Weekly Brief

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The recession of the early 1990s made life difficult for many businesses with high-priced products, including Los Angeles-based Snaidero International USA, which imports, assembles and distributes Italian-made kitchen cabinets to showrooms and other sellers across the country.

Slowing sales led the company to begin operating its own showrooms in 1994. This helped business in ways that the company didn’t expect.

Snaidero’s president Dino Taddio told interviewer Wade Daniels what happened.

Our kitchen cabinets are built for the market’s high end. People can spend from $10,000 to $60,000 on our cabinets, depending on the size of their kitchen and what they want.

A few years ago, we had a problem that was pretty basic. In recession periods, people don’t have the money to spend on high-end goods like ours. One thing that made the situation worse was that some of the showrooms that carried our merchandise didn’t want to spend the money to display our cabinets.

Some of these places were displaying our cabinets in the same room as cabinets from other makers that were a lot cheaper, and you can’t do that. Think of it this way would you display a new Mercedes-Benz in the same setting or in the same room and setting as a new Ford? You can, but it’s just wrong.

It costs about $200,000 to make the right showroom setting for our cabinets, including the counters and appliances and pots and pans. You need all these other things to make the cabinets come alive and to show customers what they are being offered.

To help improve sales a few years ago, we started opening some of our own showrooms. The first one was in Los Angeles in 1994, and there are now others in Arizona, Florida and Chicago.

Obviously, our showrooms are good because they are another outlet for selling our products they account for about 30 percent of our sales but they have another very important function. They are places where other showroom dealers come and see that if they invest the money to set up a showroom the way it should be, then their sales can increase.

It has worked. Dealers have come and seen how customers react to the showrooms and then decided to make the investment for a real showroom, and they have seen their sales go up.

With the addition of our showrooms, and with the economic recovery, our revenues are now about $12 million a year compared to $2 million five years ago.

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