38.5% gross profit margin. Plus, they had the added revenues generated from Kain Plumbing. A real win-win for both businesses.
Today, Jennifer is the director of showroom development for both of Pace Supply’s showrooms: Premiere Bath and Kitchen in Santa Rosa, Calif. and Plumbing Unique in Rancho Cordova, Calif.
I met with Judy to get the facts for this article and she told me she is busier now than she was when she was working full-time at Plumbing Unique. She plays tennis, golf, travels and is spending more time with her kids. Plus she put a nice chunk of change in her pocket from the sale of Plumbing Unique.
This is a great success story for some very nice people.
I still believe there is a wonderful opportunity for plumbing contractors to operate a showroom business. You can offer something wholesalers and independent showroom owners can’t offer — installation of the product. Customers love doing business with only one source. They are busy and don’t want to shop for product one place and then have to go find someone else to do the install.
Please understand that you don’t have to be the person meeting, greeting and working with the homeowners. You can hire other qualified folks to do this so you can do what you are trained to do and are good at doing — installation and service.
If you have interest and would like to learn more about opening a decorative plumbing showroom, give me a call or send me an email. I’d be pleased to chat with you.