April 2007 Archives

Interesting mention in a recent Seattle newspaper from a very prominent VC in the area. Olympic Venture Partners (OVP) is a very well known firm in the NW area. Anyway Lucinda Stewart mentioned a number of possible IPOs in the state of Washington potentially in 2007 and we were mentioned. Although I won't comment on that topic specifically, I am intrigued by the awareness. Especially because I have not yet had the pleasure of meeting Ms. Stewart. (although she serves on the board of directors for a company that is run by a trusted acquaintance and he says she is brilliant!) I agree with him. ;)

VC COMMENTS (scroll to bottom of article.)

http://seattlepi.nwsource.com/venture/300359_vc19.html?source=rss

Fuel is just off the charts expensive. I am hopeful that it will come down soon, but it is annoying and therefore we keep removing brands, items and products from our free shipping offer. That reduction will continue.

I found a cool map that shows the gas prices as a national map of the US - as a temperature type map color coded by price. Check it out. Gas Buddy

Interesting side note regarding my recent trip to China, I was meeting with a supplier at the show and noticed someone stop by take our picture and keep walking on. I forgot about it until I got an email last week directing me to this page: DOMOTEX CHINA FLOORS SITE

The picture on the right is a snapshot of myself and one of our favorite suppliers talking business on the homepage of the show. Anyway. Just a sidenote.

Got a call from a nice reporter from the Dallas Star Telegram and we talked a bit about bamboo. (mmm - say that 5 times fast.) Anyway I thought it was a nice article that incorporated several topics and other experts regarding bamboo flooring.

Anyway I thought it would be fun to link to the article so here it is:

STAR-TELEGRAM BAMBOO ARTICLE

There is a growing shortage of laminate in the US related to an ITC ruling which blocks all imports from any country that are not licensed by unilin or valinge.

This is causing the base price of the builder basic to go up in price - although more than just the license fee.

Overall I just want what is best for consumers and I want to be able to deliver products at a competitive price - so I think this is a limited set back and will long term only result in 2-3% price addition that is paid to unilin as their patent royalty. Short term it is causing 20-30% on the low end for products to jump because people are worried about importing from China, Canada and Europe.

Floor Covering Weekly

More Information

Unilin's Site with Folks Paying

The topic of subfloor preparation is a common one when you think about a new flooring project. My quick tip on this is to make sure that you follow the guidelines that are appropriate for the flooring you plan to install. Carpet (depending if it is glue down or stretch in) requires less prep than some other floors and floating floors may require less than a glue down vinyl or ceramic tile. All of those levels of subfloor preparation will vary based on the flooring that you are putting in and the current subfloor conditions.

I will discuss this in deeper detail in the future, but I just wanted to reiterate that this is a key aspect of a successful flooring project.

That's my TIP O' THE DAY.

Well I am off to check out some locations in the bay area of California. We are planning on putting a bunch of locations in this region to better serve our customers. It is clear that somewhere between 18-25 locations can fit in the great bay region, so we have to move fast to capture that opportunity. We already have a strong nucleaus of talent in the region to build around.

Based on our mapping and tracking we have literally tens of thousands of shoppers and customers in this region already that we serve online and via our current local stores so now we are adding additional investments to better serve the area.

So I will post anything interesting during my travels, but it may be a bit quiet over the next couple days.

Well I am not sure what I did to tick off the good folks at Home Depot (The Home Depot, Inc.
(Public, NYSE:HD), but it is clear that they are not big fans of our little enterprise in Houston, Texas. This story is about the Home Depot that is located close to iFLOOR Houston.

Let me say that in general I know there are lots of great people at the Home Depot. And we have sent thousands of customers there to tie off the loose ends of their flooring projects or to get tools related to the flooring installation or whatever. (Although if you are shopping for hardware online check out www.cornerhardware.com as a great alternative.)

