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The Rising Tide of Cash Rebates: Making Smarter Cost-of-Sale Purchases

“A rising tide lifts all boats.” —John F. Kennedy

Which is the better strategy: Increasing your sales by 1% or decreasing your cost of goods sold by 1%? The latter is actually better. Why do you suppose that is?

Because a 1% increase in sales comes with sales commissions, payroll taxes, and human error costs that need to be paid, leaving a lot less than a 1% contribution to the bottom line. Indeed, the more sales expand, typically the greater gross profit margins decrease for the average
dealer as their personnel toil to handle the heavier workload.

On the other hand, a member’s costs of goods sold represent the single greatest expense on their Profit & Loss Statements. So, just a 1% reduction in this category will directly increase their net profit by that same 1%. That’s straight cash in the member’s pocket.

Although our national buying power and rebate deals are attractive reasons to join SEN, a surprisingly low number of our members today are taking full advantage of the many-tiered rebate programs available to them.

Are you already earning thousands of dollars per year in rebates by purchasing cabinets from SEN vendor partners?

If not, see how your business can earn more through SEN vendor rebate tiers.

What’s good for the group is good for you

You can earn more in SEN’s rebate tiers by buying the products for your jobs from our vendor partners. That’s in addition to many partners offering deeper discounts up front on their product lines.

The first year’s rebates increase over time without you having to increase your sales. To illustrate the SEN group purchase dynamic that benefits every member, let’s assume that sales for a $1M operation remain static over a 3-year period.

On $100,000 of purchases in the first year, the $2,000 rebate alone represents a robust 67% return on a current Signature membership investment of roughly $3,000 ($199/month current dues plus estimated conference expense). You cannot earn that kind of an annual return these days from a savings account, mutual fund, or piece of real estate.

That’s only the beginning of the monetary rewards that can be earned from the leveraging power of just one member.

As shown in the example below, notice the decreasing cost of sales [orange] in Year 1 correlating with an increase of net profit [yellow] in the following charts:

 

 

Cabinetry purchases typically represent about 70% of most members’ purchases. Your firm can earn substantial rebates from our vendor partners simply by buying your cabinets through them. No extra effort is needed on your firm’s part, and your sales need not increase in order for your firm to rise from one tier to the next.

SEN members benefit from the snowballing effect of the purchasing power of one

It’s from the collective purchases of SEN members buying product from our vendors that count toward moving up the rebate tiers, not the amount individual firms are spending with our vendors. Not that you, or we, wouldn’t want that positive achievement.

Have a look at a typical cabinet rebate model:


As SEN members purchase more product from our vendors, all participating members earn a higher percentage back in rebates. One firm’s contribution of X amount of dollars in cabinet purchases is just as beneficial as another firm’s Y amount of purchases. That’s the power of one!

This focused, collective buying effort bumps all firms from one tier to the next, earning them a higher percentage of rebates which directly builds everyone’s individual bottom line.

Not only that but in many cases rebates are retroactive to dollar one! So, when your firm helps the group bump up over the $1 million tiered benchmark (See model above), you will earn an additional 0.5% for those purchases you made with that vendor partner as part of the group’s first $1 million dollars.

All boats rise in high tide

Adding value is a two-way street. What SEN retains for administrative fees enables the Leadership Team to invest in additional educational programs and systems that benefit everyone. For example, there are plans in place to soon add a Project Management School and a Bath Remodeling course. So if you do your part by supporting our vendor partners with focused effort and increased sales, SEN can do more good for the group.

Always remember, what’s good for the group is indeed good for individual members. Because the resulting synergy allows all boats to rise. The power of one becomes the power of many!

 

—The SEN Design Group