“Is the decoration industry really a ‘profiteering’ business?” This may seem like a ridiculously high quotation, but if you really open the accounts, you will find that the apparent price and whether you can actually make money in the end are not the same thing at all.
To be honest, I have heard this topic too much over the years.
As soon as someone gets a house, the decoration will most likely be talked about in the group, at the dinner table, or when relatives meet.
Especially when the quotation comes out, everyone’s first reaction is the same: Why is it so expensive?
It costs thousands to paint a wall, tens of thousands to build a cabinet, and once the water and electricity are changed, the money flows out like running water.
Some people jumped to the conclusion on the spot, saying that the decoration company was not making money, but robbing money.
Don’t tell me, this kind of idea is really not unusual.
Not to mention how laymen see it this way, even many people who are new to decoration are easily intimidated by superficial numbers.
After all, when buying things, you pay with one hand and get the goods with the other. The price can be compared at a glance.
But decoration is different. It is not just a matter of buying one thing, but a whole set of things, including materials, labor, design, management, transportation and after-sales, all mixed together.
If you just look at the unit price of a certain material, it’s easy to think that the price difference is scary. But once you take the whole thing apart, you will find that a lot of money is not the “net profit” you imagined.
The most common misunderstanding is to compare the decoration quotation with the market price.
For example, if you go to the building materials market and see a floor tile that costs 890 yuan per square meter, and when you look back and see the quotation sheet it says 145 yuan, you will immediately feel uncomfortable.
Another example is that a bucket of paint sells for more than 300 on the Internet, and the decoration company sells it for 600. Anyone who reads it will murmur: This is too cruel.
But the problem is that what the decoration company gives you is really not just the brick and the bucket of paint itself.
It also includes delivery, handling, losses, on-site coordination, worker cooperation, and even responsibilities after problems occur.
When materials go from the warehouse to the construction site, it is not as simple as “carrying them there.”
Whether the elevator can be entered, whether to allow storage downstairs, what to do if the tiles are damaged, and how to deal with color differences in replenishment, all these need to be monitored by people.
What you see in the building materials market is the retail price, and what the decoration company quotes to you is the price that packages a series of services and risks.
The two cannot be pushed together.
Going deeper, one thing that many people don’t see is the customer acquisition cost.
Nowadays, the life of decoration companies is not as easy as everyone thinks.
In the past, I could still get jobs by relying on introductions from stores and acquaintances.
It can’t be done now, the platform needs to be invested, phone calls need to be made, short videos need to be made, salespeople need to run around, and designers need to keep measuring rooms.
From the first consultation to the final signing of a contract, a customer may chat back and forth for half a month, a month, or even longer.
But even after talking for so long, we may not be able to make a deal.
Some companies consult a hundred people, and it’s good if they can sign ten in the end.
For the ninety people who didn’t sign, the previous labor, time, and promotion fees would all have to be shared on the ten people who signed.
This is why many people think design is “free”.
In fact, nothing is really free.
Designers don’t just follow the northwest trend. An experienced designer spends a lot of time and energy on drawing pictures, changing plans, accompanying material selection, and traveling to the site.
It’s just that many companies don’t charge design fees in order to sign contracts better, and hide the money elsewhere.
On the surface, it looks like the customer is taking advantage, but in fact the cost has not disappeared, it has just been calculated in a different way.
There is also construction site management.
Many people who have never decorated a house think that decoration is too simple and think that it is enough for workers to come in and do the work.
But anyone who has actually done it knows that the biggest fear on a construction site is not that the work is slow, but that no one is watching.
The water and electricity come in today, the masonry workers will connect it tomorrow, the carpenters will measure the dimensions the day after tomorrow, and then the oil workers, installation, and cleaning will be completed one after another.
When will the materials arrive, are the sizes correct, who will go in first and who will go last, what to do if there is a conflict on site, what to do if neighbors complain about noise, these are not things that workers can solve by themselves.
What you see is a few people working, but what you don’t see is a few people behind the scenes who have been wiping butts, filling holes, and saving the day.
And the most troublesome part of the decoration industry is that it has too many variables.
Especially when it comes to renovation of old houses, almost no company can solve all the problems before starting the project.
When the wall was demolished, it was found that the pipelines inside were in a mess; when the floor was smashed, it was discovered that the original waterproofing had long been rotten; when the ceiling was opened, it was discovered that the beam positions did not match the drawings at all.
The same goes for new houses. The houses delivered by some developers may look new on the surface, but actually have many problems.
There are hollow bulges, internal corners that are not straight, the location of sewer pipes is off, and the wall base is poor. Many problems cannot be fully understood before construction.
So sometimes adding items is not entirely intentional to set up a trap.
Of course, there are companies in the industry that attract customers at low prices and increase money later. This is really annoying and has ruined the reputation of the entire industry.
But we have to admit that other additions emerged during the actual construction process and it would be impossible not to do them.
To put it bluntly, decoration is not like buying groceries in a supermarket, where the price is always fixed. It is more like clearing mines while constructing.
Some mines you know in advance, and some you can only see after digging them out.
After-sales is also an account that many people tend to overlook.
The day the renovation is completed is not the day things end.
Many of the truly common problems only arise after moving in.
