The Emperor’s New Showroom
Happy Solstice! I know this is a bit longer but it’s time for “Slow Thinking” instead of “Fast Thinking” for a change. Basically looking at something longer that really needs some time and attention compared to whipping through things that you already know and then moving on. Why? Because that is where you come up with plans of change. They are not superficial but more game changing thoughts. So sit back, get comfortable, and read on dear friend.
Why No One Is Telling Kitchen & Bath Dealers the Truth
I was planning to finish the referral ratio trilogy.
That was the plan. Nice and neat. Three parts, a clean ending, maybe even a respectable little bow on top.
Then I made the mistake of thinking.
More specifically, I had one of those dangerous nap-session revelations where your brain wakes up before the rest of you and starts connecting dots you were not quite ready to connect.
And here is where it landed:
The kitchen and bath dealer channel may be standing in the middle of the showroom wearing a very expensive outfit that no one has the nerve to tell them does not exist.
That is the uncomfortable part.
Not because dealers are bad people. Not because they are unintelligent. Not because they have not worked hard. Most of them have worked extremely hard for decades.
The issue is that many dealers have spent 20, 30, or 40 years walking the same path. And for a long time, that path worked. Customers came in. Designers designed. Quotes went out. Cabinets were ordered. Problems were handled. Margins were protected, or at least everyone hoped they were.
The showroom made dealers feel protected. It gave them presence, credibility, samples, designers, and a place for customers to go.
But the showroom is no longer the fortress it used to be.
In some cases, it may just be the emperor’s outfit.
And here is the problem: nobody around the dealer is likely to say it out loud.
Their employees probably will not say it. They work there. Their suppliers probably will not say it. They sell to them. Their fellow dealer owners may hint at it, but many of them are fighting the same battle. And competitors certainly will not say it, because why wake someone up who is still sleeping?
So someone needs to say it.
The old dealer model is not as protected as many owners think it is.
The showroom is no longer enough. Product access is no longer enough. Being “good at design” is no longer enough. Having been around for 30 years is no longer enough.
The next version of competition will not just come from the dealer down the street. It will come from manufacturers, importers, distributors, online platforms, remodelers, builders, private-label programs, and companies that have figured out how to use technology to meet the customer before the dealer ever knows the customer exists.
That is the new mirror.
And a lot of dealers may not like what it reflects.
The Innovation Scorecard
I have been in this industry for almost 40 years, so let’s take a moment and look at the major business innovations that have transformed the kitchen and bath dealer model during that time.
Ready?
Design software. Ordering portals instead of fax machines. Websites with blog posts from 2018.
Maybe a few disconnected software systems thrown in there too, but most of them have never been properly introduced to each other.
Did I miss anything?
Maybe I did. But not much.
That is not exactly a moon landing.
Meanwhile, many dealers still do not have a clean view of their margins. They do not measure margin erosion consistently. They do not track mistakes in a way that changes behavior. They do not have a clearly defined customer journey, employee journey, leadership journey, online journey, sales process, service process, or showroom experience that can be repeated and improved.
And yes, I know what some people say.
“We are good at that. We do not need to measure it.”
That sentence should come with warning lights.
Over the years, I have heard plenty of people tell me they can eyeball performance, margins, mistakes, productivity, and whether the business is working the way it should.
Under those same guidelines, I could probably eyeball myself into a much smaller pant size.
The truth is simpler.
If you do not measure it, you are not managing it. And if you are not managing it, you are hoping.
That may have been good enough when the pace of change was slow and the old model still had walls around it.
But those walls are getting lower.
Stable Until It Isn’t
This is where people usually say, “Our industry is different.”
Of course it is.
Every industry is different right up until the customer finds a better way.
Blockbuster did not disappear because people stopped watching movies. It disappeared because the way people accessed movies changed.
That is the part worth paying attention to.
In early 2007, Netflix launched streaming. At that point, Blockbuster was still a giant, with thousands of stores and billions in revenue. Less than four years later, in September 2010, Blockbuster filed for bankruptcy.
The lesson is not that kitchen and bath dealers are Blockbuster.
The lesson is that a business model can feel strong while the ground underneath it is already moving.
That is what should concern every dealer owner right now.
The customer is changing. The tools are changing. The competitors are changing. And the companies that want access to the dealer’s customer are multiplying.
The Dealer Channel Is Too Attractive to Ignore
There is another reason I am coming at this hard.
The dealer channel is going to be under fire because it is one of the most attractive channels in the cabinet business.
If you are a cabinet manufacturer, importer, distributor, or private-label supplier, where do you want to sell?
Home centers? That is a brutal road.
Builder direct? Also brutal. High pressure, low margin, demanding schedules, and enough spreadsheets to make your soul leave your body.
The dealer channel has historically been more attractive because the tickets are higher, the product mix is better, and the customer often needs more help. That has made the dealer a valuable middle point between the supplier and the customer.
But that middle point is now being questioned.
Manufacturers need sales. Importers need to move product. Distributors need inventory turns. Smaller cabinet companies need margin. And many of them are starting to realize they may not need to rely only on traditional dealers to get there.
They can go after remodelers, builders, flippers, investors, and even homeowners in certain parts of the market.
And now, with better online tools, AI design and support, virtual meetings, digital selections, sample programs, and simplified product offerings, they can do it better than they could before.
