Carpet executive rolls out small-shop buying group - Business Courier of Cincinnati:

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The flooring industry is essentially an with one or two major chains dominating and all the independentx struggling for the remainingmarket share. So the formerr Buddy’s CEO in Aprilo launched a buying company that woul d help small retailers not just with butwith image. Called , the companh is designed to give mom-and-pop shopds similar purchasing poweras big-box chains. But unlike many buyinv groups, which purchase in bulk on behalft of a group of retail Amerifloors alsooffers marketing, Web site creation and regular It serves to builrd the image of its a strategy that helped it land six representing sales of $8 million. The goal is to sign 20 retailerw byJune 2009.
“Our strength is not allowinyg our brand to get in the Goodyear said. “Our retailers have a good brand image. What we want to do is come in and teacgh them how to enhance that Small retailers wantthe same, they just don’ft have time. For many, managing the day-to-dauy demands of opening shop and fulfilling orders isa 14-hour-a-dauy endeavor. So Goodyear has partnered with downtown to managse the marketing features of his For abasic fee, a retailo partner can: • Access merchandise at a leveragexd rate, • Have accessa to online tools to reach consumerz directly, either for broad announcements or specialized • Get online training from sales tutoriales to advanced design, each lesson endint with a test; • Benefit from ongoingh customer research by Amerifloors, whicu is gathered through surveys and on-site visits.
“Inh terms of a $1 million or $2 millioj retail outlet, that was blue-sky kind of said Bryan Wright, a spokesman for Strata-G. “They’re thinkint about keeping the lights on and thetoiletzs running.” In time, Goodyear hopesd to also be able to provide the group health workers’ compensation insurance and installatiomn insurance. But that won’t be possible until Amerifloors reachews a critical mass of about 20, generating sales of $15 million to $20 Goodyear hatched the idea of a full-service buying grouo during his two years running Buddy’es Carpet.
While Buddy’s was not part of a buyinfg group – it is actually amonvg the 25 largest flooringretailers – he saw that smalle players had few tools to build an image, let alond establish a vision. There are 18,000 independent flooringt retailers, according to the in Anaheim, “About 70 percent of all floor coveringg is sold by dealers that have lessthan $1 milliojn in sales,” said Chris Davis, CEO of the But not all of such retailers woule qualify as members of Amerifloors, however. Goodyear is selective and will not represent retailers that sell seconds or operates solelyon price.
There also is some geographicdexclusivity – he won’t represent two merchants on one for instance. Those who do becomr partners are chargeda one-time fee plus a monthlty transaction charge. Goodyear declined to discuss the but saidthe one-time fee is less than the cost of a standarf marketing campaign, and the transaction fee does not go up for the life of a Among the retail partners is Greg Peach, owner of in Ky. Peach also is a member of the flooringycontract group, but decided to join Amerifloords as well. “There were a lot of ideas with Ameriflooras that go way beyond what the Shaw Industriea can provide and we just felt really goodabour it,” Peach said.
“There is no doubt therre have beencost savings. We are on a path to save on manydifferent things.” At the very onseyt of signing a client, Strata-hG workers will meet with the retailer to decide the messagse and medium of its comingh marketing program. The philosophy is that if the retailer has abetter brand, then Amerifloors will This differs from a common buying group’s approach of building its own brandr identity, with the belief that its retailk partners will benefit. It’se not that it is wrong, Goodyear said. But he thinks his approacgh is better suitedto today’s market “We feel,” he said, “thaft we’re the next evolution.
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