Why would an independent retailer want to join Flooring America? That is the question NFT recently posed to members of the group through an informal e-mail survey followed by a series of interviews. The answers were to the point: Overwhelmingly the members we spoke to said the co-op fattens their margins, sharpens their focus and gives them the buying muscle they need to stay competitive.
The informal survey also indicates that the 575 members see their alliance with Flooring America as bringing less tangible benefits that are just as vital to their business. In addition to supporting members with training, membership gives them new avenues for networking with peers, The bottom line: Members agree that the programs offered by Flooring America give locally-owned one-store operations a fighting chance against much larger competitors including Home Depot.
Of course, when retailers align themselves with a co-op, some adjustments are inevitable. Because the members agree to adhere to the group's bylaws, sooner or later they might be called on to upgrade the look and feel of their stores. It's a process that can lead to some soul-searching, says Ed Cross, president of Ed's Flooring America in Plaistow, N.H.
"Some retailers might say, ‘I'm not sure I want to throw my racks out'," Cross says. "My advice to them: just back the dumpster up to the store and throw everything away. Then move on to the new, uniform system. Consider it the cost of doing business. When I joined, I closed my eyes and I threw everything out - thousands of dollars worth of displays. But it's the best move I've ever made for my business."
Cross, who has owned his store for 23 years, joined Flooring America four years ago. He is perhaps more passionate than other members about the extent of the overhaul needed. Still, his enthusiasm is shared by many other members who see Flooring America as a way to improving their store's performance. Members generally agree that the co-op has made a significant difference in their bottom lines.
"Using the combination of better buying and Flooring America's pricing and commission strategies, we have been able to improve our gross profit margin by six points in less than two years," says Randy Wood, owner of Flooring America store Wood's Village Carpets in El Cajon. Calif. (According to Flooring America, around 20 percent of members do not use "Flooring America" in their store names.)
Wood, who joined the co-op two years ago, notes that Flooring America has given his business greater leverage with mills and suppliers. "Suddenly we have a big brother to back us up when things seem stacked against us little guys," he says. "We get to see the best products from all kinds of manufacturers who may not have come to us otherwise because of our small size."
Asked what compelled her to join, Sue Hall, owner of Flooring America of Switz, Ind., quickly offers a laundry list of compelling reasons. Hall, who joined in 1994 when the group was known as CarpetMax, says the benefits of membership touch on every area of the business.
"[It includes] programs for training, advertising, pricing information," she says. Flooring America also offers "a well-planned product mix, a networking program and a go-to person for answering questions and addressing problems," she adds.
For his part, Kelby Frederick, who also joined CarpetMax in 1994, points to the Neighbor Network program which encourages members to share their knowledge.
"Every facet of my business today is based on another dealer's success - everything from commission schedules to customer service issues," says Frederick, owner of Flooring America of Denton, Texas. "Instead of wasting money trying to reinvent the wheel, we are able to find someone who is an expert in a particular area of business and call upon them for advice. This not only saves us countless thousands of dollars, it gives us the ability to make changes in our business and implement them immediately, without the growing pains."
Another retailer from the CarpetMax days, Howard Stein says that Flooring America's desire for input from members is a key reason why the co-op is so important to his business. "It's a very personable group, and they're right in the trenches with their dealers," says Stein, the owner of Eddy's Flooring America in Worcester, Mass. "In everything they do they have the dealer in mind. The membership is involved in all aspects of Flooring America - we truly know in what direction we're heading."
Scott Steel, owner of Flooring America - Bay Area Houston in Webster, Texas, echoes those sentiments, saying that the power in the group comes from the fresh insights and ideas from members coupled with the industry know-how from Flooring America's corporate staff.
"As long as Flooring America keeps listening to their members, as long as they stay member-focused, we'll be taken care of. I truly believe that with the support they give us and the way they listen to us, we're the best group out there," Steel says.
Joan Cocuzzo, owner of Flooring America of Franklin, Mass., says that the networking opportunities are a big plus for her business. "Being able to talk to other dealers has been invaluable to me," she says. "We are all living through the present economic situation, the industry reorganizations and the consolidation of mills. And we can talk about it and see what it means to our businesses."
There are also those who recall how Flooring America helped them navigate through tough times. Lee Horwitz, owner of A&M Flooring America in Fresno, Calif., for example, says the co-op was instrumental in helping his business when it hit a financial wall.
"We had a tremendous shrinkage problem a couple of years ago," he says. "It was a seven-digit problem. As soon as we were able to figure out what was going on, Evan [Hackel] and Vinnie [Virga], at the time the president and vp, came out and gave us some immediate advice on how to tighten up."
Horwitz notes that at the time his company was losing so much money that "we had to sell a building to pay off the banks."
"Indeed, everyone's job was in jeopardy," he says. "But Flooring America came out and laid out a plan to rescue us. There's no two ways about it. Flooring America helped save our company."