Monday, February 27, 2012

Words Used to Maipulate the Flooring Consumer


Words That Are Used To Manipulate Us When We Engage In A Home Improvement Purchase

The English language is an integral part of shopping and everyday commerce.  Businesses know and understand this well.  In fact there are even books written for words that can sell to you, the customer.  We may not pay attention to these words and you may be tricked by them into making a purchase that isn’t as good as you were led to believe.  So in the war of words, here is a quick manual for consumers when it comes to shopping for home improvement products.  Since I am a flooring expert I will correlate many words with the flooring industry, but I am sure you have seen these words and phrases used in other industries. 
The total number of words that are used in the market place far surpass what I will cover in this article, but the true purpose of the article is to get you to pay attention to the words that are used against you. 

Words that are used to mislead you 

Surplus: Something that remains above what is used or needed. 

Overstock:  to stock to excess. 

How many of you have seen signs for flooring companies or the company itself uses the word surplus or overstock in their name to sell their products. There is no such thing as surplus or overstock flooring.  With inventory controls and the high costs of making a mistake in ordering materials, who makes a big enough mistake where a store has thousands of square feet of flooring that is surplus? Every builder and home owner I know measure every square foot to the inch, so I know the surplus isn’t coming from them. When the US military says they have 10,000 boots as surplus I believe it.  But not when a flooring store uses it to promote the idea of discounts or cheaper pricing. How can a flooring company that buys containers of flooring direct from China or from their distributor knowing what they are buying (and in abundance) label their product a surplus or overstock? Where’s the surplus coming from? 

Seconds is a different story. Seconds in the flooring industry means there is something wrong with the flooring in so much that the manufacturer does not want to put their name on it.  Be it a color variation, twisted or not so straight boards, delamination and finish problems, the formaldehyde emittance is too high for industry standards (the glues to bond most plywood engineered floors emit this in low levels), the color changes color in the sun after time and so on and so on.  If you ask the sales rep why it is seconds the majority of the time they will say it’s a color variation because they really don’t know themselves. I wouldn’t believe it. For the headaches and not really knowing why something is seconds I would run away from seconds unless you’re a flooring expert. You will spend more money using flooring that is seconds than just buying the factory approved product.  I have known many contractors who have had to buy 150% or more of material just to finish one area as they had to discard material that didn’t lay straight. 

Factory Direct: Direct: proceeding in a straight line or by the shortest course. 

Factory Store: A store that is owned & run by the manufacturer. 

Distributor: A wholesaler who has exclusive rights to market, within a given territory, the goods of a manufacturer or company. 

Dealer: a person who buys and sells articles without altering their condition; trader or merchant. 

These are used all the time in the flooring industry.  Used and abused.  There are only a small handful of distributors that get their product factory direct compared to the number of stores that say they are selling to you factory direct.  The usual chain of events in a factory direct purchase should be: Manufacturer: Approved Regional Distributor: Flooring Store.  Only three Mark ups.  This is how I have positioned my company; http://www.californiasbestflooringcompany.com. 

When this phrase is abused you get: Manufacturer: Approved Regional Distributor: Another Distributor: Flooring Company: Smaller Flooring Store, Dealer, Builders: Fully five Mark ups!  Not every company or distributor can get every flooring product, factory direct. If they say then can then I would not believe it.  Manufacturers preselect who they want to distribute their product in a selected region.  That distributor then picks reputable companies in which to sell their represented manufacturer’s goods.  It’s a form of quality control.  So by the time your builder or installer tells you they can get wood flooring factory direct I’d need some proof. 

To follow the chain of anything factory direct you go to the manufacturer’s website and look for approved distributors.  Then you call the distributor in your area and ask them what flooring store offers the product you are looking for.  Some distributors are the flooring store thus being a one- two mark up. This is the most cost effective way. Work from the source out not start at the store and work backwards.  So the next time a flooring company or someone else claims to be a distributor, misleading you the consumer into thinking you’re getting a product direct form the source, verify this, contact the manufacturer. 

Outlet: a store, merchant, or agency selling the goods of a particular wholesaler or manufacturer. 

Wholesale: the sale of goods in quantity, as to retailers. 

