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Private Labeling

By Michael Hilton

Prior to 1986, most carpet manufacturers were very selective regarding the number of dealers in a specific geographic area that handled their line. It was very rare for a consumer to find more than two retailers in a given city carrying a particular carpet brand. Also, a consumer could not expect to find a wide variety of brands at a given retail outlet. Carpet prices were comparable between all retailers of a particular brand.

In 1986, two carpet manufacturers (Shaw Carpet and SalemCarpets) began to change the landscape of carpet retailing forever by lowering prices to retailers and opening a number of retailers in a city or town. The consumer could now shop at a number of retail outlets, find similar products and actually dicker over the price.

Over the next four years, the U.S. carpet industry went through a phenomenal growth period. Retail profits, however, began to diminish and many retailers began to struggle because of increased competition and reduced profit margins. Some desperate retailers began to price carpet installations at ridiculously low margins in order to ensure their own survival. This tactic actually produced the opposite effect. As a result, the financial state of the retail carpet industry was weakened considerably.

Manufacturer's reps could recognize retailers who were beginning to struggle financially because retail carpet prices would begin to drop at the retailer and competitors would begin to complain. More times than not, this was the first step to financial insolvency for the retailer. Consumers were happy that they were able to purchase first quality carpet styles at cheap carpet prices, but became concerned when the retailer went out of business shortly thereafter. Throughout this period, those retailers that priced their products fairly, but were mindful of necessary operating expenses continued to operate.

In an attempt to maintain preferred status with major retailers, larger manufacturers created specialty carpet lines where distribution was limited to a few select dealers in a given geographic area. These retailers were given a product line that could not be shopped for competitive pricing and provided robust profit margins. It was rumored that some manufacturers even threatened to withdraw the line from retailers who offered an 800 phone number and sold product at lower prices outside their own geographic area.

Some of the smaller manufacturers could not afford to produce a special line to provide limited distribution. As a result, the concept of private labeling originated. This concept consisted of a manufacturer taking the standard product line and placing a separate labeling system on them. All color names, color numbers, style names, style numbers were changed to "hide" the true name carried by most retailers. This concept helped some retailers remain afloat by restoring profit margins.

Today, private labeling of carpet samples is good business and many retailers undertake this private labeling task on their own. It helps maintain acceptable profit margins for retailers and actually protects consumers from buying from retailers operating on short profit margins and have a limited future in business. While it is a bit difficult for the consumer to come to the conclusion that they have made a smart purchase at a good price, the continued solvency of the retailer is in the consumers best interest. Many problems can develop over the years with any purchase. Having a retail partner available to answer your questions after the sale is usually worth the $100 or so that you may have saved.

Overcoming Private Labeling

A smart retailer or shopper can usually overcome private labeling with a little more work. In the good ol' days, a consumer could select a style and get on the phone and call every retailer in town for a price quote. Today this requires physically visiting each location with the carpet sample, having the retailer inspect the style for texture, twist, pile height, and color. The retailer can then look through his/her available samples and find the same or similar style. In trying to price shop, it is usually a good idea to select more than one color from the style that you like to make it easier to track down the style at a competitive retailer. In some instances, a "signature" color may be in the line that tips off the style. If you see a signature color, make sure you take a sample of this color with you. A color such as:

  • Pay particular attention to specific labels on the back. While the labels may not identify the style, they may identify the manufacturer which will make it easier to eliminate some styles.
  • Look at the wear warranty. This warranty may provide an address. While the majority may list Dalton, Georgia, Calhoun ,Georgia, Chatsworth Georgia, or Ringgold, Georgia it will help narrow your search by providing a P.O. Box or street address.
  • Look at style #, color name and number rather than style name. Some retailers may change only the name to camouflage the style.
  • Look for an RN#. This registration number is required on each sample to identify the manufacturer or distributor of the product. This is not always reliable. As a rep, I would assist retailers in applying for their own Federal Trade Commission RN# to help the retailer or distributor.
  • Ask for a deck board or sample book of the sample. Some products are sampled in deck boards rather than cut samples. These are far more expensive to private label with special names and numbers because the numbers are often printed on the plastic deck. Also, some manufacturers use a specific format for a private label deck board. For example, one manufacturer may use a blue handle and gray header on the board. Another manufacturer may use brown handles and tan blank headers, but this is sometimes a giveaway.

Tracking down the manufacturer can be a fun piece of detective work that requires patience and plenty of perseverance. Many may feel the work is not worth the effort. After you track down the manufacturer and proper style name, then you can revisit or phone the retailers you visited and enquire about pricing for the specific style.

Regardless of whether you are able to identify the manufacturer during the "hunt", make sure the retailer provides you with the proper style name and color name after the product is purchased. Should the retailer close or retire to South America, you should be able to contact the manufacturer, 10 years following the purchase because of warranty issues. Never purchase a product where the original manufacturer is unknown. Hopefully, these hints will help make the purchase process easier rather than more confusing.

Did you know?

Shopping for carpet and deciding where to buy carpet has gotten a lot easier and a lot more confusing with the growth of online carpet retailers and discount carpet wholesalers. There are even a number of carpet manufacturers that sell carpet directly to the consumer. For large carpet discounts go to Dalton, GA and visit the 100's of discount carpet wholesalers or visit their websites listed on the carpetbuyershandbook.com.

About the Author
Michael Hilton was the original creator of Carpet Buyers Handbook. Having owned and operated a carpet wholesale company, Hilton has a vast knowledge about all-things carpet related as well as other types of flooring.

Other Helpful Links
Carpet Benefits
Purchase Decision
Budgeting for Carpet
Shopping for Carpet
Private Labeling
Where to Shop for Carpet
Carpet Measuring
Carpet Tile
Carpet Tile Installation
Indoor Outdoor Carpet
Enjoying Your New Carpet

Get a Great Deal on Carpet Prices: Consider More Than Cost
Before You Enter the Flooring Store
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