Mikey P
Administrator
I don't know of too many areas of this industry from home owners to mills, carpet cleaners to distributors or manufacturers that have not been forced to do business a lot differently than they did just 5 years ago just to survive, let alone experience true growth and prosperity. On the food chain a carpet cleaner is perhaps the one entity that has the most flexibility to change the way they do business. Right now the worst place to be in this industry is as a manufacturer or distributor.
I expect to see continued consolidation and ownership changes in manufacturing and aggressive consolidation in the distribution channel. In spite of incremental quarter to quarter improvements in durable goods manufacturing, end user consumption is making an extremely slow comeback. Too slow for the patience of the corporations that “currently” own some of the major manufacturers. There is simply not enough business to justify the equity in some of them in contrast to other areas that offer better returns to their shareholders.
A distributor has substantially more overhead and capital committed than most carpet cleaning companies. If you asked every distributor in this business if they would like to cash out and receive in full payment all the money they currently have invested in the business half or more of them wouldn't waste a minute before they took up the offer. As a carpet cleaner you might choose to fire a customer but a distributor really can’t afford to do the same thing because there are too few of his customers around to lose.
Ask a one or two truck carpet cleaning operator if they would like to be bought out in the same fashion and you might get 10% at best that would take up the offer. Ask a distributor if he would rather be a carpet cleaner or a restorer and I bet half of them would.
20 years from now this industry will be unrecognizable from what it is today so let’s try and make it as less traumatic as possible. By looking across the fence and appreciating what the other sectors are challenged with it just might help you with your own future. We’re all in this together.
I expect to see continued consolidation and ownership changes in manufacturing and aggressive consolidation in the distribution channel. In spite of incremental quarter to quarter improvements in durable goods manufacturing, end user consumption is making an extremely slow comeback. Too slow for the patience of the corporations that “currently” own some of the major manufacturers. There is simply not enough business to justify the equity in some of them in contrast to other areas that offer better returns to their shareholders.
A distributor has substantially more overhead and capital committed than most carpet cleaning companies. If you asked every distributor in this business if they would like to cash out and receive in full payment all the money they currently have invested in the business half or more of them wouldn't waste a minute before they took up the offer. As a carpet cleaner you might choose to fire a customer but a distributor really can’t afford to do the same thing because there are too few of his customers around to lose.
Ask a one or two truck carpet cleaning operator if they would like to be bought out in the same fashion and you might get 10% at best that would take up the offer. Ask a distributor if he would rather be a carpet cleaner or a restorer and I bet half of them would.
20 years from now this industry will be unrecognizable from what it is today so let’s try and make it as less traumatic as possible. By looking across the fence and appreciating what the other sectors are challenged with it just might help you with your own future. We’re all in this together.
