TFC #45: Dealer Versus Homeowner Model - Part 2

This is part two of this topic on dealers versus homeowner models.

Read part 1 here.

Part 1 focused on a direct-to-homeowner shop switching to a dealer/wholesale shop.

This week, we reverse the roles and look at a dealer/wholesale shop switching to a direct-to-homeowner shop.

Definition

What is a dealer/wholesale shop?

This can look several different ways, but generally, a dealer/wholesale shop will do most of the following.

• focus on volume

• build cabinets off of order lists or drawings

• let the dealer handle all of the end-customer interaction

• build what the dealer has designed

• find ways to give dealers choices of styles rather than limitless options

Keys To A Smooth Transition

So for the dealer/wholesale shop that decides to switch to a direct-to-homeowner model, here are a few key things for you to consider.

Marketing and Branding Realignment

Shift from B2B (business-to-business) to B2C (business-to-consumer) strategies.

Revamp branding, messaging, and promotional materials to resonate with homeowners.

Before, you could rely on your dealer network to send you ready-to-build jobs; now, you need to be able to attract potential clients to your business.

Yes, doing good work will pay off, and people will naturally find you. However, that can be a slow process and not one that is predictable.

The first thing you have to get nailed down is who your customer is. Will they want modern, traditional, farmhouse, affordable, expensive, or unique cabinets?

It doesn’t mean you can’t sometimes go outside of that box, but your marketing and branding becomes much easier when you decide who you serve.

Once you can get a mental picture of what your ideal customer looks like, now you can focus on putting a couple of things in place to start your marketing strategy.

• optimized Google My Business listing

• a nice website

• post project photos. or style inspiration on social media

• collect reviews and show them off

• add branding to cabinets (drawer boxes, labels, etc)

Strategic Partnerships

As an addon to the marketing section above, you can give yourself a huge boost if you focus on developing relationships with key people in the construction industry.

For example, talk to realtors, contractors, builders, and other people in the process and offer them something in return for sending customers your way.

Strategic partnerships are the best way of getting customers in my opinion. It is the quickest way to see results and is often cheaper than other forms of advertising.

Customer Meetings

Homeowners who buy direct will likely want to come to your showroom and choose their colors and styles.

These meetings can take hours and feel like a waste of time.

However, this is an important part of your new business model. This is where decisions get made.

Find ways to make this experience valuable for your customers. Give them style suggestions and have a well laid-out showroom to be able to visually explain their options.

It works great to have their job designed before they arrive so you can impress them with photo-realistic renderings, walkthroughs, job drawings, and a clean proposal.

Pricing

Don’t sell cabinets for the same price you sold cabinets to dealers.

You are adding a lot of responsibility to your company, and that needs to be accounted for in your prices.

A lot of people think dealers mark up cabinets way too much, but you will soon find out why they do.

You now need to cover marketing costs, job measurements, customer meetings, endless revisions, and salespeople.

Conclusion

It is probably a little easier to make this jump to homeowners than the one I wrote about last week with switching to dealers.

You have less of a mountain to climb.

I don’t mean that this model is necessarily easier because there will still be plenty of hurdles for you to overcome when switching to a direct-to-homeowner model.

Thanks for reading,
Myron