Finishing Touches, V2I5

More Than One Way to Sell a Shed (Part 1)

In traveling around the country, you will find many different types of shed lots. Some will be full store fronts with indoor and outdoor displays of many outdoor products ranging from sheds and other portable buildings to poly furniture and windmills.

Others will be a few sheds on display outside of a minimally related business, like a farm store or car repair shop. Still others will be two to 30 sheds and other portable buildings parked on an empty lot with a phone number to call if you are interested in hearing more about the buildings you are looking at.

Which type is more successful? Which business model do you subscribe to?

As you look around at the portable building lots, you will tend to find that most stem from four basic shed builder types: full retail, retail-dealer network, retail-unmanned lots, and wholesale. Let’s take a look at these types and some of the advantages, and disadvantages, they present. In this issue, we’ll examine full retail.


Full Retail

A full retail shed manufacturer will usually have several sales locations controlled solely by that manufacturer. Each location will have a full-time salesperson on the lot during most of the usual business hours. The lots will most likely carry only that manufacturer’s portable offerings and possibly some related products, like poly wood furniture and carports, among others.

The key advantage of the full retail shed builder is control. You control the product line(s), your website, working hours of the sales staff, the content of marketing materials, and most importantly, the message about your product that you want to go to your prospects.

If you go the full retail route, you must have a full-time, dedicated sales force employed at each of your lots to maximize the closing percentage of visitors to your sales locations and leads generated from other sources. These salespeople are tasked with greeting and selling to the majority of customers that come on your lots or contact you through website and other means. The sales staff, since they are employed by the full retail manufacturer, can also be your merchandisers, marketers, and do the follow-up calls and visits to your prospective customers.

The biggest disadvantage of full retail is overhead. Aside from the cost of inventory, you will also likely be responsible for your website, lot rent, cost of signage, utilities, delivery expenses, even coffee and water that you offer to your customers.

Further, since your sales staff is likely employed by you and not just working for a standard commission on a 1099, you will be on the hook for payroll taxes, salaries of salespeople, bonus structures, and maybe even benefits depending on the total size of your operation.

You can then add to the above expenses the cost of possibly using a customer relationship management (CRM) program. This CRM program captures pertinent information about your prospects into a database that your sales staff then uses to follow up with customers and market to prospects.

The total success of the full retail builder is contingent on your ability to close as high a percentage as possible of your prospects that view your website and visit your sales locations.

There is one other type of full retail lot to consider. Many sales lots buy their inventory wholesale from one or more manufacturers. These lots are likely responsible for their own marketing and delivery costs as well. They would have similar advantages and disadvantages as a manufacturer that is full retail. Since they don’t manufacture sheds on their own for the most part, we won’t delve too far into this type of full retail in this article.

Next time, we’ll look into retail with a dealer network.

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April/May 2024