Follow Up: Winning Through Hard Times

By K. Schipper

Back in the mid-2000s, the stone fabrication industry appeared headed toward a schism, with mom-and-pop, single-kitchen-a-day shops on one side, and heavily automated shops churning out 10, 20, even 30 kitchens each day on the other.

And woe to anyone caught in the middle.

The collapse of the housing industry in 2007 and 2008 did several things to the industry. For one thing, it put some sophisticated used equipment in the hands of smaller shop operators at reduced prices. It also pulled the plug on many fabrication projects, from single-family homes to subdivisions and commercial developments.
 
So what’s happened to the shops set up to make a profit due to efficiencies of scale? Many of them, including these three previously profiled in our Stone People section as Morningstar Stone, Wilbedone Inc. and Pollux Mfg.,are still there – but things aren’t quite the same as they used to be.

NEW PRODUCTS, NEW APPROACH

TOPSHAM, Maine – Although what began life as Morningstar Masonry back in the mid-1980s is now Morningstar Stone and Tile, owner Nick Whatley says the latest name is only one small part of changes the company has undergone since 2008.

Click photo to enlargeAt that point, Whatley’s company ran under the name for several years under the name of Morningstar Marble & Granite, and strictly focused on the continuous production of countertops.

“I looked around and noticed I had people who were experienced on tile and at the same time people where asking me if we did tile,” he says. “I thought, ‘Well, we’re in the middle of a recession; why not try to sell something else?’ We started adding different lines of tile to our offerings, and it’s been good for us.”

While tile brought in some additional jobs, Morningstar remains committed to the countertop business –  although Whatley says that changed in several different ways, and the company along with it.

For one thing, Whatley’s preference is for residential jobs, although he says he’s now courting some commercial work. And, while his workload a few years ago skewed strongly to new construction, today it’s closer to 50-50 with renovations.

A bigger concern is what the economy did to pricing. While his preferred client is one with a higher-end project, he says even there people are coming to him with three or four prices they’ve gotten from other companies’ websites.

“They were coming in with a very low price that had been substantiated in their heads by means of research on the Internet,” Whatley explains. “So, we really had to look at our pricing schedule and how we do things.”

Traditionally, Morningstar priced each job out as a custom project. Now, Whatley says it’s more a case of the client ordering from a menu of options, with each charged accordingly.

 “They’d come in thinking granite was $35 ft², but what they were asking us for was something that’s really $120 ft²,” he says. “Now, we’re showing them that if they just want a basic job like they’re seeing on the Internet, we can do it for $35 ft², but if they ask for 16 additional details, those all come with substantial prices, and what they’re really asking for is $120 ft².

“I’m in a place where I’m pricing things competitively by showing them we can offer more, and it’s turned things around hugely for us.”

The other big-dollar area where Whatley pays close attention is with slabs. He likes to keep a good selection of materials in stock, because he says it’s a strong tool to catch some clients.Click photo to enlarge

“If you have a slab and it’s available, it’s sometimes compelling enough to stop somebody’s shopping right there,” he says. “They’re suddenly ready to buy.”

However, he says suppliers are less-willing to allow shops to take materials on consignment. His response is to buy half the bundle up-front and get the supplier to offer the other half on consignment.

“We’ve had some pretty good response to that,” Whatley says. “It’s allowed us to get into a little bit higher grade of material without such a huge investment on our part.” And, he adds, by having six of a particular stone, it maximizes efficiency and reduces waste.