The shape of things to come? Companies from China and other nations are exporting countertop “blanks†to the U.S. market at an ever-increasing rate. The recent Coverings exhibition in Orlando, FL, included several sources for these products.
In this Online Stone Fabricators Forum - conducted at www.stoneadvice.com - stoneworking professionals from around the country discussed how countertop “blanks†are affecting their business
Q: How are you dealing with the issue of countertop “blanks†being imported from China (and other countries selling cheaper materials)? Are you simply ignoring this issue, and hoping it goes away? Are you trying to sell against these companies, and pushing the quality/value concept (is that even possible?) Do you join in and bring in your own “blanks†and lower your profit margins? Is it worth it? Is there any way to do a quality job when you start with blanks?
Danny Taylor, Natural Stone Fabricators, LLC, Albany, GA:I generally don't have much of an issue with blanks at this time. However, I have lost a couple hotels to pre-fab “cut-to-size†tops from Brazil. The thing is, we get enough work to keep us busy at our higher-than-average pricing. We sell quality. If the prospective customer doesn't like the price, I tell them about the other guys who love to “steal†jobs from me.
I guess in a roundabout way, I'm saying we compete on a quality and service basis; not price.
Brian Briggs, Granite Guys, Inc., Ft. Pierce, FL:My company markets itself as high-end custom fabrication. We do not find ourselves bidding against people importing blanks, or even many low-ballers, unless we are doing retail. Then, I invite them to look at the pictures on my computer, which I have titled the “Hall of Shame.†We are also in the process of putting these pictures on our Web site.
I am considering bringing in vanity tops from China. One of my builders wants to drop cultured marble in their secondary baths and wants to know if I am interested in doing them. I have proposed four color selections and the blanks from China that have the integrated undermounted sink in them. I will definitely be kicking some Chinese tires at Coverings this year.
Mark Lauzon, Stoneworks, Hubbard, OR:I lost several accounts to the “Red Blanks.†I used to do a special kitchen we called the “Budget Gourmet.†It was a simple 2-cm eased edge with surface-mount sink and a simple 4-inch splash. We used to crush simple two-slab jobs for around $3,000. We made really good money on these. Most of those accounts have been lost to guys installing blanks.
Has it affected my bottom line? No. Should I bring in blanks to compete? No.
I am going to invest in heavy technology, which will hopefully make us more productive and profitable. We intend to keep chasing the high-end, high-quality segment of the market. It seems to me like doing the “Red Blanks†is like following the rabbit down the hole. Not sure I want to go there.
Mark Meriaux, The Granite Shop, Smyrna, GA:When I entered the granite business just three years ago (I don't regard myself as a “veteranâ€), we began as part of a group of fabricators using blanks (from Brazil). This was how we got our feet wet, and we learned quickly that to serve our target market, we would have to begin fabricating slabs (this was not part of our original business plan). We originally offered limited choices (six colors) and only one edge profile (eased). Every other customer wanted some stone that we didn't carry, and they wanted different edge profiles. Early on, we also encountered designs that required a 40-plus-inch-wide island (we only had up to 36-inch-wide blanks) or straight runs that were slightly longer than the blanks we had.
For these simple reasons, I believe that blanks DO NOT lend themselves to remodel or general residential work. I now look at them as “square pegs trying to fit round holes.†The many emerging shops that will try and market blanks for these projects could possibly lower the overall quality within our industry, but that will only make us stand out as the higher-quality custom shop that we have grown into.
I think that pre-fabbed pieces can provide effective cost savings on certain types of projects, namely multi-unit ones like high-rise apartments, condos, hotels, etc. Even on these types of projects, a skilled custom fabricator will likely be required to “customize†the few pieces that don't fit the building.
Steven Hauser, CIRCA, Inc., Greenville, SC:The competition is getting stiffer and stiffer as a lot of people are borrowing money and getting into the business. Each market should see at least a 300% increase in competition for the same business.
So what will people do? Some will try to get into the cutthroat business of pricing wars. If you win, you will either be better as an operator or almost out of business. Some will try to import blanks and compete. If the blanks could be processed in such a manner that it would not go against the SFA [Stone Fabricators Alliance] standard, then it would be viable. The product will get better if more knowledgeable [fabricators] buy it frequently. This will only delay the inevitable.
