Battling a "Cocoon of Fear"
Even though it is pretty much universally accepted that the worst of the recession is behind us, consumer confidence is still not quite where it needs to be -- especially when unemployment remains at a high rate. And as this situation slowly improves, the fabricators who are adapting to new realities in our industry have begun tasting some real success, particularly the ones who are entering new markets.
"We used to be all residential work, and it was a mix of new and remodel [projects]," said Victor DeOliveira of Discover Marble & Granite, a 10-year-old operation with shops in Massachusetts, Florida and Connecticut. "We had to learn how to sell outside of our own model, and we are doing commercial and hospitality work. Half of our business now is commercial."
Even within the residential sector, Discover Marble & Granite diversified and expanded its target client base. "We now do anything from a $3,000 kitchen to a $180,000 penthouse, and it has allowed us to grow," DeOliveira said. "Our best year was 2008, and last year we were down 12% across the board. Now we are up 20% over last year, which would make for our best year ever. April of 2010 was our second best month ever. We have been steady and consistent once we diversified, and we haven't had the peaks and valleys."
Regardless of whether or not a fabricator wants to enter the commercial market, there are still ways to diversify an operation to increase business, even while remaining in the residential side of the trade. These days, I am seeing more and more fabricators carefully organizing their remnants for sale to the general public, and they are opening their remnant yard on designated days (often Saturdays) for homeowners to select pieces for vanities or smaller countertops. I know it is a hassle in many ways, and it probably wasn't necessary four years ago, but a number of fabricators have told me that remnant sales have opened a new revenue stream that is sorely needed when a lot of homeowners are not quite ready to spend $5,000 on new kitchen countertops.
Additionally, some fabricators have developed partnerships that allow them to accept work that will be processed outside of their shop. This point was made at a recent Stone Fabricators Alliance (SFA) Workshop by Ron Hannah of Cadenza Granite & Marble, Inc. of Concord, NC. "Strategicpartnerships are important," he said. "Being a member of the SFA, we are able to utilize other waterjets in the region. When people ask if I have a waterjet, I say, 'Yes, I do. It just happens to be in Acworth, GA, at Crowe Custom Countertops.' If you have made these partnerships, you never have to say no to a job, because someone will help you get it done."
Having these practices in place will not only help a fabricator survive a difficult recession, but it will also place them in an advantageous position as the market recovers -- and it IS recovering. According to the most recent stone import statistics compiled by the U.S. Department of Commerce -- covering March of 2010 -- granite imports increased nearly 40% to a total of $60.18 million.
This trend certainly seems to have continued into the summer months, as a number of fabricators told me that business has been consistently trending upward. Just today, I received an e-mail from a fabricator that I recently visited, and he told me that I had to change the production figures he cited during our meeting, as they had increased by a significant margin over the past six weeks. And while that is only one example, I can assure you that I never received an e-mail like that in 2009.