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Be creative

by Warren Tyler

When writing these columns the words of my mother come ringing through. Regular readers have read these so many times before: “If everyone is doing it, it’s wrong.”

Even though a recent Empire Today sale particulars are a complete fabrication, its TV ad showing a carpeted room with the homeowner saying, “I bought this much carpet, but I only paid for this much” (cut to a picture showing only 25% of the room carpeted), is creative, much better than the old 60% or 70% off.

For fun, let’s analyze this offer. Let’s say Empire pays 20% less than you and that a professional store’s typical mark is 50%. So on a $5 cost item, its supposed regular retail is 50% or $10, therefore 60% off would mean they’re selling a $5 cost item for $4. A typical small store may pay over $6 for the same $10 retail product. Any way you look at it, the ad is fraudulent, but remember Empire is the No. 2 carpet retailer so many consumers believe it.

Because the average specialty retailer tries to operate honestly, he is at a distinct disadvantage. Here are a few ideas to make money no matter what your cost disadvantage may be.

We once ran a time sale, no prices, no hype. We advertised that every hour starting at noon, marked items would be discounted 5%. People flocked in and took up positions by their selected flooring. It became a game of who could hold out the longest. At 15%, customers started dropping like flies.

A store I took over in South Portland, Maine, ran a Memorial Day weekend sale, when most dealers think people are at the parades and later cooking out. They aren’t; they are buying flooring. We invited a few radio stations to broadcast on location, brought in a few big tents, clowns, as well as hot dog and popcorn vendors. The merchandise was brought in on consignment from distributors so it wasn’t priced right, but no matter, for whatever reason a tent signifies a low-price guarantee. We cut the goods as they were sold, paying later. The result? A quarter of a million dollars in new sales.

My then wife managed a store in the small town of Exeter, N.H., and ran a July 4th sale when I thought everyone was cooking outdoors and swimming. The result? More than $75,000 in new sales.

Wouldn’t you think everyone would be hung over on New Year’s Day? Your competitors think this way. Be a contrarian and run a New Year’s Day sale—it will be your third biggest day of the year. What a way to kick off the year.

I stole a merchandising concept from a warehouse furniture store in which our customers could choose to make their purchase like they do at every other store—come in, select possible products, make an appointment to measure, place a deposit and we would collect the balance on install. Or they could buy “The Davis Way,” where we didn’t measure, everything was paid upfront and they set up the install.

We were a mid- to high-end store, but by the end of the first year, over 98% chose The Davis Way. The result, zero receivables, vastly improved salesperson/ installer relationships, no IRS problems, no measures and installers beating down our doors because the pay was higher, they got paid every day and importantly, complaints dropped 80%. I would explain the system to my competitors and most would ask why I was offering this information. My reply was, “You will never do it, because it takes courage.” The first person to adapt my concept was Dick McAdams when he started his GCO stores in the ’70s.

Be a contrarian. It works.