So what should you do? Think what has happened in other industries. Let's look at the big industrial molds. The U.S. was producing them and making money. Then people could buy equipment, and purchasing agents could farm their specs out all over the world. The lower-labor and subsidized markets won. It was a bloodbath. Several people went out of business; several got into other businesses; and a few looked at their specialty and said, “Hey what about all you people who own molds already and just need them fixed?†They oriented their business to become a JIT service provider. They got huge cranes and big trucks to pick the molds up, fix them and then send them back. A lot of purists said they didn't want that work, and they subsequently died because the cost of competition was stout.
The company that changed is growing again, but they had to use their expertise and know-how in a different way.
So, why did I tell that story? Because the granite business is changing rapidly, and soon some of us won't be able to compete. There are no ISO 9001 standards, but we at the SFA are trying to create them. When we do, others will start doing it, because (this is fact) when an idea makes sense - like slab reviews - eventually everybody jumps on the bandwagon.
It is the same with high-quality kitchens. The issue is that the material is “too good,†and it won't age out like laminate or other manmade products, so essentially you have to write that customer off unless they move or renovate again because of changing taste.
So with all of this in mind, what will you do?
1) Do as Mark [Lauzon] says and buy bigger, better machines?
2) Develop repair and maintenance businesses for bottom dwellers and hacks?
3) Develop ancillary but complementary businesses?
Although some fabricators have found success using blanks for multi-unit hotel or apartment projects, they are generally felt to be “square pegs trying to fit round holes†for custom single-family residences.
It's possible to do quality work with blanks, but up to this point I haven't seen one. I have been approached to buy blanks, but I just don't see myself competing and giving the same job if I was using full slabs (i.e. additional seams are always needed, islands over 26 inches wide can't be done, more waste, quality of stone isn't always there, etc.).
My fear is that blanks will do to the stone industry what thinset did to tile. Thirty-five years ago, a homeowner would have never considered doing tile because mudwork was and is a skilled trade. Thinset changed all that, and now anyone with a bucket and trowel does it, thus the reason many stone restoration contractors are complaining of grinding serious lippage on large-format tiles. You simply can't produce a quality product like that. I'm just speculating, but in 10 years or less Home Depot will be doing seminars and selling blanks with all the tools necessary for Joe Homeowner to do granite tops. Now that's a scary thought!
Michael Shane, Stockbridge, GA:I've been battling this issue for awhile - also competition in general. My first thoughts are to invest in equipment as early as possible, which allows you to take full advantage of the lowered labor [needed] while still producing a quality product. I'm hoping that the equipment will last at least 15 years. The first five years, there is hell to pay in leases, etc. After that, my overhead should drop in half. Hopefully, the demand and production capacity will still be in place.
Secondly, we own our location, so in 14 years another large chunk of overhead will be gone. Thirdly, I'm thinking that with very, very low overhead and high production capacity, we should be able to cash in and still turn a profit even as the prices drop. I think we have more then a few years left in this booming industry, and I want to be a part of it.
Fourth, we are trying to shift from the builder market and into the remodel/rehab market. We are now set up to sell cabinets and faucets/plumbing fixtures as well as appliances. I am going to set up a remote location/showroom this year (on the advice of another SFA member). Hopefully, this will increase our brand awareness and market share.
Finally, I am looking to invest our company's profits so that in 10 or 15 years, I won't care if there is a lot of competition in the stone world. We'll be OK anyway. I've chosen real estate and the stock market on less of a scale to do our investing. The important thing for me is that I have started to think about my retirement and what's going to happen to us when this stone ride is over.
I don't worry about the blanks issue as much as more fabricators in general. It's easier for us now because we're established, we take care of our customers, and they take care of us. I think that with a straight line machine I'll also be in the blank business, selling to other fabricators.
I came from the Subway restaurant chain, where we reinvested everything we had made - never thinking about the future of our industry. Then Subway changed their bylaws, so that stated the three-mile minimum distance rule [between stores] was no longer in effect. The five restaurants in our nice little market of Myrtle Beach, SC, became a small minority when Subway sold 40 franchises to BP [gas stations] and put six Subways in walking distance from our best location. After our sales dropped to a third or less, we practically gave the stores back. We have reinvented ourselves and are doing better then ever, thankfully. It was a tough lesson to learn then, but it has taught us to be better prepared for the future.