I have maintained for years that they are a great source for tools and other general home improvement needs, but I personally believe that flooring in something that should be dealt with by specialists. The fine people working at HD often find themselves moving from department to department without specific training in their new area of responsibility. It doesn't matter if it is lighting, appliances, flooring, hardware, tools, garden or whatever the area is; there are skills and knowledge, let's call it experience and focus that can help customers get to the right solution. By the way I think Lowes is also equally capable of helping folks with tools, gardening and that other stuff, but they are equally weak on flooring compared to a specialist. My point I guess is leave flooring to the professionals.

Before you send me a flaming message, let me acknowledge MANY MANY experienced flooring professionals at the Home Depot and Lowes, but the chances of finding one in the flooring department that is available when the average customer shows up to shop for flooring I think is about as likely as hitting the 10,000 dollar scratch ticket that you can buy from the local gas station. Not bloody likely.

I do believe that their continued focus on the flooring category will only continue to advance their knowledge and capabilities in the future therefore my job remains a tough one to stay ahead of the competition. I think that all flooring specialists will continue to face a challenge from big boxes despite their currently tiny share of the total flooring market.

Ok, so what got me on this rant? Well we opened a store in Houston, Texas not long ago. And I am not going to deny that having a location close to a big traffic generator is a logical part of our real estate concept. Costco, Ikea, Lowes, Home Depot, Walmart or whatever is a natural traffic generator. Now am I giving away a million dollar secret? Maybe. I doubt it. Floor Covering Weekly published an article in 2002 that basically quoted a dealer saying get as close as you can to a Home Depot and let them drive customers to you.

That article was often credited with annoying Home Depot executives so much that they started opening the "The Flooring Store" by Home Depot near their own locations. They recently decided to close all of those locations to refocus on their core business, which by the way I think is very smart. Anyway that's another story. But my question is, “Is opening a location in the vicinity of a Home Depot enough to tick them off?” If so do they ask who they tick off when they open a new location? This is still America baby and we can open wherever we want! We try to be friendly with our neighbors including the competitors, but let the customer chose where they ultimately want to buy.

So here we are a little company just trying to put food on the table and we open in Houston, Texas with some great folks leading the iFLOOR charge. The location is brand new and owned by a really cool contractor landlord and is very close the freeway and the Home Depot. It is great on so many levels.

So we are minding our own business and growing iFLOOR Houston in a very impressive way right out of the gates and suddenly we get a call from our Houston location. They report that Home Depot is blocking our back entrance driveway which is where we unload our trucks. Our trucks have to physically drive through the HD parking lot to back into the loading area. Well HD decided that they no longer wish to have that happen. So they blocked us with pallets of concrete blocks. Many pallets.

We can no longer get trucks into that location through the back, however, I am proud to report that Cleo, Kevin, Deric and Roman are getting it done ANYWAY. They were not intimidated. No, they just load through the front doors. Inconvenient? Sure. A game changer? Not a chance.

Our resolve has only increased.

I have pasted the Google Maps Sat view below to illustrate how close we are to the HD and below you can see the photos of where they blocked our access. But the resilient team of iFLOOR Houston took out the forklift and raised our banners. We will have parking lot sales, balloons, signage and anything else we can do to resist being hammered by the big orange store. We will not surrender!

You can see in this photo the stacks of pallets that Big Orange stacked in front of Little Orange. ;)

At iFLOOR we have been a 24 hour - seven day per week - organization for years. We have only closed only for brief windows of 3-8 hours during the high holidays.

Even at the local stores we are often open Sundays and extended evening hours to try and accommodate our customer's busy schedules. There are only a couple holidays that we take the day off for.

From time to time as a company we struggle to balance our desire to serve our customer with our own personal lives, families and commitments and to be honest there can be conflict.

We aspire to be wherever our customer needs us; WHENever they need us. That can be taxing on our families and our other interests beyond our work lives. Although personally I can't imagine why anyone needs a side interest when you already have flooring, but I digress. ;)

So this past week during our quarterly review meetings the field leaders of the store chain came forward and said, "Hey, we'd like to be off on Sunday. It's better for us, our people, our families and long term it will be better for our business and our customers. And to help offset the customer impact we'll stay open a bit longer in the evenings where we need to."

