As the outdoor living market continues to grow, an increasing number of contractors and retailers are realizing the upsell potential in providing complete or added elements to gain some of the market share of products or projects in demand. This trend provides an opportunity for distributors, retailers, builders and remodelers who want to expand their product offerings without adding any significant inner business structure. In addition to deck and rail, providing even a limited list of options such as grills, outdoor kitchens, flagstone, pavers, fire pits and fireplaces provides an opportunity for many to grow annual revenue without minimal internal changes. For vendors there’s an opportunity to provide the products and support for this growing group of customers. And, of course, there’s also an opportunity for additional profit.
Many contractors already have the business structure in place, so to expand and deliver paver options simply requires a basic understanding of the options offered in order to design, sell and coordinate the project. Actual work and project delivery can be done by using reliable sub-contractors. This allows for labor on an as needed basis and any costs are only present if a project is sold and built.
For retailers, there’s an opportunity to stock and sell the products needed by contractors and homeowners in a location that’s already set up for sales, distribution and delivery. That’s not to say lumberyards need to convert to stone yards and tie up acres of space. In many cases, just a short list of flagstone, pavers and retaining wall options can be stocked; There are many fire pits and fireplace kits that can be featured and sold from an inventory or special order as well.
Outdoor kitchen appliances and islands with a few display models can be brought in-house and displayed. The same goes for fire pits and grills. Many kitchen options are modular or in kit form. Many are simple to deliver and there’s profit potential for those that are willing to offer and handle them.
As a former contractor, I've experienced decking customers asking me where to buy grills, outdoor kitchens or who to contact to do some of the hardscape projects. I addressed the hardscapes and brought it “in-house” and would be considering the kitchen options if I still owned the company. Why not make the right connections for products and contractors, simplify the process for the customer and make money doing it?
From a retail standpoint, why not offer and sell these options to customers and refer them to contractors that do installations, just as you would building contractors? Why not convert part of a retail lumber sales floor into a mini showroom and have a short list of items in the yard.
Although most homeowners are willing to deal with more than one contractor, many would prefer to roll as much as possible into one package and work with one company that can provide or coordinate these services. This trend is growing and patios, pergolas, columns, pavers and other outdoor living components fit this bill.
It's been my experience that it's not as important to have large quantiles of numerous items as it is to have a few good quality options. Customers and contractors will choose from what's in the yard or sales floor in most cases. Special orders can always be part of the program.
Growth in remodeling and building often requires adding options that increase the sales numbers beyond what current offerings provide. Someone within the organization obviously has to become familiar and manage the aspect but this really is simple if you limit the number of options.
The key is to try not to be all things to all people or take on products or work that you are not comfortable quoting or delivering. In others words, limit what you are willing to get involved in based on how good your knowledge is and your people are.
With the growth and demand comes opportunity. There's a fit for many that have some extra space and are maxing out on building materials. Tap into at least a limited segment of a market you're missing by offering a short list of high demand products combined with a special order program that allows growth for both contractors, distributors and retailers. For contractors, being able to deliver decks, patios and limited hardscapes is a natural progression and provides a means of expansion with minimal in-house changes. Having connections and being able to facilitate grill or outdoor kitchen purchases and installations may offer just enough profit opportunity to turn an okay year into a good one. The same benefits apply to retailers.
For those that are happy where they are there may be no need for change. But for those that are looking for tweaks and areas to make manageable increases in offerings and profits, venturing into the outdoor market products and options arena, even if it's at a limited capacity, just might be worth considering.
Parks offers consulting for contractors and design service for homeowners anywhere in the country. He also speaks at contractor events and his most recent talk focuses on "Creating Separation." If you'd like to reach him, you can email him at email@example.com.