Counter top sub or showroom?
How do you source counter tops? What's the most profitable method of supplying them? What percentage below retail can I get for a small company(probably 2-3 kitchens per year)?
Up to this point I have always had my customers order a counter top from the showroom of whichever supplier they are working with or they already have a supplier in mind. I don't think like a GC all the time so I've been letting this go but I always end up having to be involved in the process so it's time for me to take ownership of the project and make some money too.
I'd rather go through the showroom for ease of sale but I'm doubtful that the pricing is really competitive for going right to the distributor. They problem there is that it's been very hard to get decent pricing from the distributor as a new customer.
Up to this point I have always had my customers order a counter top from the showroom of whichever supplier they are working with or they already have a supplier in mind. I don't think like a GC all the time so I've been letting this go but I always end up having to be involved in the process so it's time for me to take ownership of the project and make some money too.
I'd rather go through the showroom for ease of sale but I'm doubtful that the pricing is really competitive for going right to the distributor. They problem there is that it's been very hard to get decent pricing from the distributor as a new customer.
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Stone is so competitive that there isn't much margin to be made in it by anyone unless they are a direct importer and fabricator. I have wholesale negotiating power, and some jobs end up being less than 10%, which doesn't really cover my time to deal with the paperwork and handholding for the client. But, that's what the market demands for entry level granite. Where we do well, is with our Cambria fabricator. It appeals to a less cost conscious client, and we can get a good enough wholesale price to get market rate on it and still have 15%. But, we have national negotiating power for that relationship.
With only a couple of kitchens a year, the hassle of you being the responsible party for that aspect probably isn't worth it to you other than as a convenience factor for your client as a "one stop shopping". If I were you, doing the volume that you're doing, I'd try to fold the stone price in with the whole job price. and not call out it's price in the contract at all. If you can't do that because of market pressures, then I'd find a relationship with someone who could do the fabricating well and that you can trust to be stand up, and just put the barest minimum markup on it for your time ordering it, and just mark up other material for the job higher to make up for the low margin on the stone.
Or keep doing what you're doing now and avoid the headaches.
With only a couple of kitchens a year, the hassle of you being the responsible party for that aspect probably isn't worth it to you other than as a convenience factor for your client as a "one stop shopping". If I were you, doing the volume that you're doing, I'd try to fold the stone price in with the whole job price. and not call out it's price in the contract at all. If you can't do that because of market pressures, then I'd find a relationship with someone who could do the fabricating well and that you can trust to be stand up, and just put the barest minimum markup on it for your time ordering it, and just mark up other material for the job higher to make up for the low margin on the stone.
Or keep doing what you're doing now and avoid the headaches.
Thanks for the info Live_Oak. As it is now, I'm the first in and last out so all headaches belong to me anyway. I've had to deal with two mediocre installs in the past month and I had to make sure they were corrected to my standards so I'm comfortable taking on the responsibility. I don't take this kind of crap from my subs.
I never break down pricing so it's not an issue of the HO seeing my markup but more that, since I'm taking on responsibility for the final product, selling the product and standing in between the headache(whups, I meant HO) and the distributor, then some of the cost of my time should come out of the distributor's price. That's why the showroom gets a discount so why shouldn't I?
I NEVER deal with entry level granite, btw. We're talking about $70+ per square foot on everything I've dealt with in the past few years. Most of them over $80.
I never break down pricing so it's not an issue of the HO seeing my markup but more that, since I'm taking on responsibility for the final product, selling the product and standing in between the headache(whups, I meant HO) and the distributor, then some of the cost of my time should come out of the distributor's price. That's why the showroom gets a discount so why shouldn't I?
I NEVER deal with entry level granite, btw. We're talking about $70+ per square foot on everything I've dealt with in the past few years. Most of them over $80.
For 2-3 kitchens you may get the standard contractor discount which is in the 10% area. What difference does it make that you don't use entry level granite? Markup is the same across the board, it's not like it was 10 years ago when prices were wild.
You need to develop a relationship with them just like any other supplier. Price does not matter as much as a good install. But almost as important is being on time for templating and installation.
With my guys I know everyone in the office/shop/install crew, if there is a problem they they take care of it quickly. They have done many custom pieces for me in the last few years which were not countertops, which other places would have said no way.
You need to develop a relationship with them just like any other supplier. Price does not matter as much as a good install. But almost as important is being on time for templating and installation.
With my guys I know everyone in the office/shop/install crew, if there is a problem they they take care of it quickly. They have done many custom pieces for me in the last few years which were not countertops, which other places would have said no way.
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