Economy help on wayHoneymoon is Over

I dated this girl once and I was so into her I couldn’t even see straight. Of course my family and friends tried to politely warn me that she was trouble – but hey,things seemed so great I didn’t have the time to listen. After the honeymoon period was over, I realized I was involved in quite the tangled mess to unravel myself from.

Kind of reminds me of the cabinet industry.

Volume was so high for a while there that we couldn’t even see straight. The honeymoon period was the big boom where consumers were pounding down our doors and all we needed were some order takers and some designs (or so we thought at the time). We wanted help from the manufacturers in the form of tools and training — but things seemed so great that we didn’t have time to listen. And the manufacturers, to be blunt, really didn’t give a crap (and neither did we) about helping us because their other channels kept them busy.

Now that the honeymoon period is over — we’re in quite the mess to try to untangle ourselves. We don’t have the tools and our people lack the training required to be successful. Oh yeah, and a good number of people have already been laid off and are probably in other industries by now.

But relatively recently, some interesting things began to change…

Other Manufacturer Channels Aren’t So Much Fun Anymore

In our industry, manufacturers predominantly sell through 3 channels:

  • Big Boxes (i.e. Home Depot, Lowes)
  • Direct (my blood pressure just raised)
  • The Dealers (Hooray for us!)

Since everyone wants volume so badly, the manufacturers have already begun dropping their drawers in a big way with the Big Boxes. Just go look at the pricing and special deals coming out in different months and one can clearly see some manufacturers are just outright buying the volume — probably below their cost in some cases. This creates an incredible downward pressure on price. And after some months of playing that game, we all know manufacturer executive teams must be thinking that competing on price really does suck — and its painful.

As for the direct channel, I read an interesting statistic from Lowe’s 2008 Annual report. It stated that “71% of Consumers say that if they’re getting bad service, they will walk out of a store even if it has the exact product they are looking for”. I don’t think that’s a unique attribute to a retail customer — I think that’s just being human. Give it enough time and eventually these customers will make their way back to us as they realize service really is what it’s all about.

Home Sweet Home: the Dealer Channel

This leaves me to Home Sweet Home: the Dealer Channel. The saving grace of the cabinet industry. So we’ve known for a while we needed help. But this time our cries for help in today’s economy are heartfelt — because we really need it. And we recognize and admit that we need it.

And, finally, manufacturers are listening.

The Magic of the Market Slowdown

Our industry has been hit hard, yes. But a very magical thing has occurred which otherwise would have gone unnoticed indefinitely, I’m convinced. All our weaknesses, inefficiencies and problems have been exposed in all their glory for all to see. We stand here with our pants around our ankles — some of our friends have lost their businesses and the rest of us have been humbled by all the “warts” we’ve accumulated over the years in our businesses. If only we had listened to our friends and families sooner about the crazy girl we were chasing (and ended up with)!

Of course your first reaction might be — “Why is this magical?”. Well, it’s magical because manufacturers have realized several important things (finally):

  • They realize now how much help we need — in training, technology and process improvement
  • They realize how bad the big boxes can hurt them
  • They realize the necessity and potential of the dealer channel
  • They understand that investments in the dealer channel have the best long term reward potential

What Does This Mean to Us?

It means, quite simply, that help is on its way. Manufacturers are investing in training, tools and creative programs to help us succeed — all with a long term eye on our success.

And that’s because the leaders who are doing this aggressively know that by equipping us with this now, it enables us to position ourselves to grab the lion’s share of the rewards later.

Sure it might be viewed by some as self-preservation — but it’s so much more than that:

It’s brilliant. 

And if I were you, I’d be doing my homework and teaming myself up those manufacturers now. Because any manufacturer not doing these things now just doesn’t get it — and never will.

So I’m reserving my hard-earned sales volume to reward only those long term partners who do get it — who are going out of their way to help me succeed right now. And you should too.