I applaud the courage that it took to even bring up this topic when the most obvious point of resistance would be the potentially a lower service level to our customers and lost sales.

Further I salute the senior leadership team responsible for the store operations who just after hearing the idea quickly internalized this concept and then became advocates in favor of it too.

So they made a decision. And I stand with them. They chose to do the right thing for our people.

I am pleased to report that, starting in May, we are going to experiment with the concept of being closed on Sundays in local stores and warehouses. We will be adding some more evening hours in some regions to make sure we are still as accessible as possible. We will maintain the 24/7 coverage on iFLOOR.com automated online order tracking system, Live Chat and our telephones to make sure we are balancing the high service level our customers expect and deserve.

To be honest, it is a risk. Sometimes doing the right thing is a risk, but it is the right thing to do for our people and their families. I believe it will result in a higher service level for our customers in the long run too.

I am confident that our customers will understand this choice and embrace the personal aspect of this choice as it relates to our staff and their families.

Furthermore I also believe that the commitments from our online group to hold the line on maintaining super high service levels will offset any inconvenience found as a result of this decision. Customers will be able to call our toll free line, engage a live chat or use our online ordering or tracking system on Sunday or other off times.

So although we reserve the right to be wrong and make appropriate alterations in the future I feel this is the right thing to do and I couldn't be more proud of the leadership for making it happen.

I have been jammed this week with quarterly review meetings, board meetings, other meetings, normal meetings which have all been very productive and great to have folks from around the company and the country in to share how to continue our advancement.

However, I have been remiss in posting as often as I like so I thought I would dig out a couple of the photos from Domotex China 2007 (CHINAFLOORS) -

Below is my award for the BEST exhibit for their total committment to the theme and great execution of it as well. It was a stunning booth. (I didn't end up going into it because they seemed too expensive - so there is one for the marketing department.)

Nevertheless here are some photos of a stunning tribute to Rome.

It was great to see TY in the Bensenville store out on York road waving at customers and passersby. A friendly face and empathetic ear goes a long way during the very frustrating flooring shopping process. Great job to Ty and the team for spreading good cheer!

We have a special in store event on Saturday (4/21) that we have never even mentioned on the website or blog before. Some of the supply chain has worked with us to organize some really interesting prices combined with LONG term financing. However, since they are basically working with us to sell below retailer costs it can't last long. That is why it is a quiet event - 1 day only and in store.

It will be fun to have folks come out the the locations and meet some of the store staff who will have some 1 day only opportunities for customers on their tour guide super secret price list.

I am excited to have my customers get access to this special opportunity! (the only advice I have is that some of the items sell out before the end of the day so showing up early has given early birds in the past the best access to offers!)

Just a note in general. I have repeated this advice many times, however, I would like to reinforce this:

Wood based products are not ideal for bathrooms - especially ACTIVE bathrooms.

Wood based products include laminate, hardwood, engineered wood, bamboo and cork. All of these flooring products are made mostly of wood or wood products. Wood and water are not compatible.

Now just for the sake of confession let me say that I in fact have wood in one of my bathrooms, the powder room, which is a low usage room. I purchased the house already like this so I personally wouldn't have made the choice.

My point is that in a low usage room it is still risky due to possible leaks etc... - but on a relative basis it would be the most realistic bathroom installation for wood type products vs. the kids bathroom with a bathtub that is getting constant usage. Logical right? For those active rooms I would suggest ceramic tile, stone or vinyl as your primary option.

I hope this helps.

