As the commercial market starts to heat up, contract dealers are finding themselves busier than they have been in the last few years, but the market today is different from the one before the recession. Prices remain elevated, and budgets and construction schedules are as tight as ever. Competition remains fierce, and it doesn’t help that, with manufacturers selling more product direct, contract dealers are increasingly forced to compete against their own suppliers.
The fundamental challenge facing flooring contract dealers is how readily, given the right circumstances, product is valued over service. The slow and unsteady recovery from the longest recession since the Great Depression has helped create an uneasy, nervous market. And the grim long-term outlook for energy and raw material prices has done little to buoy spirits. The pressure is on end users to make the most out of every dollar spent, and the hurt passes all the way down the line, through the general contractors, to the contract dealers.
The issue of manufacturers going direct has been developing for nearly 20 years. Before that, manufacturers treated contract dealers more like clients, and mill reps had close relationships with them. But the distribution revolution of the mid ’90s saw suppliers tearing down the old model and selling to anyone they could. What fell through the cracks was accountability—who was responsible for the finished floor?
When the manufacturers sell direct to the end user, the contract dealer is essentially brought on for the singular purpose of installing the floorcovering, and that can cause significant problems. There’s a lot more to a finished floor than just the installation, including a whole lot of logistics and timing, along with all the technical issues surrounding floor prep and specifying the right flooring product for the application. The only entity that has expertise in both product and process is the contract dealer, so when the dealer is only brought on as the installer, all the other elements of the process tend to get neglected, things don’t run smoothly, additional costs come up—and people start blaming each other.
However, as one contract dealer pointed out, these things often run in cycles. It’s likely that at some point one of the major mills will do the math and decide to no longer sell direct, setting up a trend for others to follow.
For the complete Contract Dealer Survey results, see the December 2013 issue of Floor Focus Magazine.