Traditional window companies wonder about the quality of an installation that takes half as much time. “You’re pulling out the trim stops, pushing in four screws, you caulk it up and go,” notes Talmon, of Larmco Windows. “And there are people who are going to say: ‘Well, it’s better than my 80-year-old window.’”
Mike Kelly, owner of Kelly Window & Door, in Cary, N.C., owned a Window Depot USA dealership for a year. His original intention was to rehash no-sales. Kelly made one of his Kelly Window salesmen a Window Depot USA rep. Finding installers was a bigger problem. To make sufficient margin on the low-price sale, Kelly, who was paying his regular installers an average of $70 per opening, needed to find subcontractors who would install for half that. He couldn’t.
“I interviewed a lot of folks I could pay $35 to, like a lot of the low-price,” he says. “But I couldn’t feel good about putting them out there with my name attached.” Ultimately, he ended up using his regular installation crews — “they’d just change out their hats and shirts” — at their regular rates. That cut his already “razor-thin” margins to unsustainable levels.
Low-price companies also squeeze overhead costs by doing away with conventional sales commissions. Where traditional home improvement companies pay reps 8% to 12% on sales, and often throw in bonuses, Window World dealers pay reps a set amount for each item on the price sheet. So, using the earlier example of the Window World Series 6000 window, and supposing that the total job involved 10 such windows at the listed rate of $15 per window, the sales representative would earn a commission of $150, in addition to smaller commissions on any additional services sold, such as capping. So, on a job totaling $3,005, the rep would net $175 at most. And he would have to sell two jobs to pocket as much money as he would working for a traditional home improvement company.
For low-price reps, the upside is that homeowners, convinced they’re getting the absolute best price, are often receptive. And they like the idea of getting a quote without a presentation. “People like to buy. Not to be sold,” says Castonguay, citing the comparatively stress-free pitch he now delivers. “I would be surprised if you could point to one single consumer who wants to buy [the traditional] way.”
But traditional window replacement companies maintain that windows are a complicated product, which involve construction; that they’re typically a far larger purchase than consumers are used to making, and that consequently, homeowners must be educated in order to make the kind of informed buying decision they won’t later regret.
“If someone goes in and talks [to the homeowner] for 25 minutes, [the homeowners] have no clue what they’re buying,” says David Braymiller, president of Braymiller Builders, a home improvement company in Hamburg, N.Y. But getting that time to spend with homeowners is becoming more difficult. “It’s easy to give people a basic product for a low price with fast in-and-out,” Talmon says. “It’s hard selling the Rolls Royce that requires a two- or three-hour presentation so people know what they’re getting for their money. That takes tremendous effort and training.”
SEA CHANGE? Arguments rage back and forth, becoming ever more acrimonious as low-price companies gather more dealers — by the end of the year they’ll have close to 500, if goals pan out — and sell more windows. Some within their ranks envision a scenario in which low-price companies share the market with “boutique” window replacement companies, selling upscale products made of composites, wood, or fiberglass. Those now selling the middle — that is, vinyl windows at $450 to $750 per unit — would be displaced.
Mike Roncato, vice president of sales for Sunrise Windows, a Michigan vinyl window manufacturer, believes that low-price companies are “taking market share away from the smaller contractor” rather than the home improvement company that invests in lead generation and sales training. But others say it’s not only the small contractor getting socked; all kinds of window companies are.
“We believe they’re a factor, that they’re taking market share,” says Ken Moeslein, owner of Legacy Remodeling, in Pittsburgh, which sells about 4,000 windows a year at an average price of about $600 and whose window sales last year were up in the double digits. “Their message is purely price. Ours is quality, value, energy efficiency, and all the benefits you’d hope for in a window company.”
