We’ve all heard of “sticker shock,” a term originally coined for new car shoppers. Many homeowners working on a kitchen remodel experience the same feeling when they see their first quote for replacing their kitchen cabinets. They try their best not to scan ahead to the last page to see the total while listening to the salesperson explain all of the great new features of the design. Finally, they turn to the last page. YOU’VE GOT TO BE KIDDING, RIGHT?
No, it’s not a joke, and the cabinet dealer is not “making a killing” either. The costs associated with a kitchen remodeling project can be staggering. Rising raw material, shipping, and skilled labor costs along with heavy investment in high-tech manufacturing equipment all contribute to today’s shocking prices.
Economics 101
Home centers (“Big Box” retailers) should be able to dictate market pricing. Their national buying power allows them to purchase products at the lowest possible cost from cabinet manufacturers. Their various departments all share common overhead costs like rent, electricity, and administrative expenses. Independent cabinet dealers should be forced to operate much like the almost non-existent local hardware store, offering considerably smaller selections of higher-priced products.
Advanced Economics
Big box retailers do hold the power to sell kitchen and bath cabinets at lower prices than independent cabinet dealers. In some cases, they actually do sell for less. But that is the exception, not the rule. Some of the biggest reasons for this economic mystery are:
- They don’t specialize in cabinets and their processes are just not as efficient as a well-run independent cabinet dealership.
- They view cabinets as a “convenience” for their contractor customers, not their lifeblood.
- They rely on their retail amenities, like store hours, financing, and variety of home improvement products, to justify making more money on their kitchen cabinets.
Reality
In most markets, independent cabinet dealers actually set marketing pricing by targeting a net profit on their jobs of between 2 and 5 percent of the sale price. That profit margin is probably about the same as (and maybe even a little less than) your favorite local restaurant. And it produces a sale price that is very comparable to the home centers.
How?
Efficient independent cabinet dealers typically have very good systems for managing the kitchen remodel process. They offer an experienced team of professionals dedicated to kitchen and bath cabinets, many of whom got their first experience in the cabinet business at a home center. Well-run dealers generally forgo the gleaming warehouse and other amenities, keeping fixed costs, and your prices, low. Although independent cabinet dealers don’t have quite the same buying power as the home centers, they still get very good prices from the cabinet manufacturers and offer selections that rival or even exceed their “big box” competition. The net result is that the best independent cabinet dealers are typically competitive with the “big box” retailers and strive to make up slight differences in price by delivering higher-quality service and impeccable attention to detail.
Finding a great independent dealer isn’t easy, but it is almost always worth the effort. You’ll get a reasonable price and great customer service from professionals dedicated to your kitchen.
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