I found this showroom online and it blew me away .. it is so beautiful and exotic inside and out and then right below these beautiful photos was 29.99 granite.. This really gave me some perspective on how desperate the stone market is becoming.

http://thegranitestore.net

Imagine the quality of $29 a square foot granite. You are basically fabricating and installing for $20 a square foot. On an average kitchen that comes to $1000. Can't even temp, fab and install without making wages let alone a profit.

Lost leader to get people in the door and consumers fall for it every time.

oh i get the strategy, I am just blown away that someone would invest that kind of cake on the showroom and even think to play with the peasant folk at 29.95. I guess times have changed

Posted By Andy Graves on 19 Aug 2011 10:46 AM
Imagine the quality of $29 a square foot granite. You are basically fabricating and installing for $20 a square foot. On an average kitchen that comes to $1000. Can't even temp, fab and install without making wages let alone a profit.

Lost leader to get people in the door and consumers fall for it every time.

You know Andy... is that really any different that a $34 sq foot solid surface job we see everyday?

I would say,  I would have more hrs making a SS kitchen than someone with a CNC would have. 

You are probably right Kelsey. I would say you are not going to get the greatest quality for $34 a square foot.

people are not looking for the "greatest quality" anymore, most consumers don't even know what a bad seam looks like or where the seam should be. How do you play the quality game in a $29 granite/$34 solid market?

Find new people.

 

 

There are always people looking for service and quality, it is just more difficult to advertise to that sector. It is easy to put an ad in the paper with $29 a foot and people will come. Problem is that you will have more competition.

People will steer clear of $29 a foot granite for the same reason you don't drive a Yugo. At that price the stuff is crap and many know it.

Just recently I had a women who was in looking at samples and she commented she didn't care how much the cost of stone has come down. Now that most McDonald's use it in there bathrooms the ooooh ahhhhh of granite is gone.

Posted By Andy Graves on 21 Aug 2011 03:04 PM
There are always people looking for service and quality, it is just more difficult to advertise to that sector. It is easy to put an ad in the paper with $29 a foot and people will come. Problem is that you will have more competition.

People will steer clear of $29 a foot granite for the same reason you don't drive a Yugo. At that price the stuff is crap and many know it.

I wish that were the case, Andy.  We don't do ANY residential customers, because it seems they all want the low low price, AND more than perfection too.

Posted By Len Smith on 22 Aug 2011 10:04 AM

Posted By Andy Graves on 21 Aug 2011 03:04 PM
There are always people looking for service and quality, it is just more difficult to advertise to that sector. It is easy to put an ad in the paper with $29 a foot and people will come. Problem is that you will have more competition.

People will steer clear of $29 a foot granite for the same reason you don't drive a Yugo. At that price the stuff is crap and many know it.

I wish that were the case, Andy.  We don't do ANY residential customers, because it seems they all want the low low price, AND more than perfection too.

By and large, America has been set up to have unrealistic expectations when it comes to purchasing anything.  I once bought a chain saw at the HD, and was cutting down some Eucalyptus trees in the back yard.  One of them fell on the new chain saw (yes, I am a bonehead) so I took the saw with a cracked plastic casing back to the Home Depot to look for a replacement part to purchase.  I showed it to the clerk for help in finding the part, and he told me "just go get a new one.  We don't carry those parts."

They gave me a new chain saw when I told them I broke it being stupid!  I'm pretty sure that the HD made the manufacturer pay for my mistake.

When retail customers are being trained to expect something for nothing...well, you get the point.

Len I been told by Costo to just buy, use it for a while and return items like, boats, surf boards, camping equipment, tools, computers, jewelry and so on and so. Its like they want you to just barrow their stuff, I don't get it ????

This world is upside down   

I agree, Cosco will take anything back at any time. My wife suffers from cat allergies so when she was to visit our Daughter in New Mexico, my Daughter suggested she would get some kind of a filtering machine at Cosco for my wifes visit. I told her not to go to the expense and her reply..."I'll just take it back when I'm done, I could take it back on fire and they would accept it" WTF??? How do you compete with that?

GEMSTONE

Costco, HD, Lowes and other big box stores who just take the difference out of the manufacturer's hide really aren't doing us any favors. We ALL pay the cost for these excesses in the form of increased prices, and unrealistic customers.

Isn't it true that there is an automatic 10% return merchandise charge to vendors of HD and others?

These companies obviously know what they are getting themselves into, working with HD and Costco. They seem to still make a profit because of the higher volume.

We tend to do really well dealing with residential, but we tend to go overboard on the craftsmanship side. At least we are getting paid for it.

That's good to hear, Andy. Olive Mill is probably extraordinarily well suited to handling residential, and it's a good niche if you are.

I like working with a complete set of plans and specifications rather than trying to deduce the plan and specification from the mind of a customer. I guess the problem in the residential market is more me than the customer.

Everybody needs to find their niche and exploit it. Getting into everything is a waste of energy and proves to be a money drain. You got your thing and thrive.

A little late jumping in here- We do almost exclusively retail work. We advertise "starting at" 27.00 a square foot. We have a nice showroom (three of them actually). We do about 40 kitchens a week (sometimes 50). We only do 3-4 27.00 a square foot kitchens a month.

We are middle of the pack in our market when it comes to pricing. But we keep about 150 colors in stock. Customers come in based off of the advertising, but they buy based off of emotion and what they really want. Our average ticket is about 55.00 a square foot.

This is the way the retail customer shops.

That is interesting that such a small percentage is $29 a square foot. I would have guessed higher. Do you feel that it cheapens your reputation at all, that would be my only concern but it sounds like you are just appealing to human nature.

Andy, it may cheapen my reputation to people who are not in my market or don't understand what we're doing. In Atlanta, everybody has had to adapt to the reality that is the current marketplace. I would think in my market we have a reputation for being one of the more successful shops around. And as I said, we are not on the low end of our market.

I've debated this with a lot of stone guys. The most common question I used to get when prospective customer would call was "How much is your Uba Tuba." If we said 40 dollars, they would hang up the phone. One day, I asked somebody who asked me that if they were going to put Uba Tuba in their kitchen. They said, "No, I'm just trying to get an idea on what your granite costs."

This is the way retail works. "How much is your granite?" "We start at 27 dollars a square foot and we have 150 colors in stock, why don't you come in and take a look, we can price you on every color on the spot." The next response I get is usually, "What are your hours."

Those same customers come in, spend 65 dollars a foot, and never even look at the cheap stuff.

Everybody knows you can get a car for 11,000 dollars, brand new. How many of them do you see on the road?