The shifting US consumer savings vs spending rate is the major reason for the change in our industry.  The savings rate of the US Consumer is expected to double in this year and double again in 2010.  The US consumer has held up the world economy for the last 20 years with our spending.  The Pessimistic forecast is for the US Consumer to STOP Spending for a decade. I do not believe that at all. The US consumer will cut back and be more careful about spending money they do not have. A change is in the air. Consumers are getting wise to the "debt trap".  The dot Com bubble, now the housing bubble will bring us to reality again.  How will you deal with the new reality.

 

It is easy to see that the amount of projects will be less, it is up to you to determine the  size of your projects. The shift of less spending means that you the Kitchen and Bath designer and dealer need to make sure your Contract sizes are larger.   Be more Resourceful and Valuable to your clients! Increase your project size and profit margins. Ex: 60 Kitchens per year Averaging 15K in Cabinets Installed @ 40% Gross Profit will Gross approximate $ 360,000. per year in Gross Profit.  Increasing your Contract Sale by 10% per job at the same gross profit adds 10% or $ 36,000.00 in net profit.  How easy is it to increase a sale by 10%-VERY. Do more, offer more and that will add more to your bottom line. During these times the dealers that ADD VALUE to your clients will have more clients to sell.

 

Panic and Fear makes even the most savvy business person CUT, CUT, CUT.   Each customer that comes in the door is more precious, yet often when I am in the dealerships I often the same story I heard two years ago! " We do not do hardware, it is too much of a hassle".  Shifting your attitude about what you will and will not offer is critical to your success! Gain knowledge of how to specify, lighting, sinks, faucets, other accessories for the Kitchen and Bath Project your bidding on. Think OUTSIDE THE BOX! The more valuable you are to your customer, the more profitable you are! Kitchen and Bath Dealerships can no longer afford to stay the same, or do less and expect more!  Learn how to attend webinars, and other Internet seminars to increase your business acumen!  The US Consumer will never stop spending, however they are getting more savvy and spending money they have, instead of money they do not have.  If you change and adapt instead of panic, and let fear take over, then you can make the changes that are right for your business. Get some sound, non judgmental and unbiased opinions about the moves your contemplating. Remember, now is the time to get stronger!  During times like these-Amateurs Lower their prices, Professionals Increase their Value!