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Volume fabricators typically deal with a home center or work with dealers and sell wholesale. When home centers drop prices, someone has to suffer and quality is the easiest to compromise.
The other issue is fabricators don’t know how to run a business and on the flip side, business owners don’t know how to fabricate.
Volume owners are focused on output which leads to higher profit. These owners don’t know what quality is because they don’t know or understand how to fabricate. If you saw a Yugo and never saw any other vehicle, you would probably thing the Yugo was a good car, it is better than riding a horse. I think this is in many instances what happens to large volume shops.
Fabricators are great at making quality tops but don’t have a clue how to run a business. Just ask them and they will tell you that running the business side of things is the most stressful part of being an owner.
My point is this. When volume increases and profit margins decrease, the first thing to go is quality. Now the quality that is sinks to may be acceptable, but it will still suffer.
Over time as the quality suffers, you will begin to lose work because the word of mouth referrals will dry up making it more costly to acquire new customers.
Just my two cents, I could be wrong.
Andy
Andy,
I invite you to stop in whenever you get a chance. We are 90% retail. We can’t get away with dropping our quality standards. We don’t sell any box store work.
In the last three years, our volume has gone up and our prices have gone up. It can be done!!
I don’t think you can generalize that volume shops produce lower quality work than small shops. Nor can you say they are not as well equipped to “customize” jobs as a small shop. I have worked with some very large shops that produce incredible quality counter tops, and I have seen some small shops that couldn’t produce a quality straight counter.
Most times it’s the equipment that allows volume shops to produce better quality at a lower labor cost. There is a large, big box shop here in Az that I would put up to any shop in the country as far as quality and the ability to build custom Solid Surface counters, and they make money. They also “do” quality commercial work and typically are among the lowest bidders.
But, they are also some of the best business people I know in our industry. Perhaps a more true generalization would be, the better business people run the better shops, regardless of size. Though most good business folks build a larger business than folks who are good fabricators but lousy business people. But when you have the combination of both, business and fabrication knowledge, it is almost impossible to beat that combo, regardless of size.
Miles, I am not doubting you. I am just speaking in general terms.
I was talking with a large fabricator in the area and he said he was excited because he was able to match the quality of a small shop and offer his tops at low prices.
He invited me to his shop and I was able to see first hand what type of quality work he did. It was crap at best and that is being generous.
Quality is subjective and many companies don’t even know what quality looks llike.
Yeah, volume is bad. You guys should stay small and forget about increasing volume.
(volume fabricator mind trick:) This is not the business you are looking for….;^)
It is true that large shops can put out quality products, and they can also fabricate highly customized one-off jobs as well. I stand by that. It is every bit as true that the folks running the large volume business have a different mind set than the small, and it often shows in fabrication.
A large volume shop must standardize as much of the fabrication routine as possible. If not, you are not dealing with a smart businessman. The smaller shop is not as reliant on this, though it is not bad to standardize some of the procedure. For instance, a large shop may have twenty routers all set up with a different router bit, so the fabricator can simply grab it and route. Smart business, good fabrication. The smaller business may not be able to afford that, so he has to change bits more often. Advantage larger fabricator with no loss of quality UNTIL the customer wants the twenty first router bit profile. The small shop now has a wrench where they know it sits and router bits in the custom made bit drawer. Advantage smaller but more versatile shop. The more you have standardized procedures, the more it will cost to alter those.
One thing that cannot be denied is the power of volume buying and production fabrication on a production job. Those times I refer to myself as Len Smith and smile all the way to the bank.
Posted By Len Smith on 05 Apr 2012 12:47 AM
Yeah, volume is bad. You guys should stay small and forget about increasing volume.
(volume fabricator mind trick:) This is not the business you are looking for….;^)
LOL very funny
.
Wags hit the nail on the head. Big or small, it’s getting more and more important that you focus on the business side of things. And Tom makes a good point too. For us, it’s all about standardizing everything and having processes for everything. But we also have a process for custom jobs too!
