Since the end of the “distribution revolution” in commercial carpet from the mid-1990’s, several manufacturers have slowly attempted to develop internal project management and estimating teams to simulate the services offered by a professional flooring contractor. This is rarely seen with manufacturers that offer differentiated products or compete on innovation. This simulated service strategy is most often seen with manufacturers that have allowed their business to devolve to price due to overcapacity, lack of innovation, or protect vulnerable commission sales associates. Lack of product differentiation forces end user decision making to price. Large end users can be very aggressive in asserting their will in the buying process and unsophisticated companies fold up under the pressure.
Manufacturers have attempted to mitigate the margin erosion associated with lack of innovation by slowly abandoning value enhancers such as wholesale distributors. This was an attempt to pick up margin, but it has also failed over time. Manufacturers have also attempted to fill the void left by lack of sales effort on their products by taking on more services. Purchasing services from a company so focused on manufacturing to earn revenue dramatically increases the internal risk an end user takes on for interior construction. By eliminating the general contractor as well as independent experts, such as interior designers and the professional flooring contractor, the end user is removing their protective levels of assurance.
Professional flooring contractors drive discretionary business and protect specifications of aligned manufacturing partners. When manufacturers invest in the services model, rather than product innovation, they jeopardize long term recurring revenue and lose brand trust from loyal contractors and sales multipliers such as wholesale distribution. This effort has a poor return in the focus on low profit margin clients focused on material pricing alone. Over and over these situations eventually fall back to a professional flooring contractor to reclaim the relationship, protect the manufacturer, and deliver real value to the end user. Every manufacturer and end user wave of projects has a beginning and an end, but the professional flooring contractor has always been there to take care of both stakeholders – Partnering For Success!
Who Actually Does the Work?
A direct purchase from a manufacturer requires a subcontracted installation and some level of remote project management, as most end users operate outside of China and/or the state of Georgia. The centralized teams working for the manufacturer cannot physically attend project meetings, walk jobsites, or manage local issues with employees. They must rely on local support which often is a professional flooring contractor such as a Starnet member. The available local subcontractors, often savvy businesspeople, increase material quantity estimates to make the installation job easier. The result is often more flooring is ordered than necessary. In contrast, professional flooring contractors incorporate on-site inspections and analysis of prints to determine the correct quantity for the job and any anticipated accessories to problem solve finishing details.
Overall, material estimates and installation prices by a subcontracted installer can be significantly higher per square foot than when estimated as part of a professional flooring contractors comprehensive estimate. There are two reasons for this. A full-service professional contractor who mixes hourly labor or dedicated independent installation teams for labor gets better ongoing pricing than an opportunistic manufacturer who can only offer work occasionally. Also, any intelligent businessperson running a subcontractor operation who only provides installation will have to charge more per installed unit (or compromise standards) because they are not realizing a profit on the materials which help cover overhead expenses.
Appropriate Product Selection and Layout
Product choice is extended and systemized with a professional flooring contractor. These professionals work to find the best products and value enhancements from all available sources, not just the limited selection of one manufacturer. As the breadth of the offerings from manufacturers continues to expand through the industry consolidation, the same intensity has diminished certain product groups.
The correct product choice is an important cost-saving factor for the end user. Layout of the flooring material as well as the related accessories are equally important. A professional takes the time to layout, present and approve every detail for specific reasons. The right flooring product matched with the appropriate accessories can minimize maintenance costs and extend the time between flooring replacement. A proper site analysis can take into consideration current and pending regulation compliance and the specific compatibility of product construction with knowledge of local norms and business climate. The value of this contribution may increase product lifetime by as much as 50%.
Protecting the Flooring Investment
Handling, delivery, and warehousing have costs associated to mitigate the endless list of limitations that most manufacturers use to excuse any site related conditions. Common issues such as too much heat, cold, humidity, or sunlight are expressly limited because they destroy the value of the manufactured floor before placed in use. The limited warranty is the primary reason professional flooring contractors remain indispensable to the manufacturer and end user.
The installation contractor protects the flooring from the real world abuse the products cannot tolerate per their written installation instructions, such as temperatures above or below 70 degrees or any interruption to the HVAC system. The handling and possible redelivery of the product, including where and how the products are stored, moved from the loading dock to the actual point of use often requires utilizing special material handling expertise.
