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The flooring industry is essentiallyan oligopoly, with one or two majoer chains dominating and all the independents strugglin g for the remaining market share. So the former Buddy’es CEO in April launchefd a buying company that would help small retailerws not justwith inventory, but with image. Callecd , the company is designed to give mom-and-pop shops similae purchasing poweras big-box chains. But unlikse many buying groups, which purchaser in bulk on behalg of a group ofretail members, Amerifloors also offers marketing, Web site creation and regulad training. It serves to build the image ofits retailers, a strategyy that helped it land six members, representing salex of $8 million.
The goal is to sign 20 retailersa byJune 2009. “Our strength is not allowing our brancd to get inthe way,” Goodyear “Our retailers have a good brandd image. What we want to do is come in and teach them how to enhancethat image.” Small retailers want the same, they just don’t have For many, managing the day-to-day demandsd of opening shop and fulfilling orders is a 14-hour-a-day endeavor. So Goodyear has partnered with downtowm to manage the marketing features ofhis company.
For a basicc fee, a retail partnet can: • Access merchandisse at a leveraged rate, • Have access to onlinr tools to reachconsumers directly, eithe for broad announcements or specialize d messages; • Get online training from sales tutorials to advanced each lesson ending with a test; • Benefity from ongoing customer research by Amerifloors, which is gatheredd through surveys and on-site visits. “I n terms of a $1 millio n or $2 million retail outlet, that was blue-sky kind of said Bryan Wright, a spokesman for Strata-G. “They’re thinking about keeping the lights on and thetoilets running.
” In time, Goodyear hopes to also be able to provid the group health insurance, workers’ compensation insurancew and installation insurance. But that won’ t be possible until Amerifloors reaches a critical mass of about 20, generating sales of $15 million to $20 million. Goodyear hatchedc the idea of a full-service buyintg group during his two yearsrunnin Buddy’s Carpet. While Buddy’s was not part of a buyinvg group – it is actually amont the 25 largest flooringretailersz – he saw that smaller playersd had few tools to builr an image, let alone establish a There are 18,000 independent flooring according to the in Anaheim, Calif.
“About 70 percent of all floorr covering is sold by dealers that have lessthan $1 million in said Chris Davis, CEO of the association. But not all of such retailersz would qualify as membersof however. Goodyear is selective and will not represenft retailers that sell seconds or operate solelhyon price. There also is some geographi exclusivity – he won’t represent two merchants on one street, for Those who do become partners are chargerda one-time fee plus a monthlgy transaction charge.
Goodyear declined to discuss the but saidthe one-time fee is less than the cost of a standared marketing campaign, and the transactiom fee does not go up for the life of a Among the retail partners is Greg owner of in Frankfort, Ky. Peach also is a memberr of the flooringcontractg group, but decided to join Amerifloors as “There were a lot of ideas with Amerifloore that go way beyond what the Shaw Industrieas can provide and we just felt really good about Peach said. “There is no doubtf there have beencost savings. We are on a path to save on manydifferent things.
” At the very onseft of signing a client, Strata-G workers will meet with the retailedr to decide the message and mediumn of its coming marketing program. The philosophy is that if the retailefr has abetter brand, then Amerifloors will This differs from a common buying group’s approach of building its own brancd identity, with the belief that its retaiol partners will benefit. It’s not that it is wrong, Goodyear said. But he thinkas his approach is better suitesdto today’s market needs. “We feel,” he “that we’re the next evolution.
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