We have seen a series of data that indicate flooring prices are set to rise during the rest of 2007. There are many factors involved here including:

1. The weak dollar can increase costs of imports (for imports from Canada, South America, Europe, China, Malaysia etc...)
2. Increasing demand in the domestic Chinese market which reduces supply globally (or at a minimum reduces manufacturering capacity in that critical market
3. More restrictive raw materials harvesting requirements which is a good thing
4. Higher transport and shipping fees paid by all tiers of the supply chain
5. Increasing container volumes as the Christmas stock will start shipping in the next couple months which causes container rates to increase 10-20%
6. More customs duties being added to many products including laminate, solid hardwood, bamboo, engineered floors and most everything. (adding 4-12% typically.)
7. The increasing costs related to licensing click patent technology for any click related product.

There will always be some aggressive priced items, but recently I see more and more "CHEAP" products rather than value priced.

I saw a "solid oak" at the Domotex Shanghai show recently that the center of the oak was cut out and a filler cheaper wood was put in the middle. I WOULD NEVER put that in my house!

Anyway - just keeping you involved in the META-economics of flooring.

I am thrilled to see the very capable Seattle team working hard to spread the word about iFLOOR.

This week our HDA's were promoting the local store. What is an HDA? (Human Directional Advertisment.) And what a smashing pair of HDAs! The stars of this show are Maria and Hans from the Downtown Seattle iFLOOR location.

Don't forget when you are installing a new floor most often you will remove and reinstall your existing wallbase after installation. For painted base you should expect ALOT of touch up and some broken pieces. For stained or natural color base you should still expect to touch it up and some broken pieces, but the painted base is often destroyed compared to a brand new wall base that existed the day before installation.

So consider alternatives or know what to prepare for as you consider the wall base implications. (for carpet wallbase often gets marred even if it is not removed)

One common alternative of course is to replace your wallbase as part of your flooring project and another common alternative is to us a 1/4" (quarter round) molding that is installed in front of your existing wallbase to conceal the expansion contraction areas without forcing the removal and reinstallation of the baseboard.

For certain profiles of wallbase you can not add 1/4 Round so this is only applicable to compatible types of baseboard.

This is my TIP O' THE DAY.

We have seen alot of home owners and even professionals searching for the right kind of stapler for their wood flooring.

A few months ago we purchased a bunch of the flooring staple guns to make sure we could offer a very good price on a high quality nailer.

The providers of this tool are world class tool experts and really put together a great product. It comes complete with a case, mallet, etc... Check it out if you need a flooring gun.

Check out this FLOORING GUN

Man - these marketing guys are killing me. The 0% - 15 Month financing that we have running on iFLOOR is VERY good for consumers, but it takes us a lot of extra work to process and it costs a bit more than credit cards as well. But, it does help folks shopping for floors get past the April tax time and use someone else's money to enjoy their flooring now and while they pay later.

Now that I think about it I guess you get to use Wells Fargo's money. It's nice for a Bank to contribute to your happiness! And the 0% rate can't be beat.

As I have mentioned in the past it is critical that 100% of the balance is paid prior to the 15 months otherwise you have to pay interest from DAY 1 at very high rates and it acts more like a credit card at that point. Also DO NOT PLAN TO PAY WITH A CREDIT CARD AT THE END. They will not take credit cards.

I personally use these programs to purchase TVs or Furniture - sometimes appliances too. I like them for myself so we are taking the pain to give YOU the gain.

GO HERE TO LEARN MORE

*Restrictions apply, OAC, Subject to change at anytime.

I have now heard from several independent sources that customs according to the new harmonized tariff will be add an 8% duty to all bamboo (including solid). There are variations to this policy based on the precise construction type, however, the news is that solid bamboo is going up at least 8% immediately. If you are on the fence lock in whatever price you can buy at today.

I predict by the end of the year the China side of the equation will be increasing 6-12% based on reduced export incentives, currency pressure, government taxes on raw materials and VAT issues.

Expect higher prices. The downside is the consumer pays more, but none of it is a value add anywhere. We don't get it, our suppliers don't get it - the government gets it. Not value add.

I have just taken another look at one of the hottest products we have at the moment.

This is offered by Woodstock and it is a 5" wide brazilian cherry that is 3/4" thick SOLID!

It looks awesome, it feels awesome - it is awesome.

