More than floors: Adding up the value of add-on products
March 30, 2006
When he talks about his company's line of floor care products, Steve Naylor's does not stress the high profit margins they typically return. Instead, Naylon, the vp of sales and marketing for Namac Industries, has a sales pitch that he feels is sure to strike a cord with flooring retailers.
"I tell them if you sell the cleaning kit, you can make 10 bucks, but if you give them the kit, it can save you $300 or $400 and build your business through referrals," says Naylor, whose company markets the Woodpecker Hardwood and Laminate Floor line of floor care products. He urges retailers to educate their customers on proper floor care with each floor sold. At the same time, he says it is a perfect opportunity to curry their favor by giving the consumer something for free-like a kit that includes a spray bottle of Woodpecker Floor Cleaner and an applicator.
"If something is not right with that floor, even if it is because it wasn't cleaned and maintained properly, it is going to be the dealer's fault-in the customer's mind everything is the dealer's fault," explains Naylon. "But if you teach them how to take care of their floor, you can avoid getting a call because the floor doesn't look right a few weeks after the installation. You are not going to have to spend $300 or $400 on labor to fix a problem and they are also going to remember that you gave them something for free. They will tell their friends how well you treated them."
Ancillary items typically encompass cleaning and maintenance supplies as well as furniture floor protectors and decorative complements. While there is wide agreement that such products can fatten a store's bottom line in a number of ways, even those in the category note that it is a side of the flooring business that is frequently over looked and often under-appreciated. But even if they seldom add significantly to a store's total dollar volume, they are seen as a logical addition to stores positioning themselves as a destination center for flooring. The same mentality holds true for floor makers like Mohawk, and Milliken which market well established cleaning lines as an extension of their prominent brand names. (Or in the case Armstrong, a companion brand called "Bruce").
"It's not a large part of our business and I don't expect it to become a one, but it is one of the most profitable," explains John Van Hoy, owner of Carpet One Plus in Roxboro, N.C. "We include in each sale a product the customer will need, basically as a ‘freebie.' We have a P.O.P. display near the front door in plain ‘trip-over-it' sight and most of the customers will come back for more. That's what we want..
Still, like many retailers, Van Hoy admits that he does not have the time to dwell on the category and says he is "perplexed" by the many products vying for attention. "Everybody has something that is newer, better, safer, and on and on. We choose products that we know work from companies that have most anything we need."
Although cleaning suppliers have long been the dominant force in the ancillary market, manufacturers have worker to expand opportunities through other means. Anderson Hardwood, for example, introduced it's Medallion Collection at last year's Surfaces convention in Las Vegas. The large-scale, one-piece medallions are scaled to fit existing Anderson, Appalachian and Virginia Vintage planks, but are designed to require no special installation skills. The company says their innovative design allows them to be sold for half the price of other medallion products currently on the market.
"When most hard surface flooring retailers think about ancillary profit-centers, they focus on maintenance products or floor protectors," notes John Woolsey, Anderson's vp of marketing. "These can be profitable add-ons, and the return traffic they create may eventually lead to future flooring sales-but the sales dollars generated can usually be paid for with a twenty-dollar bill. We came up with an innovative ancillary profit-center that can easily add over $100 to a hardwood-flooring sale and deliver a hefty profit margin."
The 10 selections in the Medallion Collection are merchandised in full-sized, fine-art sample reproductions along with two actual quarter medallions to show construction. Woolsey notes that the display occupies about the same space as a display of maintenance products yet has the potential to generate a much higher dollar volume."
Clearly, those in the category have learned to focus on the retailer's big picture and how rheir product fits in. For its part, Bio-Pro Research, which markets the odor and stain remover product Urine-Off, says its 18 square-inch, in-store display can generate an annual profit of $6,000 if all 35 SKUs turn each month. While the company's vice president of marketing, Steve Moore, notes that stores typically sell about five items from the display each month, he adds that it often requires little salesmanship.
"Is it is self-explanatory," says Moore. "You just put the display in the store and when a pet owner sees it they know this is something they need to protect their floor." He adds that it is a good idea to suggest that the subfloor be treated with the product when old flooring is removed. "Your dog Muffy may love the new flooring but if there are traces of urine even in the subfloor he is going to detect that scent. That my encourage him to also leave his mark as well." He added that acceptance of the product is growing and noted that he recently finalized a preferred vendor agreement with the Abby Carpet co-op. He is also planning a booth at this year's Surfaces that is nearly twice as large as the company's previous exhibit.