Kitchen retailer Riddle and Coghill in Leith, Edinburgh, has said they make “a proper margin” on the major domestic appliances they sell, batting away a common complaint that online shops have made it impossible to make any money on appliances.
A number of kitchen retailers have told kbbreview in the past that they have had shoppers in their showrooms on their smartphones trying to drive a bargain by showing them lower prices online.
But in an in-depth interview with kbbreview to be published in December, Ian Coghill (pictured left), a co-director at interior design firm Riddle and Coghill, said: “You can’t be all things to all men. If you look at your typical internet prices, we can make a proper, acceptable margin on the prices they are advertising if we buy correctly.
“It’s knowing your business and knowing how to get the best prices from your suppliers.”
He told kbbreview that to maintain a margin from appliances, “you have to ask the right questions to get the best terms”.
Riddle and Coghill mainly sells Siemens and Miele appliances from its Leith shop, which turns over around £3 million.
Coghill said: “Some retailers inflate their furniture prices so that they can sell appliances with single-figure margins.”
But he added: “We make proper margins on every appliance we sell and we don’t let our margins on furniture carry the appliances.”
The Scottish businessman praised Miele for not engaging in “bastardising” the value of its products through internet discounters.
To maximise earnings on appliances, Coghill recommends being loyal to suppliers and giving them volume.
“It doesn’t have to be huge volumes,” he said. “It needs to be pro rata with your business. We have nigh-on 20 staff and we do a reasonable turnover of goods with our suppliers. We buy approximately £2m worth of goods from our suppliers.
“We need them every bit as much as they need us. We have weeded out the people that aren’t good suppliers and we’re now in bed with the people we can rely on.”
In return, he said suppliers should show the same loyalty, taking their retail customers into consideration when working out a marketing and merchandising strategy as without the appliances being displayed and demonstrated in showrooms, he suggested that manufacturers would not get the same level of business online.
He also cautioned suppliers about opening up another showroom near an existing retailer, which would “dilute” business from both parties.
To combat ‘showrooming’ – where people go into the showroom, check out the appliances and then buy them online cheaper – the firm’s other co-director Gus Riddle (pictured right) made a suggestion.
“When people come in and you know they are door-kickers and are maybe just checking our the appliances, you could give them a voucher, so that when they buy online, they can enter the code and we would get a royalty for them coming in and using our showroom for someone else’s benefit.”
• See full profile on Riddle and Coghill in the December issue of kbbreview