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What commission do Big Box stores take on granite or cabinets?

Posted by desertdance (My Page) on
Wed, May 15, 13 at 13:02

We have had quotes from both Home Depot and Lowes for all kinds of upgrades. They send a company out to give you a quote. That company measures and gives you a pitch. If you buy today, you get XX discount... You know how that goes!

If you go direct to a granite fabricator, you will get it for less. It's not always possible to go direct to a cabinet maker who works with the Big Box stores because they usually have contracts.

What say you?
Suzi


Follow-Up Postings:

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RE: What commission do Big Box stores take on granite or cabinets

I hate places that give you the "if you buy today" discount. I don't want to be rushed into a decision. Shop around and if they offer the best price and a good product then jump on it. I bet if you don't buy today you can still get that discount.

I did get the same cabinets from Big Box with upgrades over what a KD offered for the same line. The KD in my estimation was quite overpriced on everything though. It pays to shop around and really have a very good idea of what you want before you commit.

Good luck!


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RE: What commission do Big Box stores take on granite or cabinets

HD has a countertop estimator right on their website where you can plug in all of the variables and get a quote right there. If you've got measurements, no store should have to send someone out to get a quote for a counter. As far as cabinets go, the boxes have a much higher multiplier because they have a lot of mistakes that they have to eat because they have lots of untrained staff. So their stuff costs more than from a design shop that sells the same thing.


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RE: What commission do Big Box stores take on granite or cabinets

I just wonder what % commission they take. I bet it's like 20-30%!

Would be nice to know.

Their vendors pay for the referral. Not interested in paying both. I know the Big Box's make money, and I know how they do it. All retail is marked up 3 times, so they can still make money on sales.

I bet it's the same with cabinets, granite, flooring, etc.


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RE: What commission do Big Box stores take on granite or cabinets

Markup is a part of life desert dance ! Why are you so averse to paying it?

What you should focus on is are you getting fair value for the price you are being charged on the product or service you are buying.

BTW - all retail IS NOT marked up 3 times. Sometimes its only once depending on the distribution channel, and if you are talking about percentages , some things are only marked up 10-20% like appliances !

Also consider that " markup"allows you to walk into the Depot and browse their selection on tile, cabinet doors, countertops, and appliances for free. All those displays , lighting, brochures, rent, costs $$$. Now , you can easily find an outfit with lower overhead which might translate into lower markup, and it might not. You'll drive yourself crazy trying sort out all the costs that go into a renovation budget on top of the design decisions that need to be made.

Do you question your mechanic's markup on oil or bolts when you get an oil change? You could save a lot of money if he bought all his oil when it was on closeout or March Madness sale at walmart instead of his regular supplier. How about the fees your broker/ IRA/ 401k charge to administer your retirement plan. And other accounts? Ever hire an attorney and seen what you are charged for a copy or a postage stamp?

It's easy to nitpick pricing - there IS ALWAYS someone/where with a lower price. Why dont you tell us what business / industry company you or your spouse work in and let us compared its pricing with the rest of the market.


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RE: What commission do Big Box stores take on granite or cabinets

Margins on home improvement products are not nearly what you are fantasizing them to be. And although the box stores do add on their percentage to things like HVAC replacement or roofing services, as does any retailer, they also offer credit that allows plenty of responsible people to afford a project now that they thought they would have to put off. In many cases, such as a roofing job, doing the job sooner will actually save them money vs. waiting until damage to the home has occurred.

And, if you prefer to not pay any markup at any retailer, you only need contact the wholesaler and try to purchase directly from them. Which is usually impossible unless you have a resale certificate.


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RE: What commission do Big Box stores take on granite or cabinets

"(Which is usually impossible unless you have a resale certificate."...ROTFL...

and in the case of cabinet companies be willing to invest in displays, samples, and literature, 10-20k, then get a credit approval, promise to sell somewhere between 75 and 150K minimum net cost a year and provide evidence you can do that. Oh and you need a storefront.The better ones even have an intake process demanding an interview, submission of 2-3 completed projects with photos and drawings and 3 other client referrals as well as an agreement to do minor service calls for warranty issues. It's easy :)

Home Depot is a publicly held company- you can go to their website and check financials. Last I knew they work on a gross margin of 35%. That is a mark up of about 55% over cost- some things are more some less. Labor will be less, sheetrock screws much higher, Chinese lamps much much higher.
Countertops margins are pathetic as low as 15%. Nationally the average margin for cabinets is 41% but typical is 30 is considered the lowest possible to stay in business, 33 is pretty common in my area.

I'm a bit of an anarchist/libertarian/socialist wacko myself- but the reality is we do live in a capitalist economy.


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RE: What commission do Big Box stores take on granite or cabinets

I don't know the exact percentage of markup for counters, so I won't comment on that, but I do know that some items sold at HD actually are loss leaders for them. For example, they lose money on 2x4s, but hope you will spend enough on other items to make up for it.


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RE: What commission do Big Box stores take on granite or cabinets

What difference does it make what the mark up is. It is what it is.


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RE: What commission do Big Box stores take on granite or cabinets

When I had a quote for a guy selling several brands, (not big box store,) it was waaay more than the custom guy. Maybe I got lucky, but that middle man has to be paid.


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RE: What commission do Big Box stores take on granite or cabinets

Jakuvall - while some cabinet manuf. may have stringent requirements like you detail , there are still plenty of them that only require you to show an interest.

No credit check because the terms are certified funds before production and delivery, sell $5000 or $5000000, makes no difference. No need of a retail space either, I know several designers that work out of the back of their SUV. These companies will even give you one catalog/price guide to start. Some will even give you sales literature to start also.


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RE: What commission do Big Box stores take on granite or cabinets

xedos- I've only talked with 12 since 2010 (none with the conglomerates). I don't doubt there are exceptions- just not my experience.


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RE: What commission do Big Box stores take on granite or cabinets

Lowes for example, sets the price of what the countertop fabricator can charge. Most fabricators have to work on zero to none profit margins, which usually means, they are cutting corners to produce the top, and lower their overhead. You are not getting the same quality of job as you would if you went directly to the fabricator. (How do I know this? When Lowes came into my town, they asked my company to fabricate tops for them. After looking at the program, the pricing we could charge, and the issues with uneducated sales staff we said NO!) I know Lowes has been through many fabricator in my area. They subcontract everything out to the cheapest person that's willing to work to do the work for them. If you have a problem....remember no warranty covers poor fabricator or installation.


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RE: What commission do Big Box stores take on granite or cabinets

Desertdance,

I live in NH and our Lowe's didn't work that way. We went in and gave the very competent sort-of KD our counter measurements. She talked to us about prices, edges and general fabrication to make sure we knew what our choices were and what we wanted. Then she sent us off to a granite yard about 30 miles away. They had fabulous granite and we chose a slab we loved and they put our name and Lowes' name on it. A few days later the woman from Lowes and gave us the price of the granite fabricated in the way we wanted based on the sq feet we said we had. A week or so later the fabricator calld, made an appointment and came and laser templated. (We did get a call that our sq ft estimate was a little off and the job would be about $67 less than our quote)Ten days later they were back to install our perfectly fabricated gorgeous granite. The price was about 3/4 of the price a local and highly regarded fabricator was going to charge us for the same granite. The process with Lowe's was wonderful and error free, the people were all competent and professional. Certainly the quality of their work did not suggest corners were cut and both our fabrication and installation went off without a hitch and on time.And honestly, the biggest thing I had ever previously bought from Lowe's was a ceiling fan for the breezeway.


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