Can You Make Money With Wire Shelving?

A quick look at the business side of wire shelving. February 13, 2013

We have come across more and more jobs that the GC wants to install wire closet shelving. I'm looking to see what contracted installers are getting for installation. Are they paid by the foot or closet? Any help would be appreciated.

Forum Responses
(Cabinet and Millwork Installation Forum)
From contributor A:
Where are you located? Are you currently doing closet work or kitchens? Who are you seeing out there that is currently supplying it? In my area there are a few dominant folks providing it at (what appears to be) a "loss leader" price, usually because they sell other higher margin items.

From the original questioner:
We’re in the Seattle area and this pertains to commercial work in most cases. The job were on now has 30 dorm rooms with 4-5 closets each.

From contributor A:
My take is as follows; I have been in the laminate closet business for more than ten years. Our work had been primarily (here comes the overused phrase) high end homes. In our area this means $750K - $4.5M. Now business is struggling so we’re down more than 80% over two years ago. It's a very discretionary purchase and few people "need" a $5K closet.

In order to obtain an exclusivity agreement (I won't elaborate) we dabbled in wire shelving. I researched and chose to sell the "better" brand, and yes there is a difference. For years I was getting calls about the crap falling off the wall and I didn't want to sell the same crap. Ours cost around $.15 - $.25 more per foot and I couldn't sell it profitably. Remember, I carried the overhead of a cabinet shop and I assume others here are doing the same.

In our area, the folks putting the stuff in are/were getting $2.50 - $2.75 per foot ($2 or more was my material cost). They are typically the insulation, finish hardware, or glass guys. In each case, it seems that they were giving away the wire and making it on the other, more specialized services. You know, $4,000 for three pieces of glass but only $750 for all the closets in a $900K house. It turned out like this. If you could purchase enough (each order) to get pre-paid shipping, that's how much money you could possibly make on the stuff. If you had to pay for shipping, you've already lost money.

Also, keep in mind that one of the gigantic major manufacturers (and I hope I have my facts right) is owned by one of the biggest construction products holding companies in the world (Masco). They are or were going around buying up the service companies doing the low cost installations. So, they are controlling the manufacturing cost and the wholesale price, as well as the distribution and installation chain. Can you say collusion? I don't want to compete with that for pennies on a job.

So in conclusion, if I were to offer any help I would say be very careful before you offer this product. Again make sure I am answering specifically; they charge by the closet, that worked out to $2.50 - $2.75 per foot. At $3.00 or $3.25, I was told to "pound salt" by the builder.