As far as I know there is no such thing as a flooring outlet store in the true meaning of what an outlet is.  Clothing stores have outlets where the factory makes mistakes and the outlets then offer the products at a discount. For example Polo clothing and Coach Hand Bags have outlet stores that just offer their products. I don’t know of one factory-represented flooring outlet store; anywhere in California.  The next time someone claims to be an outlet then ask them why they carry more than one brand and which factory or manufacturer do they represent.  I can say with certainty that if you call a flooring manufacturer and ask them where their flooring outlet is in California. They are going think you are crazy; they may even laugh.  They are going to probably ask you if you mean distributor but an outlet and distributor are two different things. Bottom line is there are no factory direct flooring outlets in California. 

The word Wholesale is ridiculously over used.  Forget the word all together.  Flooring is sold per job pack, per pallet price, then container price, and then multiple container pricing.  Job Pack is usually under 800-1,000SF, Pallets are 1,000- 2,500SF depending on the material, etc. Containers are usually 9 or more pallets, and multiple containers reach up into the hundreds of thousands of dollars.  As a consumer, the best price you can get, call it wholesale, discount, whatever it is, is pallet pricing.  This is your commando word to fight the enemy.  You want pallet pricing on everything you can get since there’s no way you’re ever going to need a container of flooring with 20,300SF.  This is the term we use and so should you.  I don’t go to my supplier and say, “Can I get some wholesale tile.” I ask what’s the pallet price and how much do I have to buy to get it for xyz. 

Sale and Discount Teasers 

Save up to XX% Off!, YY% Discount!, Price Break! Price Blowout! Prices Slashed, One Day Sale, One Day Only, Giant Closeout Sale, Everything must go, We Must Move Our Inventory, Buy more save more, Huge Discounts, Buy One Get One Free, Store Wide Clearance, Liquidations:

In sales these are called teasers.  Whenever I see up to 50% off I think 50% off of what? One million dollars? Prices change for suppliers and costs fluctuate in the market. Yes, price increases get pasted on the public but not as extremely as some companies would make it.  I never really have sales as my flooring company offers just low pricing year round.  Here is the scenario and you tell me where the huge discount comes from:  The flooring manufacturer has a price that they set and sell to the distributors.  The distributors then mark it up with a little wiggle room to only those who buy bulk.  At this point this is a two markup scenario. If a flooring company is sharp, they find a way to be in this position.  If you as a consumer are dealing with, let’s say three companies that are in the three markup situation then how can one company offer a huge discount over everyone else when everyone buys form the same distributor in that area? They can offer a huge discount because they normally are over-charging customers to begin with.  This is why they can offer 50% off and still be profitable.  Discount only really truly comes into play in flooring when a product line is discontinued and the manufacturer is going to discontinue that product.  Even then you have to ask yourself why would they discontinue a profitable item. Is there something wrong with it? 

Going out of business sale

If a company is truly going out of business, wouldn’t you want a warranty on a product that you’re spending thousands of dollars on?  Some would say, “Oh well, in flooring you get it from the manufacturer for the product”. True, but trust me it helps when the person you buy the product from can help you get your warranty.  A flooring company that sells thousands and thousands of dollars of a manufacturers product can have some pull in helping you, the consumer, get your warranty if you come into problems.

If you’re making a large purchase, check to make sure the company is not in bankruptcy. (Store Wide Clearance=red flag)  Companies don’t have to disclose to the consumer they are in bankruptcy as it is public information and it is up to the consumer to do their due diligence.  If you do business with a company in bankruptcy or are buying from a store wide clearance sale, get your product on the spot--don’t wait for delivery or you may find your check cashed and store locked the next day.  Depending on where you live and the company is head quartered the bankruptcy court may vary.

I know this has nothing to do with home improvements but it’s my all time favorite.  Ever see the signs at pawn shops and other places that say, “We buy scrap gold.”  There’s no such thing as gold that is scrap; gold is gold.  The word scrap is meant to devalue the gold you are trying to sell so you get less than fair market value.  When they melt it down and reform it is it marked, “Previously Gold Scraps”. No it’s not! Try going to these places and asking them if you can buy scrap gold one oz bars. Somehow I don’t think they will give you a discount.
The financial and banking industries are examples of where you have to have a license or be what you say you are or you risk fines and jail time. The flooring industry in California and many other states do not have this federal regulation of checks and balances over the use of words to protect consumers. 

Remember: it’s ok to let words pique your interest in a product or service, but don’t let it sway you away from the most important aspect at hand: the final price and value of what you need or want. Every industry has its phases and words and they have a purpose.  Just verify the company you are dealing with uses the words to convey their correct position and meaning in the marketplace. 

Please visit www.californiasbestflooringcompany.com for all your flooring needs!