The studio did a great job to make a series of photos that include wonderful zoom imagery and our brilliant graphics team also created some superlative room scenes. Like this one:

There are a couple things I really like about this floor:

1. The mill uses only managed forests that are practicing sustainable harvesting which is good for the earth.

2. The finish is MADE IN THE USA and finished in the USA as well - and this finish is one of the finest you'll ever see. It is thick, rich and super tough as well.

3. The average lengths of this VERY thick product are very long and they contribute to a super high end look.

I have seen this same specification for thickness and width routinely offered for $12.00 - $14.00 per foot. We are offering at only $6.99 AND I totally know the finish is superior to 90% of other floors. On top of that folks have the chance to get free shipping to a pick up point or $99.00 home delivery AND you can combine the financing offer. (all of these offers are subject to change at anytime.)

Nobody matches that kind of value. The downside: we only have enough to last 3-4 weeks and then it is gone. We got a special one time buy on this so it is a limited item. Good luck!

here is the first version of a radio spot with some photos pasted into the background just to keep it interesting.

I have tried to remix this iBLOK to remove the background and make the pictures bigger- but so far haven't had success.

So in the mean time here is your first version to listen to.

Version 2.0 - I am still learning how to do this!

We ran contest to WIN a FREE area rug last month which was a big success.

This rug valued at over $2000.00 + US dollars from Karastan rugs is a absolute stunning rug. And since it was a 8'6" wide by 11'6" massive rug it should be a great statement in any room.

The lucky winner was randomly drawn after the entry period ended. Lillie from Michigan has this incredibly valuable rug on the way to her now. Congratulations!!

Just ran across a customer Blog and saw a very well done pictorial.

I think these fellows did a great job!

A Couple of Friends tackle a DIY laminate installation over a weekend

Ok - I have been busy busy, but I am embedding this laminate flooring installation video provided by www.westhollowfloors.com (although they made me pay for installation of this one too!) so I got the the installer into an iFLOOR shirt. :0

Once again being able to see a floating laminate flooring demonstration right online for free I think is great for folks to determine if a DIY or a professional installation if best for them.

Don't forget to go HERE if you would like to add a rating for this video.

One of the best videos for hardwood installation! And the price is right! (free to you.)

Westhollow generously donated the material and underwrote the production costs but iFLOOR paid the installer so we got him in our t-shirt. Yeah.

I believe that customers who consider a DIY installation should first watch this video. If, after watching the video, you still feel good to go - then GO FOR IT! This is one of the best 8 minute investments you can make because if the video gives you the "willies" about installation your own hardwood then it may be time to contact an iFLOOR professional for a installation quote.

If you feel inclined please feel free to go rate the video (don't forget that it was free) by following this link:

GOOGLE VIDEO - RATE THE VIDEO PLEASE

Well to be honest it has been a jammed day today schedule wise, so I haven't had any time to share here today so I am going to simply call this entry in (so to speak). In other words not my finest effort, but it is something. :)

So keeping with my China trip I am embedding the link again to my prior test iBLOK. I will also be heading to some of the mills in the US, Canada and Europe that we buy from over the next 60 days that I will try to share with you.

I will be making another soon as I figure how to to upload it!

Since I was in the neighborhood of Shanghai I decided to pop over to Changzhou (about 2.5 hour drive) which was having a regional show for laminate flooring. As it turns out this was the first ever show for them so I was glad to be there.

In terms of contrast there were many many visitors from around the world at the Domotex Shanghai show, but the Changzhou show I saw maybe 3-4 westerners. This was definitely a more localized show.

I am pasting in some random shots below:

This is the Exhibition center in Changzhou. It was somewhat large and well suited for the event. About 1/50th the size of Domotex in terms of square footage. (that is my guess) There were folks at Domotex trying to get me to take a free bus ride and stay in a free hotel to attend the Changzhou show, but I waited until I met with one of our long term suppliers on Saturday rather than take that chance.

