To Sell or Not to Sell?
Kitchen and bath dealers are clearly pretty evenly divided when
it comes to the question of whether or not to display, specify and
sell major home appliances as part of their typical kitchen
They’re also fairly clear about the reasons they either sell or
don’t sell appliances, and the course of action they plan to follow
with respect to appliance sales in the future.
Those conclusions are among the major findings that have emerged
from a nationwide survey in appliance sales trends among kitchen
and bath dealers. More than 200 dealers took part in the mid-March
survey, which was conducted by Kitchen & Bath Design News.
To say that kitchen dealers are evenly split over the issue of
appliances is not exactly an exaggeration.
In fact, 50% of the dealers surveyed by K&BDN reported that
they only specify but do not sell appliances as a rule, while 50%
said they both specify and sell appliances as part of their typical
The prime reasons for the division among dealers?
On the plus side of the equation, dealers say that selling
appliances enables them to control all phases of a kitchen project,
while providing a very real service to clients.
On the negative side of the ledger is the age-old argument that
dealers simply cannot make an acceptable profit on most appliances,
particularly in light of a lack of territorial exclusivity in
connection with the products plus heightened competition by home
centers, mass merchants and appliance retailers.
In a similar, and related, finding, 49% of the dealers surveyed
by K&BDN report that they display appliances in their
showrooms, while 51% do not display their appliances.
Of the dealers who do sell appliances, cooktops (98%), dishwashers
(95%), ovens (87%) and refrigerators/freezers (86%) are the
products that are most commonly displayed (see Graph 2).
The amount of showroom space devoted to those displays has not
changed very much in the past year at the typical dealership,
In fact, of those dealers who are actively selling appliances,
only 18% report they devoted more showroom space than ever to those
products in the past year. By comparison, 22% said they devoted
less showroom space to the products, while 60% said they devoted
about the same amount of space in the past year as ever.
That pattern should also hold true over the next 12 months or
so, the dealers reported. In fact, only 11% told K&BDN that
they’re planning to devote more space to appliances in the next 12
months, while 12% are planning to devote less space to the
products, and 77% will devote about the same amount of space.
However, devoting the same amount of showroom space to
appliances doesn’t necessarily mean that the dealers who sell
appliances are not actively shopping for new lines. In fact, of the
dealers participating in the K&BDN survey, 38% reported they’re
planning to add or replace appliance lines in the next year, while
62% said they’re not planning to change any products they
Moreover, 17% said they’re planning to drop at least one current
appliance line, surveyed dealers reported.
Not for profit
Ironically, profit is not the only factor motivating kitchen
dealers to sell appliances. In fact, only 36% report they are
satisfied with the profit margin on the products, while 35% report
that they are not satisfied with the profit margin and 29% claim
they are satisfied with the profit margin only on certain select
specialty lines of appliances
(see Graph 3).
In a similar finding, 44% of the dealers surveyed by K&BDN
say that their sales profitability is not acceptable, while only 2%
report “exceptional” sales profitability (see Graph 4).
Moreover, of the surveyed kitchen dealers who sell appliances,
only 28% believe that selling those products actually increases
their kitchen sales, although 52% do not believe that selling
appliances has any impact on kitchen sales at all, and 20% are not
However, kitchen dealers who sell appliances say they adhere to
that practice not so much as an avenue for additional revenue, but
to provide a tangible service to their clients. It’s also a way to
control all phases of the project, those same dealers
79% believe, for example, that selling appliances provides an
important service to clients and is an essential part of their role
in the industry as a kitchen dealer/ designer.
“There’s no money in it, really. We know that, but we consider
it to be a service to our clients,” comments a straightforward
northern VA-based dealer.
“I think it’s good to be able to offer a complete package, and
to provide convenient, service-oriented, one-stop shopping for our
customers,” observes a Youngstown, OH dealer.
“Offering appliances enables us to control all phases of the
kitchen project, from design through profit,” says a dealer in
Interestingly, many dealers who are not selling appliances now
have tried that route albeit unsuccessfully . For instance, some
44% of the dealers surveyed by K&BDN report that they’ve sold
appliances at one time or another in the past.
Of the surveyed dealers who sold appliances in the past, but
have stopped selling them now, 86% claimed that selling appliances
simply did not prove profitable enough, while 41% told K&BDN
that the competitive pressure wrought by local appliance outlets
and mass merchants was too intense (see Graph 7).
At the same time, 18% said that there was not enough client
demand, 14% claimed that they lacked the necessary expertise to
effectively sell the appliances, and 22% cited “other” reasons,
including poor manufacturing support, and a lack of desire to deal
with such issues as freight damage, delivery and warranty
Dealers also seem firm with respect to their current posture
about selling appliances. For example, only 13% of those dealers
who currently don’t sell appliances told K&BDN that they’re
considering selling them in the future, while 87% said they’re not
“There’s so much competition in the appliance stores. Some of
them will beat any quote we provide, so how can the business be
profitable?” a New York City dealer asks rhetorically.
Some additional typical comments follow:
- “People don’t request appliances, or expect them from a
designer,” said a Gulfport, MS dealer. “Besides, the profit margin
is too low to worry about them,” he adds.
- “When you’re a design/build showroom specializing in kitchens,
it makes sense to display appliances,” comments a dealer from
Austin, TX. “However, when we promote the appliances and lose the
sale, it gets old fast. What makes sense is that appliance
companies truly partner with dealers.”
- “There’s a large cost involved in showing appliance, but the
products themselves change so quickly,” laments a Trenton, NJ-based
dealer. “We rarely have the exact same product go into two
different kitchens in a reasonable period of time.”
- “Customers are shopping the home centers, and if my clients
find a product cheaper, they think we’re taking advantage of them,”
said an Atlanta dealer.
Most surveyed dealers who are currently not selling appliances
would probably change their mind, however, if circumstances
changed, they report. Some 46% told K&BDN they’d sell
appliances if they could achieve higher margins; 21% said increased
demand; 16% said territorial exclusivity; 16% said more training
from suppliers; 22% said more unique specialty products (see Graph
Nearly half of those who don’t sell appliances (47%) said that
nothing would make them offer the products.
“We need to devote all our time to designing kitchens and baths
and taking care of our clients,” noted one dealer. “I don’t have
adequate warehouse space or delivery people and we’d need to hire
someone to install them. It’s too much hassle. I’d rather leave
that to the homeowner.”
“We have all the work we can handle without having to keep track
of appliances as well,” added a Pensacola, FL dealer.
Other results of the K&BDN survey include the following:
- Only 16% of those surveyed report that their appliance sales
profitability has improved in 2000 compared to 1999, while 15% note
a decline in appliance sales profitability and 69% say it has
remained essentially the same in the past year (see Graph 5).
- 52% of the surveyed dealers say they generally have a problem
obtaining up-to-date specs and product information from appliance
manufacturers, while 48% do not.
- 16% of the dealers surveyed said they have problems integrating
appliances with the cabinetry they specify and sell, while 84% said
they do not. KBDN