That is the part dealers need to understand.
This is not the same competitive environment from 10 or 15 years ago.
For years, some of these direct or semi-direct models were clunky. They existed, but they were not always smooth. The service gaps were real. The design support was limited. The ordering process could be messy. The customer still needed help. The remodeler still needed support. The dealer had a strong argument.
And in many cases, the dealer still does.
But AI changes the math.
Technology changes the math.
A distributor can now create an online showroom. They can ship door samples. They can meet with a remodeler or builder online. They can provide limited design support. They can use AI to help organize selections, quotes, layouts, notes, follow-up, customer communication, and job tracking.
They do not have to be perfect.
They only have to be good enough for a portion of the market.
That is how disruption usually starts.
Not with perfection.
With good enough.
AI Is Not Just the Dealer’s Life Raft
This is one of the bigger misunderstandings.
A lot of dealers may look at AI and think, “Great, this can help us.”
And it can.
AI can help independent dealers improve follow-up, speed up quoting, organize product knowledge, train people faster, track issues, support designers, improve communication, and make smaller teams more productive.
In theory, AI should be a life raft for independent dealers. It should help smaller businesses compete with larger players that have more resources, more people, more marketing, more data, and more operational structure.
But here is the part that matters:
AI will not only help dealers.
It will also help the companies trying to go around them.
Manufacturers can use it. Importers can use it. Distributors can use it. Online cabinet sellers can use it. Builders and remodelers can use it.
That means the same technology that gives dealers a chance to modernize also gives everyone else a better way to attack the dealer’s position in the channel.
AI does not automatically save the dealer.
AI simply raises the speed of the game.
The Price Gap Is Real
Think about a simple example.
Let’s say there is a cabinet package that costs $10,000.
A dealer may put a 50% markup on that product, making it $15,000 to the remodeler or customer.
But what if a remodeler can buy a similar package from an importer, distributor, or assembler for $11,000 or $12,000 with some design help and ordering support included?
That remodeler now has options.
The builder now has options.
The investor now has options.
The customer may still want a beautiful showroom and a full-service experience. Many will. But not all of them will pay thousands more for it, especially in a market where affordability is already strained.
That is where dealers should be paying attention.
The danger is not that every customer leaves. The danger is that enough customers leave.
Enough remodelers test a new path. Enough builders create their own cabinet programs. Enough suppliers decide to target the trade directly. Enough online tools make the process easier. Enough margin starts leaking from the traditional dealer model.
The dealer’s biggest risk is not that everyone leaves. The biggest risk is that enough business leaks out through new paths that the old model no longer works.
That is how the slope gets slippery.
The Real Problem Is Not Technology
This is where the conversation needs to get honest.
Technology is not the hardest part.
Learning a new tool is not easy, but it is manageable. Software is getting simpler. AI is getting easier to use. Small teams can adopt tools faster than ever before. The cost of entry is lower. The learning curve is shorter.
A dealer with four to eight people should be able to move faster than a large company if the owner is focused, disciplined, and willing to change.
But that is the catch.
The issue is not whether dealers can learn the technology.
The issue is whether they can lead the change.
That is a very different question.
Because adopting technology requires more than buying software. It requires business discipline, process improvement, training, accountability, better leadership, and a willingness to look at the parts of the business that are not working and stop pretending they are fine.
And that is where many dealers are not prepared.
Not because they cannot be.
Because they have not had to be.
For decades, the industry did not force this level of leadership discipline. It did not demand deep process work. It did not require strong data habits. It did not push owners to build customer journeys, employee journeys, leadership journeys, sales systems, service systems, and technology adoption plans.
The model allowed too much guessing. Too much tribal knowledge. Too much “that’s how we do it here.” Too much “we’ve always done it this way.”
And now the market is about to send a very different message.
Someone Needed to Say It
So here it is.
If you own a kitchen and bath dealership, someone needs to tell you the truth.
Your business may be more exposed than you think.
Your competitors may not look like your old competitors. Your customer may not need you in the same way they used to. Your suppliers may be looking at other paths to market. Your remodeler customers may be exploring direct options. Your builder customers may be looking for lower-cost, more controlled cabinet programs.
Your employees may know things need to change, but they may not feel comfortable saying it.
And your peers may be too busy dealing with their own version of the same problem.
That does not mean the dealer model is dead.
It means the dealer model has to grow up.
The dealers who survive and win will not simply be cabinet sellers with showrooms. They will become better operators, better leaders, better marketers, better trainers, better technology adopters, better customer experience builders, and better partners to the trade.
They will know their numbers. They will measure margin erosion. They will track mistakes. They will train their teams. They will improve their processes. They will build stronger online and in-store experiences. They will support remodelers and builders in ways that a direct supplier cannot easily match.
Most of all, they will stop assuming loyalty is permanent.
They will earn it again.
That is the real challenge.
The emperor does not need a better outfit.
The emperor needs a mirror.
And maybe a leadership meeting.
Let's do this! Thad
What Do You See in the Mirror?
Maybe you agree with everything I wrote.
Maybe you disagree with half of it.
Good.
The goal isn't agreement. The goal is thinking.
If this article sparked questions about your dealership, your team, your technology, or your future strategy, let's talk.
No sales pitch. No canned presentation.
Just a discussion about where your business is today and where it may need to go tomorrow.