Another shot at the front entry section of the Changzhou Exhibition Hall. The laminate flooring show was well attended and all of the vendors I spoke with seemed happy with the results and customer contacts. This was mostly focused as a domestic show. Some attendees also reported that they were forbidden from showing at Domotex. This was a newer hotel in downtown Changzhou which was very nice and clearly growing like crazy!

And for those working at iFLOOR - I can say while I was near Changzhou I stopped by one of the long term manufacturers we purchase from and took a look at a pending shipment of South American Walnut. They are a terrific brand! One shipment has already left and the next shipment was going out this week. This is one of the hottest selling laminates that we have ever had so I know it will be great for team iFLOOR and our customers to have this product back in stock. (This was taken on the 31st of March 2007)

It was very interesting for me to see Google Advertising here. I asked someone for the rough translation and frankly I can't remember what they told me. Something about peace and harmony I think.

Here I am with a couple of one of our finest partners that we have been doing business with. They are a great group to work with.

Another shot from this same partner. We had a nice lunch while I was there. It really hit the spot after the roughly 2 hour drive from Shanghai. (it was from Kentucky Fried Chicken, by the way.) KFC is really big in China. It was actually very good.

Just landed about 2 hours ago in Seattle, but I wanted to make a quick post. So I am just reprinting a PR Release that was done last week. It is exciting!

iFLOOR.com Opens 23rd Store in Tacoma, Washington

SEATTLE, March 30 /PRNewswire/ -- National flooring retailer iFLOOR.com opened its 23rd store in Tacoma, WA this week. The 2,500 square foot store offers online customers in Tacoma a local store presence to browse and purchase a wide selection of quality hardwood, laminate, bamboo, and cork flooring. In addition, the local store presence allows iFLOOR.com to expand its world class installation program to include the Tacoma area and give Tacoma customers a beginning to end flooring solution.

The news comes on the heels of The Home Depot closing all of its Floor Store locations and Floors Today, another specialty flooring retailer, declaring bankruptcy. The Home Depot closed 7 Floor Store locations, while Floors Today shut down 60 stores.

iFLOOR.com, known for its wide selection, low prices, free shipping and installation service, began testing the "clicks and mortar" concept in late 2004 with its first location in Seattle. After the successful test, the retailer began a nationwide rollout beginning in October 2005. Tacoma,
WA is iFLOOR.com's 3rd store location in the Pacific Northwest with an Everett, WA store location planned to open in the coming weeks.

About iFLOOR.com
Since 1999, iFLOOR.com has been the America's largest online flooring retailer, offering over 60,000 products including hardwood, laminate, bamboo, and cork flooring.

After making history in 1998 by becoming the first online flooring retailer(then called efloorcovering.com), iFLOOR.com did it again in June 2006, becoming the first ever retailer to sell flooring installation online. The iFLOOR.com installation service program now reaches 22 major markets nationwide.

iFLOOR.com is the 119th largest internet retailer according to Internet Retailer Magazine, and was named one of the fastest growing private companies in the United States for the last three years consecutively, according to Inc. Magazine. http://www.ifloor.com/ .
Contact: Bryan Simonson, +1-206-493-2100, ext. 4748.

I am trying to get back to the US (long story about Northwest Airlines leaving me high and dry in Shanghai - hey that ryhmes!) - I am now in Japan waiting on my next flight leg.

I thought I would post a few photos since I have about 20 mins before I must leave.

This was a very nice booth with a Dragon boat motif all the way around it and imperial guards at each entry and exit. Very nice.

This booth was in the hall, that was packed with Manufacturing equipment that was all running. Very impressive to have all that set up for a 3 day show - but very loud. I wouldn't want to walk around in that booth all day long. (I know this is somewhat repetitive.)

This outdoor booth was running fashion shows where models would walk down the runway and playing VERY loud music. Not sure what they were selling, music was too loud (and the speakers were blown) so I never checked it out. Good idea, gone bad.

This booth had a nice Ferrari in it. NIce car, but I didn't really like the color. They were selling hardwood incidentally.