Meet the Challenge
Why would a retailer who is already carrying elements of the outdoor room, such as furniture and fireplaces, object to selling grills and outdoor kitchen equipment?
For some, there’s limited space on their showroom floor. There may also be concerns about gross margins and the real profitability of selling grills and outdoor kitchen equipment.
In addition, there may be some apprehension that stems from not thoroughly understanding grills and outdoor kitchen equipment. In particular, how are they, as a retailer, going to facilitate designing and constructing an outdoor kitchen?
All of these are valid questions. As a sales professional, an important part of my role is working with retailers to overcome these challenges. I hope to help them realize logical extensions of their existing business to increase sales and profitability.
Limited floor space, concerns about margins and profitability, and not understanding grills and outdoor kitchen design and construction, are the challenges I hear most often. Here are strategies to overcome them:
Limited Floor Space
Most successful retailers have well-merchandised showrooms. When it comes to grills and outdoor kitchens, a small display with the right components can go a long way. It’s important for consumers to see grills as built-in, not freestanding. Presenting a built-in grill with accessories is reminiscent of an indoor kitchen and helps consumers understand that it’s more than a grill—it’s a place to gather and entertain, not just a place to cook.
A great outdoor kitchen display can be achieved in as few as 7 linear feet. This affords the opportunity to show a larger grill and complementary accessories, such as a power burner and door, or drawer storage under the grill.
I always suggest showing higher-end grills built into an outdoor kitchen. You can then display a second, more affordable, freestanding grill that’s also suitable for use as a built-in. This gives you the opportunity to show a freestanding grill and have a more affordable built-in option.
A great introductory display strategy can all be achieved in 11 linear feet.
See related post: Get to Know Grills
Margins and Profitability
Grill manufacturers do not offer the same gross margin percentages as furniture or fireplace manufacturers. It’s important to understand that most grill manufacturers do not force retailers to carry inventory and the risk that comes with it. Grills and outdoor kitchen equipment are usually available through local distributors and are ordered when consumers buy the products from retailers.
The average gross margin percentage for grills and outdoor kitchen products can range from 25%–35% (or higher) depending on the manufacturer and the retailer’s actual sales volume. While the percentage may be lower than what you’re used to, the gross profit dollars can be very attractive. Here is a simple example: The average consumer will spend $10,000 on a suite of premium outdoor kitchen products. The average gross margin dollars from this transaction would be $3,000. Not bad for an add-on sale!
In addition, many grill manufacturers have well-managed minimum sale price policies and Internet sales policies that allow brick-and-mortar dealers to maintain margins.
See related post: Listen and Learn
Understanding Design and Construction
In my experience most consumers enter into the backyard improvement buying cycle through a local trade professional such as a landscape architect or custom remodeler. These trade professionals then direct consumers to retailers who sell the amenities that complete the space the trade professional has designed and built.
The opportunity is to align your retail showroom with the trade professionals in your market who are taking on backyard improvement projects.
If a consumer comes into your showroom and has not started the process with a trade professional, there are a number of outdoor kitchen cabinet and custom outdoor kitchen companies that can help you. You can also direct the consumer to a builder that you know and trust.
There is a real business opportunity for retailers who are already involved in selling some aspect of the backyard. If you have sold outdoor furniture, an exterior fireplace or other products in conjunction with backyard improvements, there’s a good chance you could have also sold a grill or suite of outdoor kitchen equipment. If you don’t capitalize on the captive audience in your showroom to buy other outdoor elements, someone else will.