Normally when floor covering sales slow down claims pick up but that can’t be said of 2007. This has not been a normal year. No real rise in claims. Only certain segments of the market have slowed and not everybody’s business is off and all the news isn’t bad. The commercial segment has been booming and the hospitality market has taxed the manufacturing capacity of the industry. Lead times for new carpet, especially custom orders, have extended to almost four months in some cases – a long time. The higher residential market is strong. The builder market has taken a dive but the multi-family market is up. Many of the suppliers in this market have seen the scales tip in the opposite direction saving what may have been a dire year.
Diversity is the key. If you sell floor covering you should be selling all types of products and with them rugs. I find it hard to believe that anyone who sells hard surface flooring doesn’t sell rugs since everyone who buys hard surface flooring buys rugs to go over it.
One thing we’ve seen this year in an increase in wood flooring claims. This is not because the wood is defective but because people selling it don’t understand the product. The biggest problem in the industry is not installation; it’s selling the wrong product into the wrong place and not understanding it. That’s what we’ve seen with wood. It’s being installed without regard for conditions that adversely affect it such as moisture beneath it, environmental conditions that cause it to expand and contract and thinking its concrete. It’s a tree cut into boards. It gouges, dents, scratches, absorbs water, expands, contracts, discolors and it can create a whole slew of problems for you if you don’t think realistically, which is why claims have increased with it. Most of the situations we’ve been involved in have not been the fault of the wood but the fault of ignorance about what it does and what will affect it. This is an indication that a lot of you have a whole lot more to learn about wood and that information is readily available – start reading it.
Prices have gone up and will continue to do so for all floor coverings. Manufacturing carpet for example uses a lot of energy. Synthetic fibers are derivatives of oil. When the price of oil goes up so too will the price of carpet. And all flooring products, which are heavy, are transported in big trucks almost all of which have diesel engines that get 4 to 6 miles per gallon. Have you seen the price of diesel fuel lately? This is why flooring prices are up but so is the price of everything else.
So the housing market is not that great but not all housing is off. If you have the money to buy, the housing market is excellent. Prices are down and so are interest rates. What’s happening now with houses and business is an example of Darwin’s Theory of the survival of the fittest. The weak flooring dealer will be culled from the herd as well and the most adaptable dealer will survive and thrive. You also have to get into the 21st century and use the technology that exists to make life and business easier and better. I can’t believe we still get calls from dealers who refuse to use computers. They call asking questions about things they could find on the Internet and by using Google. Some almost brag about still doing things the old way and then when you ask them how business is they’ll tell you it’s not that good and lament about competition. The competition is using new technology.
Speaking of competition, we have been so nauseatingly told that Home Depot was going to crush the independent retailer that the market lived in fear of them. Let me ask you this? Have you ever gone there to buy anything? Great if you know what you’re looking for, not so great if you need someone who really knows something about what you want. And floor covering has to be sold by someone who understands the product. They got in over their heads, now’s your chance to stagger them.
Thank you for all the kind words so many of you have spoken to me in 2007. I sincerely appreciate it. A special and sincere thank you to Floor Covering News for letting me write this column. 2008, I think will be a great year for the wise businessman if we all make it so.
Author: Lewis G. Migliore
LGM and Associates – The Floorcovering Experts