Today the decorative plumbing industry has never had it so good. Business remains strong, and more importantly, more and more people are designing their bathrooms with the same vigor and attention to detail as they do their living rooms, kitchens and primary bedroom. Only a decade ago, that was just a dream. And, finally, full-pocket individuals, talented designers, top builders and most plumbers trust the plumbing showroom world. And do you know why? Yes, a large array of captivating product designs help. But, the No. 1, facts is… our products work. The basic lavatory faucet, shower and tub valving platforms work.

Take a moment and think about that.

Not only have the platforms become more reliable, with everyone using the same basic part configurations, those parts have become commodities and are relatively less expensive than they were in the 1990s.

Taking this a step further, I would say the same has happened with bathtubs, sinks, toilets and all basic components of all our 21st-century bathroom products. Excluding the cost of labor and price fluctuating commodities, our products work great and cost less to manufacture.

Yes, these are good times.

Even with all that goodness going on there are issues to be addressed. On the road, I constantly hear showroom owners and managers complaining about shrinking margins due to their competitors' lowball pricing and discount-happy e-commerce sites. With all this product stability, is the showroom business slowly becoming commodified? As design fast following is the rule of the day many products have become similar in look and function. One can see the day when, for every design, there are at least five manufacturers that offer a similar look in the same finish.

On a national scale, I see this happening but what is important is what is happening in your market. What do your targeted customers think and how it is playing out in your showroom?

So if everyone’s products are so similar, why are some brands so much more successful than others? Brand spiffs? Marketing? Plumber comfort? What brands are popular in your market?

Now is the time to run your vendor margin report for the last 18 months and learn which vendors are consistently delivering 35% margins and greater. Then look to see what your closing rate on quotes with those profitable brands.

In these market scenarios, each showroom has to be careful not to fall into the back hole of promoting and simply pricing RFQs for the same products as everyone else. These are the brands that are sold everywhere from big box stores to aggressive internet sites and every showroom in the market. Big branding plus over-distribution translates into market product awareness and consistently shrinking margins. Do you have this situation emerging in your market?

We must never forget that just because a faucet lists for $1,200 does not mean it will generate enough cash to sustain your showroom overhead at a 25% gross margin. Recently, business volume has been good, but if slips a bit, will your showroom business model continue to generate enough cash flow selling the popular brands with shrinking margins?

With all of the stress and success during the last two years, it has been easy to lose sight of what key lines are building your bottom line and helping your showroom remain unique in your market. Now is the time to run your vendor margin report for the last 18 months and learn which vendors are consistently delivering 35% margins and greater. Then, look to see what your closing rate is on quotes with those profitable brands. You are simply looking for a percentage that is better than your average quote closing rate. If all looks good here, we move to the final step and review each brand’s distribution and presence on the internet. Who else do they sell in your target market? Do they have an enforced MAP policy? And, what level of discounts does your market expect on these brands? If the profitable brands pass this distribution test, congratulations, you have discovered your future go-to product lines.

Now it is time to review that brand’s product mix and work with your team to create the best strategy to increase these brands' presence in your showroom, their brand awareness with your core customers and how your sales teams will work their products into their day-to-day sales presentation. In my next article, I will present ways to improve your salespeople’s brand focus.

In summation, the decorative plumbing world has become an integral part of the luxury and premium home and commercial design world and our stylish products work. All this has led to a larger and more educated market while offering easy entry for new distributors and product vendors. We have interesting times ahead and let’s make sure we are prepared for anything the world can heave at us. Who knows what is next? War? Volatile commodity markets? Inflation?

If you would like to discuss this in more depth, please reach out to me on LinkedIn, https://www.linkedin.com/in/jeffreyvalles.