Turning bad breaks into breakthroughs
From evolving during the times of COVID-19, to adapting to the changing needs of today’s workforce, dealers discuss how they turned bad breaks into their biggest breakthroughs.
Diversifying is key to survival in trying times
Barrington Carpet, Akrin, Ohio
- 1 Diversifying is key to survival in trying times Barrington Carpet, Akrin, Ohio
- 2 When the world shifts, reset expectations Carpet Gallery, Hagerstown, Md.
- 3 Making tough decisions pays big dividends Carpet & Tile Warehouse, Vero Beach, Fla.
- 4 Adjusting strategies when old models fail CarpetsPlus of Wisconsin, Madison, Wis.
Barrington Carpet survived the Great Recession in 2008 by diversifying into new markets, according to Craig Phillips, president. In retrospect, it was a move that positioned the company to weather the current challenges brought on by the pandemic.
Prior to 2008, Barrington Carpet was almost exclusively in the new building and custom retail market and was beginning to feel the builder market erode around it. After the economy bottomed out in late 2008, Phillips was approached by a general contractor on a large commercial project who reached out on a vendor’s recommendation. Knowing they were pigeonholed in a declining market, he decided it was time to take a risk and try diversifying. Going from small residential projects to major commercial installations is a daunting step, Phillips contended, but Barrington Carpet positioned itself for success. “It was a bit scary because the numbers were a lot bigger than we were used to,” Phillips recalled. “Our next step to diversification was in 2010, we hired someone who specialized in apartment replacement and multi-family work.”
Now, Barrington Carpet does it all—residential retail, large commercial, multi-family and property management. When Phillips started in 2007, there were about 10 in-house employees and 10 installation crews. Today, there are 42 in-house employees and 70 crews specializing in different aspects of the trade. “As we continue to grow it has been a challenge for us,” Phillips said. “We have different crews that specialize in different fields. Just like we have sales specialists, project manager specialists, we have installation specialists.”
A combination of having the right people in the company, strategic hires to gain specialization and versatility, the willingness to take the big step and that initial lucky break has enabled this diversification to take off. “As soon as the state opened again for all business it has been nothing but pedal to the metal,” he said. “It’s just been unbelievable. There have been signs of softening but the best thing about diversification is that our commercial business is going to be off, but we are going to be on top with double digit increases year after year.”
When the world shifts, reset expectations
Carpet Gallery, Hagerstown, Md.
Like many dealers, disruptions in the supply chain have been the biggest challenge for Tim McSherry, owner of Carpet Gallery, Hagerstown, Md. His response? Refocusing his sales staff to ensure they don’t sell any product on backorder or not immediately available in the United States. “It is very important for our sales team to set expectations around possible delays in materials but, more importantly, not to order products that are on back order,” he said.
RSAs like Mark Miller are buying into the shift in focus. “Clients understand the challenges all businesses face in these times, and how it is better to finish a job early based on a conservative estimate than to try to promise something they might not be able to deliver on,” he explained. “Clients will either accept the fact that it will be a wait, or they will move to a different product. It is a much more comfortable experience as a salesperson. It is part of the rethinking of how we do business and will continue as long as there are disruptions in the supply chain.”
Making tough decisions pays big dividends
Carpet & Tile Warehouse, Vero Beach, Fla.
To address the obstacles presented by the coronavirus pandemic, Deby Winter, owner, and her husband/business partner made a bold decision: stop providing installation. After 24 years, Carpet & Tile Warehouse shifted to an entirely cash-and-carry model where installation is all handled primarily by one company the store partners with. “We gave up instillation in September or 2020; you want to talk about being petrified? We were in the middle of the pandemic and decided we don’t install. Best decision we’ve ever made.”
Winter said the store will never go back to providing installation. Dealing with issues arising from supply chain challenges, staffing and pricing, Winter said she decided to cut installation loose instead of narrowing the product assortment, which has led to a strong increase in sales. Previously, Winter said she had five crews, but the change in the store’s approach now allows 20 different jobs to happen at once—enabled by the expanded capacity of their installation partners.
Having a strong partnership with a quality company has turned this risky move into a success, according to Winter. “We had companies we worked with and found out they could do installation, so we set up a partnership,” she explained. “If [the client] needs a labor quote, we fill out the form and communicate with them, we place the order and it comes into our warehouse and they come and pick it up. We supply 100% and with cash and carry you get paid all up front. The gray clouds lifted.”
Winter added that she sees this approach as a viable option for other dealers looking to tackle current challenges in the industry. “I have been getting a lot of calls from stores around the country. They want to know how we did it because they want to get out as well. However, be careful who you decide to work with for labor. If you have the wrong partner, it can taint your business.”
Adjusting strategies when old models fail
CarpetsPlus of Wisconsin, Madison, Wis.
Sometimes a few tweaks can make a major impact. Michael Peters, owner, faced the same series of unfortunate events as so many others during the beginning of 2020. A labor shortage compounded by the coronavirus pandemic followed by supply chain issues hit Peters hard. After losing five employees to an assortment of unrelated health issues in 2019, Peters made a few changes to bounce back.
First, at the onset of COVID-19, hey shortened hours. After appointments-only became the norm during the early stages of the pandemic, Peters opened with shortened hours. “We reopened by appointment only, and then it became open to noon, then 3 pm, then 6 pm, which has worked so well I don’t see us ever going back to 9 pm” Peters said. He added that more people—especially young people—have found the job more attractive without the late-night hours. “We ended up hiring three people who brought in their friends and peers, and they are excited to be doing this in their 20s. I can assure you, they would not want to do it if they had to be here until 9 pm”
Next, Peters adjusted his buying strategy in anticipation of the supply chain challenges. “In 2020, we started buying our hard surface products more like we buy carpet. We are stocked in much greater depth—by the truckload—and, as a result, we get very good pricing. We have been able to beat some of the price increases and bring in a truck at regular price. Getting that ‘double saving on cost advantage,’ has allowed us to keep prices consistent while gaining a higher mark-up.” These margins have allowed Peters to adjust the commission scale so the sales team is able to earn more. What’s more, he said the staff has become more productive in the hours they are on the floor.