Area Rugs & Hard Surfaces Sales - December 2007

By Sonya Jennings

When a retailer sells a hard surface floor, selling an area rug to go with it should be easy. It’s a great way to satisfy customers, make money, and generate repeat business. It keeps the customer in your store buying more than she would have otherwise, and it saves her an additional shopping trip. These customers are also likely to buy several rugs over the lifetime of a hard surface floor.

Before entering the rug business, it’s important to learn from those who have had success, because this business is very different from other types of flooring.

We’ve done some homework for you by interviewing flooring retailers who have been very successful selling rugs. Sharing their insights are Bruce Odette of Carpet Exchange in Denver, Colorado and Alan Clark of Clark’s Building Materials in Hot Springs, Arkansas. These retailers have been selling rugs for a combined 25 years. They both agree that entering the rug arena involves risk that will be costly at first, but it has the potential to pay off with high profit margins. The average margin on most area rugs is 50% to 60%, so the risk is well worth it. And to top it off, there’s no installation or paperwork—it’s just cash and carry.

According to Clark, “When I found out that 80% of people who purchase a hard surface floor buy a rug within two weeks, a light bulb went off. It just makes sense to sell rugs.”

Selection must be varied
When Alan Clark began selling rugs more than ten years ago, he wasn’t aggressive enough. He placed one 5x8 rug display containing only one manufacturer’s rugs, and he waited. When that didn’t work, he conducted his own research and decided to add an 8x11 rack. Soon he discovered that having a healthy selection of large rugs attracted customers.

In much the same way, Odette began with one 6x9 rack and one 5x8 rack. He also learned that this wasn’t the way to sell rugs. Once he made the decision to put in an 8x11 rack, sales went up and he realized that large rugs must be shown to attract customers. “The biggest mistake that people make with rugs is to place a 6x9 rug rack in the corner with 40 rugs on it and expect to sell rugs,” he says. “They’re not offering large rugs or enough design and color selections.”

Beginning with a varied selection of large rugs is expensive. Odette suggests looking for vendors who will help diffuse upfront costs with payment terms. There are payment plans out there—just ask the larger vendors what kind of financing is available.

When showing a large rug, place a tag on it that shows the other sizes offered for that particular style. In this way, more rugs than one are being shown without taking up additional space.

This is a fashion business
If you don’t have anyone on staff specializing in design, Clark suggests looking at the “top sellers” list of your supplier to help you choose what to offer. The key is to always anticipate new trends, designs and colors. Trends and colors change fairly often. At least every quarter, if not monthly, the person responsible for ordering rugs must check to see what new things are available. This is a step that many don’t take. Rugs are ordered and re-ordered without considering what’s actually in style at the moment. Your selection will become dated very quickly without constantly rotating in new styles and discontinuing old ones.

According to Odette, “Rugs are like a picture—if the picture is right, the rug will sell. If not, it won’t.” So, your store must offer the in-style picture for your clientele.

The most popular styles will eventually become clear, and choosing rugs will get easier. Each area of the country gravitates toward a particular look, whether it’s modern or traditional. Within that broad category, you must have what’s hot at the moment. What’s modern today may look different in six to nine months. In total, you must offer some of all style categories, but your inventory can be weighted toward what sells best. Odette adds, “Be ahead of the curve on trends, colors, and designs—constantly evaluate your selection and discontinue non-sellers.”

Because this is a fashion business, all salespeople must know how to sell rugs. Many rug vendors offer some type of training. “Everyone on my sales team knows how to sell rugs,” Odette says.

Be known as “the place” to buy rugs
Building a reputation as a rug store takes work, but it’s what brings traffic through the door. There are many different ways to create a reputation. Odette has a commercial on local TV that only promotes his rug business. “You must have high traffic in your store to sell rugs,” he says. “Find a way to bring people in.”

Speaking to interior designers is very effective in building rug sales. A promotional mailer to local designers can pull them into your store. Or simply build a relationship with any designer who walks through your door. In order to keep designers coming back, you must show current higher end styles. Clark’s Building Materials also places rugs in builder spec homes with a store tag in the corner of the rug. Again, this delivers the message, “The place to buy rugs.”

Clark encourages business owners to get creative. One of his best promotional ideas involved the local home show. He and his staff disassembled his 30-arm rug rack and reassembled it in his booth. It was a labor-intensive process to say the least, but the rug rack was visible from across the showroom. This brought lots of traffic to his booth, and he sold several rugs that day. But more importantly, it reminded attendees that “Clark’s is the place to buy rugs.” Now he attends every year. “If you’re willing to work harder than everybody else, you can be successful at anything…this includes selling rugs,” he says. All year long, he sees customers who are looking for rugs in his store because they saw his display at the home show.

“We’ve built our rug business to the point where people are coming through the door specifically for a rug, and they end up buying hard surface flooring from us at some point in the future,” Clark says.

Let them take it home
At Clark’s Building Materials, customers are allowed to take a rug home to try it out and see if it will fit the size and style of a room. The customer provides credit card information, and out the door the rug goes. Customers keep the rug 80% of the time. Just knowing that they aren’t required to keep the rug makes them more likely to try it. The room usually looks much better with the rug, so it stays.

Odette and Clark both offer a coupon for a discounted rug with the purchase of a hard surface floor. Considering that a hard surface customer is likely to buy a rug within two weeks, the 25% off coupon makes it far more likely she’ll buy the rug in the same store.

Distinguish your store from the big chains
Most machine made rugs are sold at the big chain stores, so make your selection unique. Odette offers rugs from the major suppliers like Shaw and Oriental Weavers, but he also mixes in rugs from small up and coming companies that offer unique styles.

Clark points out that most designers won’t shop at big box stores because they don’t offer high end rugs. He mixes high end with the mid to lower priced rugs. This raises the value of all the rugs. “A customer would much rather tell a friend that she bought her rug at Clark’s than a big box store,” Clark says. “By offering high end rugs, it brings up the value of even the lower end selections. When you offer a $5,000 rug in your store, it makes that $300 rug look better.”

Final thoughts
Many retailers want to offer rugs but don’t believe they have the space. Cutting down on carpet displays and adding a rug display can definitely pay off. According to Clark, “If you’re not offering rugs, you’re missing the market.” At Clark’s, rugs now make more money for the store than carpet.

Odette offers this general advice: “Bring a high level of commitment. Learn along the way. And don’t give up before you learn what works.”

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