Showroom Location

      Cabinet and furniture makers discuss the value of a good showroom location, and the role of a showroom in the overall marketing strategy. December 20, 2005

Question
We want to open a retail store/showroom to sell our furniture and decorative accessories. Right now, we sell wholesale to other stores and do some contractual work for a large chain. The problem we're having with wholesale is our dealers take forever to pay us, they mark the stuff up too high and it doesn't sell, and we're replaceable. As soon as another company comes around with a similar product at a cheaper price, we are out of luck.

How many people out there have showrooms at their manufacturing facility and how many have free standing showrooms, say in a shopping center? Our shop is located just a few hundred feet off the busy main street (32,000 cars per day). The thing is, my lease rate here is $2.95/sf and the shopping center across the street is asking $14.00/sf. I know we would have better visibility and presence in the shopping center, but is it worth almost four times as much a month? Also, if the store is in our building now, I won't have to hire extra staff to man it. Logistically, it would make sense. What would you do in my situation?

Forum Responses
(Business and Management Forum)
From contributor J:
A few hundred feet? It might as well be a few hundred miles. In retail sales, location is everything. I am in a similar situation. I could have rented the building next to my workshop, but it would have been a waste of time. The reason why space in recognized shopping areas is so much more expensive is that it is worth it. I am trying to find a way of renting a store in a nearby town. If I can get one, and find the money to open and staff it, then I will be okay.



From contributor T:
I have run both, a retail showroom separate from the shop and a very nice, large showroom at the back of the shop. They were equally successful.

The separate shop was more expensive to run, subject to ever increasing lease fees, but still I was able to increase the physical space as soon as it became available, eventually renting the entire third floor in our local design district.

The clients claimed to like the sawdust on their shoes, but subject to insurance rules, they were really not allowed to roam the factory. The bigger clients liked being able to see the vast investment in equipment and personnel. It seemed to put their minds at ease about our ability to handle very large projects.

There really seems to me to be no difference as far as obtaining real orders. The only lesson learned from all of these experiences is that renting instead of investing your resources in your own property is a huge pitfall and will never work out for you. It only works out for the landlord, and if I had it to do over again, I would not have rented anything.



From contributor J:
The thing about having a showroom attached to a shop which is not in a shopping area is, how are your potential clients going to know you are there? Advertising will be necessary, and it requires quite a motivated client to look at an advert and decide to pay you a visit. It will also require a lot of adverts to ensure that the people you want to see the advert actually see it.

Most shoppers don't work that way. They go where all their familiar stores are. As far as buying property is concerned, that's great if you can afford the down payment. I don't know how it is over there, but in the UK, you will need to put down at least 20 percent of the 'bricks and mortar' value of the premises. Then add the cost of setting up the showroom.



From contributor D:
I don't see anything wrong with having a storefront where your shop is, especially since it is only a few hundred feet (a block or two?) off of the main road. Either way, if you don't have a marketing plan that gets your ideal customers in the door, you'll just be wasting money.

In this case, if I did do the store-in-shop thing, I would concentrate on direct mail ads to my ideal customer, telling all the benefits they'll receive from owning my furniture and giving them a direct call to action. There are some very good marketing materials out there to help you come out on top. Marketing is the key. Shop owners who are or hire master marketers can virtually create income at will. Those who don't invest the time and/or money to learn marketing will lose market share to those who do.

To sum up, If you have a marketing plan based on sound principles (you should be able to track every dollar spent on marketing and how much it costs to acquire a customer), then either having the store at your shop or in the shopping mall has a good chance of being successful.



From contributor B:
One point about high traffic - is it shopping traffic or commuters? I have 30K cars by the showroom a day, and in 2 1/2 years, no one has bought a thing due to the location - they just want to get home!

If you are at your shop, how many tire kickers can you stand per day? We set our showroom by appointment. We are flexible with times and close 80% of the projects that we bid with good margins. We use small local newspapers instead of direct mailing and we write a bi-weekly column in 3 papers (same column) and are becoming the local expert on cabinets - it is all about selling yourself.

Whatever you do for marketing, be sure to do good tracking of where the business comes from.



From contributor J:
"Marketing is the key. Shop owners who are or hire master marketers can virtually create income at will. Those who don't invest the time and/or money to learn marketing will lose market share to those who do."

This is very true, and I totally agree with it. One thing to bear in mind, though, is that if your showroom is located somewhere other than in a recognized shopping area, then you are going to spend a lot of money advertising people into your showroom. You will need to learn marketing, and you will also need a good-sized advertising budget. There's an awful lot of advertising out there clamoring for the customers' attention, and if you want your adverts to be noticed, you will need to spend some money.

If, on the other hand, you are able to get a store in a shopping area, then you can get some customers, maybe even enough, with no advertising at all.



From contributor R:
Rule #1 of retail business: It pays to advertise. Doesn't matter if it's a can of soda or a night stand, you will have to do some form of advertising to tell people about your store. We run a successful factory store in our building. We build solid wood furniture. We, too, used to wholesale to other stores. We sell our furniture to the public for mostly the same price as our dealers used to pay. If you want to be successful selling furniture in today's climate (all the imports) you have to be focused on providing the best quality possible at the lowest price possible. We have found that you can sell anything if the price is right.


From contributor T:
Advertising is definitely necessary. Most large newspapers have a "Home and Design" section. Invite the writer over to your place of business for a tour. You will definitely get your money's worth. A pro layout in a glossy magazine shot with a pro photographer can run easily $25K for a full page (with copy), but the first customer that you sign up from this type of ad pays for it. Also, contact some pro publicity people to write glowing things about you and your company. Believe me, you can not write these things about yourself, so it is another place that money is well spent.

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