How to find profit with panel sales

From an applied cost standpoint, paneling compares well to wallpaper (without the mess), Redding maintains, using a chart to show the cost of paneling to finish a20'x?.0'romr with an 8' ceiling height (640 sq. ft. of surface without deduaing for doors and windows) would be less than the cost of wallpaper (see chart below).

From the retailer's perspective, paneling sales provide a base for addon sales of high mrgin products. 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 salespenon is in asking questions and offering solutions, the hrgher and more profitable the sale will be, Redding says.

Story at a Glance

Why prefinished plywood panels ar€ a core project item ... how to merchandise them, sell add-on products, dlsplay and advertise for marimum return on dollar.

DREF'IMSHED wall paneling pro- I vides value to both the consumer and retailer as a c(re project item.

John C. Redding, vice president, sales and narketing, Chesapeake Hardwood Products, Inc., Chesapeake, Va., gives this example to prove their value: A consumer remodeling a, 2O'x?.0' room will need roughly 20 sheets of paneling. Based on a range of reail price points ftom $7/piece for composition board to $3O/piece for real hardwood, he will spend from $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 dark brown snrff in their parents' or grandparents' dens or basements. Styles today include simple woodgrains in light colors, contemptrary high fashion decorators and a full range of natural veneers. Applications range ftom accent walls to full wall or wainscotting combinations.

A retailer should worlc with suppliers to cus0om tailor product selection, price point merchandising and advertising support o fit his physical set-up and marketing philosophy. h general, retailers do not need to cuty a large inventory of each item, Redding advises, but they do need to show they're in the business. Paneling is not an impulse item. When a consumer starts a room remodeling pro- jecE the key is to have paneling presented well and offer a good selection available quickly. A retailer stocking 18-20 panels can cover almost anyone's needs. Offering an additional 10-20 "special order products" can compleoe the package. Some multistore retailers with their own distribution systems do this internally, but independent retailers can achieve the same tlpe of progran through a local distributor. It is important that the consumer has clear information on product availability, timing and pricing, Redding cautions.

Effective merchandising is an area the panel industry needs to focus on, he comments. Because of space con$fains and the size of panel products, displays that show more product in less space must be developed

Many retailers still show and stock panels in full view "A" frames, Redding comments. If space is adequate this is the best way, since that is how a consumer will see paneling on the wall.

The trend in high volume, mass merchant stores is !o flat stack panels up to five SKUs high in warehouse racks. Product samples are shown in overhead displays. Moulding displays stand on top of the panels and under the sanple.

Variations and additions to this approach can enhance the overall department. Sample Swing-Wings can bring product down so @nsumers can touch it. This is especially effec- tive for high fashion, t€xflued decoraors, Redding adds.

A ftee standing, pre-cut hardwood wainscotting stocking display complenrents the total program. cut-away vignettes can provide product/project infonnation, allowing consumers to see how it is used over studs, pliastered, block and even paneled surfaces. They also can see how decorators and woodgrains combine in wainscot 4plications.

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

Advertising that highlights the project 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 Oeru 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 dollan more than the least expensive composition board. Displaying a simple prioe grid like the one below can help customers sell the,mselves up.

Salespeople should lmow the poducts they offer and the price points they fit. Consumers generally have a good idea of what they want, so the key is o ask questions and nake suggestions around these needs. If they are looking for a cheap cover-up, a properly installed woodgrain on composition bord 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 re readily available, but the salespenon should be able to give pointers. Once the panel has been selecte( he needs to move to related it€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 manufacorers who can assist in these areas will ensure adequate sales and inventory tufns, Redding ooncludes.