Should you start making Store Fixture Components?

As you know, its been many months since my last post. I do deserve a strong smack on the wrist for not posting sooner and I have received many calls asking when the next post would be. Since January we have launched 20 new colors and it has taken much more time than expected. I do plan to continue be more frequent with the articles from this point forward.

Now on to the post....

The other month I went to the Store Fixture show Global Shop 2011 in Las Vegas. The show was good and its clear that the Store Fixture market is more active than Home Building.

As of late, I have spoken to several companies who are slow with typical cabinet doors and these companies are looking to diversify their component offerings into other fields such as Store Fixture, Healthcare, Office Tops, etc. If your company is making only cabinet doors are you missing the boat? Maybe but not necessarily....

In this article I'd like to discuss various factors that one should consider before trying to get into making Store Fixture Components. I'll explain the CONS from a pressing stand point, sales stand point and also how it can split your focus. After explaining the difficulties of getting into store fixture components I'll get into the PROS of why one should diversify into Store Fixture Components. If you are a company that already makes store fixture components you may also find this article interesting in that it might give you more confidence of all the additional skills that you and your organization have built in order to be able to diversify.

CONS, What you should consider before making Store Fixture components.

Many companies figure that if they have a press and the press can make a wide variety of components why not get into making Store Fixture components. I'd like to explain the various difficulties and nuances to producing Store Fixture components and how its different than Kitchen Cabinet Doors.

CONS: A. Pressing:

One of the most difficult things in doing Store Fixtures components is that you might be asked to make grommet holes, 2" to 3" tops, returns, new radiuses, "L" shapes, kidney bean shapes and to miter fold. If you are currently producing doors you may have a lot of confidence in your key press operator however the difficulty comes when you have to stop your press for the entire day trying to get a web out of the inside "L" Shape. This can be very frustrating for a company who now has back orders of doors from real paying customers and the "L" Shape was merely for a mock up for a Store Fixture company. What to do? Most companies who produce Store Fixture components rely much more heavily on their glue and 3DL suppliers to trouble shoot their issues. Over the past years I've helped companies get creative with their jigs (used to capture the laminate and pull it away from created webs) for example.

CONS: B. Prototyping: Another difficulty in producing components for Store Fixtures is the prototyping cost and time. When you produce a sample door for a cabinet maker its not only easier but you are likely to need that profile and shape again sometime in the future. With Store Fixture components you may never need that shape again. So if you are designing a Kidney Bean shape with a special dimension and you do not get the project then you have wasted your energy.

CONS: C. Leadtimes: Another thing I have noticed about the Store Fixture industry is that they seem to release their orders and then need the parts in a super rush. Typically for a Kitchen there is more time between when the order is released and when the parts are needed on average.

PROS, Reasons for why you should diversify into Store Fixture components.

PROS: A. Diversification. If you are currently producing cabinet doors utilizing 3DL then certainly by diversifying into Store Fixtures you are opening your company up to new markets. As we have just witnessed with the downturn of the building industry, companies who were diversified into Store Fixtures faired better than companies focusing solely on Kitchen Cabinet doors.

PROS: B. Profit Margins. In this article I won't mention the per square foot cost of Store Fixtures produced with 3DL. Partly because its not the point of the article and secondly because its too difficult to generalize. But since its hard to generalize doesn't that drive home the point that most likely 3DL for Store Fixtures are more profitable on average. Certainly there is more competition for 3DL in Cabinet Doors than Store Fixtures so it stands to reason it would be more profitable. In addition, Store Fixtures themselves typically cost more due to their custom and unique sizing.

PROS: C. Market / Customer Strength. The next pro of getting into Store Fixtures would be that this market has been much stronger than the cabinet door market in recently years. Also many of the end clients are larger companies that have a strong retail presence such as restaurant chains or grocery stores. This can mean that they are on average more stable companies and also that the orders can be quite large. 300 Stores needing fixtures is certainly bigger than 300 Kitchens needing doors.

SUMMARY, And the nature of diversification

Should your company start producing Store Fixtures ? Really this depends upon your company's vision. The reality is that whenever a company changes direction or diversifies it creates more inefficiencies in estimating, invoicing, sales and management. New skills would need to be learned and every job would bring new challenges and difficulties. It is quite possible that by diversifying that you may loose your focus and it may hurt your door business. The other thing to consider for upper management is their willingness to get more involved in the new aspects of the business. Typically cabinet door businesses are built by the owners or management being involved with every step of setting up the company. Over time the management spends more time focusing on their core strengths and oversite and less time in each individual step. The reality, however, is that the reason your company was successful was due to your focus and determination. By diversifying into a new product segment you'll find that it will most likely require a re-focus of attention into small details.

I do hope that this article has been informative. Many other articles I write are full of statistics or very specific data whereas this article is more common sense. But I do think that reading this may further cement your existing thoughts towards the subject.