Most dealers believe you have two choices when it comes to commercial flooring: Main Street commercial, and huge GC bid projects. Most flooring retailers will take Main Street jobs because they are not much larger or more complex than residential, and the margins are generally decent. However, most retailers generally avoid big GC projects because they come with big challenges and high risk, including extremely low margins, gigantic outlays of capital for materials (often into the hundreds-of-thousands of dollars), and you often don’t get paid until 90-120 days after the job is completed. If a GC fails to make payment, it can easily put the smaller dealer out of business.
HOWEVER, there is a third category of commercial that is low risk, and can be very lucrative. It’s called negotiated commercial. My guest Steve Hillis is a commercial flooring industry veteran who owned his own commercial flooring business. He is an expert on this segment of the industry, and has held senior level positions with Mohawk, Tandus, Milliken and Beaulieu.