For example, there are cracks on the walls, deformed cabinet doors, loose sockets, bad smell from the floor drain, hollow tiles, and even water seepage in the bathroom.
Once these problems arise, the first thing customers look for is not the material supplier or workers, but the decoration company.
Then the company will have to send people to look at it, repair it, and coordinate it.
Small problems are fine, big problems may even require rework.
From the customer’s perspective, of course you will feel that this is what it should be; but from the company’s perspective, these are all follow-up costs, and they are risks that must be reserved in advance on the day of signing the contract.
Some people may ask, if that is the case, wouldn’t the decoration companies be all aggrieved?
That’s not the case.
In this industry, there are indeed a group of people who make quick money, or even make money by cheating people.
We sign you in at a low price, and then add items one by one; the materials are said to be branded, but in fact they are OEM; we promise to do the construction ourselves, and eventually outsource it, and we take a commission from the process.
Why do such companies always make people think they are “profiteering”?
Because it does not make money from normal profits, it relies on poor information, contract pitfalls and your lack of understanding.
In the short term, this approach makes money come quickly, and it does look like huge profits on the surface.
But over time, it became basically unstable.
If two or three businesses in a community are destroyed, the reputation will immediately become bad.
Nowadays, people are different from before. If someone’s home is decorated well or not, the owner group will know by asking.
Online reviews, feedback from neighbors, and photos from the construction site are all impossible to hide.
Many companies that rely on routines to make a living, after seeing their success in the first two years, either close down or start over with a different name.
On the contrary, for companies that have been in business for a long time, profits may not be as high as everyone thinks.
Some bosses seem to have made a lot of output in a year, but when the net profit is calculated, it is really not much.
Materials must be paid in advance, workers’ wages must be paid on time, store rent, employee wages, platform investment, taxes and fees, everything cannot be escaped.
Not to mention that some customers are now slow to pay, and the final payment is still pending after the project is completed.
If you encounter someone who is unreasonable and delays payment endlessly for a small problem, the company can only waste money.
Don’t look at the contract amount of hundreds of thousands. What actually comes into your pocket is sometimes very thin.
There are two categories that are really relatively profitable.
One type is small companies that have built a reputation through word-of-mouth. They do not advertise much and rely mainly on referrals from old customers.
The cost of acquiring customers for such a company is low, the boss himself is on-site, the team is not so bloated, and a lot of unnecessary expenses are reduced.
Although the profit per order may not be particularly high, the advantage lies in stability, and every order is one.
The other type is those who have made the process more mature and specialize in standardized packages or partial renovations.
The materials are fixed, the process is fixed, the workers are well-cooperated, the efficiency is high, the loss is low, and the management is smooth, so that the profits can be slightly better.
After all, are there any “huge profits” in the decoration industry?
Yes, but it’s not that the entire industry is making huge profits, but some irregular gameplay looks like huge profits.
If you take those companies that rely on routines and deceive people as samples, then this industry is indeed quite dark; but if you look at those people who work honestly on the construction site, follow the process, and are willing to take responsibility when problems arise, you will find that they earn really hard money.
Many times, people think it is expensive, not necessarily because the other party is really bad, but because the decoration itself is expensive.
It involves many people, many links, and a long time, and there is no room for error.
Rework anywhere will cost you real money.
In addition, labor costs are getting higher year by year, and it is becoming increasingly difficult to retain good masters. If you want to reduce costs, you may end up reducing quality, not profits.
So instead of saying that the decoration industry is “profiteering” from the very beginning, it is better to look at it from another angle.
A high quotation does not mean that the other party will definitely earn more; a low quotation does not mean that you will take advantage.
Many times, the cheapest quote ends up being the most expensive.
Because what was saved in the past may be taken back little by little, or even more, through additional items, wrangling, rework, and missing after-sales services.
If you really want to decorate, the most important thing is not to get angry at the numbers in the total price, but to see clearly how each item comes from, what the materials are, how the craftsmanship is done, what is included and what is not included, and who will be responsible for any problems later.
If you ask these questions thoroughly, you can actually avoid many pitfalls.
I’m just afraid of saving trouble. I didn’t ask clearly at the beginning, and then I just relied on guessing. In the end, I spent money and got angry.
The decoration industry has indeed received a lot of criticism in recent years, and there is indeed room for criticism.
But to say that it is generally huge profits, I think this is not accurate.
To be more precise, this is an industry that looks lively but is actually very painful.
Some people make quick money there, while others make a living there; some treat clients as a one-time deal, while others really want to build a house in a down-to-earth manner.
Now everyone’s information is becoming more and more transparent, and owners are becoming more and more understanding. Just relying on deception is no longer as effective as before.
Most of the people who will stay in the future will be those who are willing to explain the price clearly, work hard, and take care of the after-sales service.
As for those who just want to take advantage of the loopholes and run away, sooner or later they will be screened out by the market.
After all, money is not easy to make, and the same goes for decoration.
What you see is a quotation, and what others are carrying may be the costs and risks of the entire chain.
I really want to know whether this business is “profiteering”. Don’t just look at the unit price, but look at the overall situation.
If you pierce this layer of window paper, you will know that many things that look particularly expensive may not really be very profitable; and those that look particularly cheap are often the most likely to make people suffer.