“Big or small, it’s getting more and more important that you focus on the business side of things.”
Unfortunately, that is the case.
With increased competition, inevitably leading to decreased prices, comes decreased flexibility and greater reliance on a la carte pricing. We are one of the pricier top shops, until you see what is included in our numbers. Any edge style within reason is included. Any splash height up to about 6″ above deck is included, etc. Almost everyone was like this in the older, greater mark up days, because flexibility were built in to the price. Nowadays, we have to explain why we are different than the home center in that measurements are included, tear outs as well, radius corners bear no extra charge, and if my guys are installing and need to make a decision, it is based on getting the best result, not the fastest time.That type of attitude was standard. Now, with everyone’s eye on efficiency, it is not so anymore. Everyone makes a big deal about how important efficiency is now and they are absolutely correct, but let’s not forget what we’ve given up. Everything has a cost.
Ultimately, there is a big difference between a big shop doing custom work and a custom shop doing custom work.
In reality aren’t most tops, or at least most parts of most tops standard? Build up is build up, no matter how deep a top is, a radius is a radius no matter how large. Many large shops are doing anything but straight line cutting on a CNC or other automated equipment. With digital templates, it’s easy to create whatever radius, faucet hole layout, sink size etc with no additional cost. I remember bidding on dental cabinetry. I looked at a 6 drawer special dental cabinet as drawer base with two extra drawers.. Dental supply companies were getting huge $ and I was able to compete by thinking in “standard” terms and adding for the “special” part. The cabinet box remained “standard”.
Most kitchen counters are going to be 25 1/2 +-. A drop edge is a drop edge. Even commercial jobs for the most part at ‘standard”. Depths may change but your not building round tops often. Most are “standard” straight counters, of varying depths perhaps.
Even the 20 edges noted above, would fill probably 99% of the jobs.. and IF you get an oddball, the savings in “standard” tops far out weights the additional cost of that one top.
I was always taught to sell the sizzle and then sell UP by selling down. You sell the customer on all the goodies, and then, if they balk at the price you start taking away things…ie.. coved splash etc. Normally if you have done a good job of selling the cleanliness and ease of cleaning a coved backsplash, they won’t want to give it up for “just that amount”. How many of us have purchased a vehicle that had more than we wanted on it, because it came ‘Std”. Next time we demand to have those options.
If your customers are only looking at price, there will always be someone cheaper, no matter how low you go. Remember if your charging a “normal” markup for every 10% reduction in price you need to do about 30% more work to equal the profit you gave away. Sell features and benefits and then take those away, starting with what they were excited about first. I think you will have larger sales and protect your profits also.
A large box store fabricator here, upgrades about 75% of his solid surface counters at template. This becomes his real profit. I’ts also why the owner does most of the templates himself, he’s the companies best salesman.
Wags,
We’re pretty much making the same points, but from a different direction.Let me use the coved splash as an example:
A small shop might not be able to afford a V grooving machine, or even a Monument Toolworks coving machine.
Our first expensive piece of equipment was a Streibig, and we wonder how we ever did without it, but of course we did without it fro 36 years, 25 of those with solid surface. All the above mentioned machines will allow for a quicker coved splash. A large company will likely have one, if not all of them. A small shop will need to save for them. His coved splashes will probably be more expensive per foot and he has to think differently from the large shop.The large shop can program the groove route on the CNC if they don’t always use the batwing cutter. We use both, depending on the type of top. The smaller shop who has not yet invested in tooling up, needs to use other types of set up. Therefore a custom shop has to think different than a larger, volume oriented shop. A larger shop will almost always have a CNC, a Vertical panel saw, and/or a V groover. A smaller shop may have those, but they will have been around a long time to get them.
It is not just tooling that makes the difference, though. A custom onl;y shop has a mind set that works differently than a volume shop. How they look at jobs, for instance. When we bid a large job we are thinking of creating production line set ups that are second nature to a larger volume oriented shops. In fact, they probably already have those processes in place, so it doesn’t even figure in their equation.
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