Dealer Perspective: Unseen Margin Losses in Bath Fitting Industry

Introduction

During a recent market visit to tier 2 towns near Delhi, we engaged with several dealers and distributors specializing in hardware, sanitaryware, and marbles. As a manufacturer, interacting with these customer-facing businesses offered valuable insights and learning opportunities. These visits not only allowed us to understand the perspectives of dealers and shop owners but also provided a chance to converse with customers and observe their purchasing behavior.

Hidden Margin Leakages in CP Fittings

In the context of CP (Chrome Plated) fittings, there are several margin leakages that dealers might not be fully aware of. These issues are especially common in tier 2 and tier 3 cities and gradually reduce their capital.

PVD Finish Taps

Most retail owners expressed that they are required to display taps with PVD finishes such as black, rose gold, and gold. However, these products rarely sell, as customer demand for colorful taps is minimal.

This reluctance stems from the fact that taps are generally installed during new construction or repairs, and consumers often avoid colorful taps unless they are very particular about design. Many believe these taps do not suit the overall aesthetic of their homes and worry about the risk of color fading and durability of the finish.

When we considered adding these collections to our product offerings, the dealer network responded strongly against it.

The Price War with Digital Showrooms

Consumers frequently visit physical shops to experience products firsthand and inquire about pricing. However, if the same products are available online at lower prices, customers tend to purchase online. Dealers attempt to match these prices, but this practice ultimately cuts into their profit margins.

Despite this challenge, we firmly believe in maintaining an offline presence at dealer outlets with extensive product displays.

Online is for building the community but offline is where the real sales happens

After-Sale Service

Although most brands provide after-sale service, issues in CP fittings often arise from improper installation or hard water, which companies typically exclude from warranty claims. To maintain customer satisfaction and receive favorable reviews, dealers absorb the costs of sending plumbers and replacing tap parts. When complaints occur, customers are about 80% more likely to approach the dealer first before contacting the company’s customer support.

We offer support directly to dealers by providing free replacement parts and covering plumber costs for servicing PRP products during the first year of installation.

Conclusion

These fundamental challenges faced by dealers often go unnoticed by salespeople from established companies, who are focused on achieving sales targets. However, addressing these concerns presents significant growth opportunities for emerging startups in the current market.