The passion professional flooring contractors show to get every detail correct and work through projects as systems of success is invaluable. In addition, professional flooring contractors handle other aspects of installation from demolition and disposal through the final clean-up as enhancements to the products to realize value. In a direct sale these elements are added as necessary expenses, and not viewed as value, but as obligations.
These expenses are included when a professional flooring contractor handles the job on behalf of a manufacturer, but not in a direct sale. Very few construction projects proceed on schedule, the flooring often needs to be stored until the building or the end user associates are ready. As unreasonable as those requirements sound, every manufacturer expects the installation teams to protect their delicate products from the realities of a construction site and construction schedule.
When an end user assumes these responsibilities by purchasing through a manufacturer, it can increase the cost per square foot dramatically. Managing a flooring installation project can require 6 to 12 hours of management time per 10,000 square feet depending on the complexity of the project. This time is spent arranging deliveries, planning the installation, scheduling elevators or cranes, verifying material arrival, monitoring job site deliveries, overseeing actual installation and inspecting the final result.
The management experience of a professional flooring contractor has a direct impact on installation efficiency. Frequently, the difference in experience between a well-rounded professional flooring firm and the subcontractor hired by the manufacturer or end user can double the management hours necessary to oversee the projects from Georgia. As a result, the end user may recognize significant additional costs.
When installation problems due to site conditions occur, they can result in large time and subsequent financial losses. Insurance is a necessary precaution. Qualified flooring professionals provide two kinds of insurance.
The first protects against theft, damage or loss of the flooring while being transported from the manufacturer. Once the flooring leaves the manufacturers warehouse, their risk profile falls dramatically, and the flooring contractor or end user takes on the risk. Read the warranty limitations and it is clear almost nothing is covered by the manufacturer of the flooring product. The risk is taken on by the servicing flooring contractor on behalf of the end user.
The second type of coverage is the service the dealer offers that compensates for unforeseen circumstances. If the flooring is lost, damaged or misdelivered, the flooring contractor handles the insurance claim, reorders the materials from the producer and expedites shipment. If there are problems with product appearance or performance, the flooring contractor works with the producer to resolve the situation, freeing the end user from an additional management process. In the past few years, manufacturers have routinely sent dyeing services to sites to manage shaded carpet and asked flooring contractors to sort through thousands of cartons of poorly manufactured resilient material to find quality products to keep projects moving.
While insurance is not an exceptional burden to a qualified flooring professional, who typically carries a policy, an end user’s premiums for a one-time insurance policy are considerably higher. Ignoring the need for insurance only compounds the end user’s risks. This can add significant costs to a project as a standalone purchase.
Proper maintenance will contribute years to a floor’s life and considerable value to the end user. An extra year’s life for a carpet expected to last 10 years represents a 10 percent increase in value. A six-month extension on a 12-year expectancy is a four percent increase. A significant portion of a floor’s value can only be measured after installation.
Producers manufacture and supply the necessary product, but on-site assistance is not practical without involving local service providers as subcontracted providers. Qualified professional flooring contractors often provide recommendations and continuous service that assists the end user in maintaining the floor appearance and performance over time. These services translate into extending the value and an additional savings for the end user in replacement, brand experience, or business disruption mitigation.
What’s the Impact?
- Working in partnership with a professional flooring contractor mitigates complaints to the manufacturer so they avoid that uncomfortable conversation around the Limited Warranty.
- The professional flooring contractor follows the manufacturer’s recommended installation procedures and owns the handling, storage, and site conditions completely excluded from the manufacturer’s warranty.
- The professional flooring contractor assumes liability of the general contract, materials, documentation, and compliance with federal and local regulations.
A well-qualified professional qualified professional flooring contractor such as a Starnet member offers comprehensive accountability that addresses many practical issues of the modern construction process, either bid through a general contractor or negotiated. They have a vested interest in the client’s long-term needs and satisfaction. A professional flooring contractor works to the advantage of both the end user and the manufacturer. The manufacturer produces a variety of quality products, but the professional contractor provides the knowledge and services that enable the value proposition of a manufactured SKU, fulfilling a real and perceived long-term value in the marketplace. This relationship is fundamental to Partnering For Success!