How to find profit with panel sales

From an applied cost standpoint, paneling comparcs well to wallpaper (without the mess), Redding mailtains, using a chart to show the cost of paneling to finish a20'x2fr'rom witb an 8' ceiling heigbt (640 sq. ft- of surface without deducting for doors and windows) would be less than tbe cost of wallpaper (see cbrt below).

From the retailer's perspective, paneling sales provide a base fc addon sales of high magin troducts. A consumer buying paneling should be shown moulding (and stain or paint if he's buying real wood), nails, glue, touch-up sticks, furring strips (if needed) and tools to finish the job. The more proficient a salespersm is in asking questions and offaing solutions, the highsr and mqe profitable the sale wiU be, Redding says.

Story at a Glance

Why prellnlshed plywood pene|s alr a qon prqlct lt fll how to merchandlse them, sell add-on Foducts, dlsplay and advcrtlsc for marlmum ntum on dollar.

DREFIMSHED wall paneling pro I vides rralue o both the oon$lmer and retailer as a corc project item.

John C. Redding, vice president, sales and marketing, Chesapeake Hardwood Products, Inc., Chesapeake, Va., gives this examPle to prove their value: A consumer remodeling a20'x?n'rmm will need roug$y 20 shees of paneling. Based on a nmge of retail price poinr frm $7/piece for composition board to $30/piece for real hardwood, he will spend ftom $140 o $600 on the paneling. Within this range he could have anything - a cheap cover-up, a high fashion decorator panel or an elegant real hardwood veneer.

Wall paneling has changed over the years, he points out. Many consumers remember, and some still think, paneling is the datbrown suff in 6eir parcnts'a gran@rents dens or basements. Styles today include simple woodgrains in light colors, cmt€mporary higb fashion decoralors and a full range of naEral veneers. Ap'plications range ftom aocent walls o full wall or wainsoning ombinations

A retailer should wqt with zuppliers tro qrstour tailor poduct selection, price point merchandising and advatising support to fit his physical set-up and mrketing philosophy. In general, re[ailers do not need to carry a large inventory of erh item, Redding advises, but Oey do need to show they're in the business. Paneling is not an impulse item. When a consumer starts a rcom reinodeling pre ject, 6e key is to have paneling pesented well md offer a good selecrion available quickly. A reailer socling 18-20 panels can @ve,r almost anyone's n€eds. Offering an additimal 10-20 "special order products" can complete the package. Sme multistqe retaibrs with their own distribution systems do this inrcrnally, but independent retailers can achieve tbe same type of pmgram thutgb a lml distributor. It is important that lhe consumer has clear information on product availability, timing and picing Redding cautims. lvlany retaibrs still sbow and stock panels in full Yiew "A" frames, Redding corrnents. If space is adeQuate this is tb best way, since that is how a cdrsrmer will se pareling m the wall

Effectiw merchandising is an rea the panel industry needs to foqs on, he mnents. Because of space mstrains and tbe size of pnel pmdrcls, displays that show more p'roduct in less space must be devcloped.

The trend in high volume, mass mercbant stfrqs is to fht strck panels up to five SKUs higb in warehouse racks. Prodrct samples ae shown in ov€rhead displays. Monlding displays stand on top of tbe pmels ild wder thesmple.

Variations and additions to this approach can enhance the overall department. Sample Swing-Wings can bring product down so oonsumers can touch it. This is especially effec- tive for high fashiCIL texfirred decorators, Redding adds.

A free standing, pre-cut hardwood wainscotting stocking display complements the otal program. Cut-away vignettes can provide product/project infomation, allowing consumers to see how it is used over studs, plastered, block and even paneled surfaces. They also can see how decorators and woodgrains combine in wainscot applications.

Paneling is best situated in the same area as other decorative items like cabinets, wallpaper and paint. This gives the consumef one more option for his choice. Displays should be changed as the retailer reviews his program, generally on an amual basis.

Advertising that highligbts the pro ject is more effective than highlighting the "piece/price." Throwing out a couple of price points to get consumers in the door is good, Redding mainains. Once you have them, the rest of the package is needed to sell full projects. This includes price points that make it easy to show the cost/value of stepping up to style. High fashion decorators can be had for a few dollars more than the least expensive composition board. Displaying a simple price gid like the one below can help customers sell themselves up.

Salespeople should lmow the products they offer and the price points they fit Consumers generally have a good idea of what they want, so the key is to ask questions and make suggestions around these needs. If they are looking for a cheap cover-up, a properly installed woodgrain on composition board back will do. If they are going to spend any time in the room, the salesperson should show them the value of higher fashion items.

Installation instructions are readily available, but the salesperson should be able to give pointers. Once the panel has been selected, he needs to move to related ite,ms.

Retailers can be successful in the paneling business by having a good selection of products, a range of price points, advertising that gets consumers in the door, effective merchandising and good salespeople. Working with manufacffiers who can assist in these areas will ensure adequate sales and inventory turns, Redding concludes.