Ready-to-assemble (RTA) cabinets have become increasingly popular in recent years due to their affordable pricing and ease of installation. Becoming a dealer of RTA cabinets can be a profitable business venture for those interested in the kitchen and bath industry. Here is an in-depth guide on how to become a successful RTA cabinet dealer.
Introduction to RTA Cabinets
RTA cabinets, also known as flat pack or knockdown cabinets, come disassembled in a flat box and require assembly. The cabinets are typically made from materials like particle board, MDF, and plywood. Customers can assemble them on their own or pay an additional fee for professional installation.
The main benefits of RTA cabinets include:
- Cost Savings – Since they ship disassembled, RTA cabinets are more affordable than pre-assembled cabinetry. Shipping costs are lower, and there is no need to pay for professional installation.
- Convenience – The cabinets can be easily transported and fit into any kitchen layout. Homeowners don’t need to schedule delivery and installation around their work schedules.
- Customization – RTA cabinets can be customized with different finishes, hardware, drawer configurations, and accessories. This allows homeowners to design the perfect kitchen.
While inexpensive, RTA cabinets offer high quality construction and materials found in more expensive cabinet options. Their DIY convenience and customization make them a popular choice for homeowners undertaking kitchen and bath remodels on a budget.
Benefits of Becoming an RTA Cabinet Dealer
Selling RTA cabinets can be an extremely lucrative business. Here are some of the benefits of becoming an RTA cabinet dealer:
- High profit margins – RTA cabinets offer wholesalers and retailers markup of 50% or more. As you establish your business, profit margins can surpass 70%.
- Lower startup costs – The required startup costs and overhead are much lower compared to stocking pre-assembled cabinets. You can operate a warehouse or showroom at a fraction of the cost.
- Less labor required – With DIY assembly, you save on labor expenses and complications involved with installation and delivery.
- Ideal for eCommerce – The flat pack design is perfect for order fulfillment. You can easily ship cabinets directly to consumers.
- Steady market demand – Kitchen and bath remodels are done year-round. RTA cabinets appeal to DIYers, contractors, and designers.
With the rising popularity of RTA cabinets, becoming a dealer now can help you build a recession-proof business poised for growth.
Finding RTA Cabinet Manufacturers and Suppliers
Choosing the right RTA cabinet supplier is crucial for maintaining profitability and providing quality products. Here are some tips for finding reputable RTA cabinet manufacturers and suppliers:
- Attend industry trade shows – Events like Kitchen & Bath Industry Show (KBIS) allow you to connect with suppliers and view product samples in person.
- Search industry directories – Resources like Kitchen Cabinet Manufacturers Association (KCMA) offer directories to find manufacturers.
- Ask for referrals – Talk to existing dealers to get recommendations on suppliers they work with.
- Verify certifications – Make sure suppliers have proper certifications like KCMA Environmental Stewardship Program.
- Compare pricing and products – Get quotes from multiple suppliers and compare construction, materials, warranties, and pricing.
- Consider ordering ease – Ensure the supplier has online ordering and provides excellent customer service.
- Review company history – Choose established suppliers in business for 10+ years with proven manufacturing expertise.
Finding the right mix of RTA cabinet suppliers will provide you with competitive pricing, quality construction, and responsive order fulfillment.
Steps to Become an RTA Cabinet Dealer
Becoming an authorized RTA cabinet dealer involves careful planning and preparation. Follow these key steps to launch your dealership successfully:
Research and Create a Business Plan
- Research RTA cabinet industry trends, competitive landscape, potential risks and challenges.
- Write a detailed business plan covering your company mission, startup costs, financing, competitive advantages, and 5-year growth plan.
Select Products and Suppliers
- Based on your market research, select the styles and product lines you wish to carry.
- Contact and vet potential RTA cabinet suppliers and manufacturers. Get authorized as an official dealer.
Determine Pricing and Profit Margins
- Using supplier price lists, decide your wholesale and retail markup to build sufficient profit margin.
- Factor in taxes, shipping costs, and any additional expenses that will impact pricing.
Set Up Storage and Operations
- If operating locally, secure a warehouse or storage facility of appropriate size and layout to stock inventory.
- For online sales, determine 3PL logistics partner for storage and order fulfillment.
- Create systems for inventory management, shipping/receiving, quality control, accounting, CRM, and customer service.
Build an eCommerce Store
- For online sales, build an ecommerce storefront with catalog, shopping cart, and payment processing.
- Ensure your site is optimized for keywords like “RTA cabinets” and “ready to assemble cabinets”.
Market Your RTA Cabinet Dealership
- Launch marketing campaigns that target homeowners, contractors, kitchen designers, and other buyers.
- Leverage social media, PPC ads, email, industry directories, trade shows etc. Promote your competitive advantages.
- For brick and mortar showrooms, choose a retail location with ample foot traffic. Install display kitchen vignettes.
With the right strategic planning, you can successfully launch and grow an RTA cabinet dealership catering to DIY homeowners, contractors, designers, and more.
Key Skills and Knowledge Needed
To become a successful RTA cabinet dealer, you should possess certain skills and knowledge:
Sales and Marketing Expertise
- Exceptional salesmanship to build relationships with customers and close sales
- Marketing savvy to promote your business through various online/offline channels
- Strong understanding of your target B2B and B2C demographics
Industry Knowledge
- In-depth understanding of cabinet construction, materials, finishes, hardware etc.
- Familiarity with kitchen and bath design trends and techniques
- Ability to guide customers and educate them on RTA cabinet benefits
Business Acumen
- Financial planning skills to accurately calculate profit margins, inventory costs, overhead etc.
- Organizational skills to manage purchasing, inventory, deliveries, and daily operations
- Negotiation skills to source competitive wholesale pricing from manufacturers
Customer Service Skills
- Patience and empathy to address customer questions and concerns
- Responsiveness across phone, email, social media, and other communication channels
- Ability to manage problems and unreasonable demands calmly and tactfully
Investing time to build expertise across these areas will help you deliver an exceptional experience to cabinet buyers and builders.
Steps for Buying RTA Cabinets at Wholesale
As an authorized dealer, you can purchase RTA cabinets directly from suppliers at wholesale rates for resale. Here is the typical process:
Get Account Approval
- Contact RTA cabinet manufacturers/suppliers to apply for a wholesale dealer account.
- Fill out required forms with your business information, credit history, and resale certificate.
- If approved, you will receive account login credentials and pricing lists.
Review Available Inventory
- Using your dealer account, browse current in-stock items across different product lines and door styles.
- Check inventory levels, pricing, and predicted lead times.
Obtain Project Measurements
- For contractor/designer clients, get complete room measurements and cabinet elevation drawings.
- For homeowners, provide measuring guides and have them submit required dimensions.
Generate a Quote
- Add precise cabinet quantities to your quote based on project measurements.
- Select finishes, mouldings, accessories etc to customize the order.
- Use price lists within your dealer account to build an accurate quote.
Place the Wholesale Order
- Enter the complete order through your supplier account including all selected products, quantities, sizes etc.
- Arrange commercial shipping to have items delivered to your warehouse.
- Receive email confirmation with wholesale pricing and estimated delivery timeframe.
Having a streamlined process will make it easy to purchase quality RTA cabinets from manufacturers at ideal wholesale prices.
Tips for Pricing Your RTA Cabinets
Determining the right pricing strategy is crucial for maximizing profits on RTA cabinet sales. Consider these tips when pricing cabinets in your dealership:
- Check competitors’ pricing in your region for specific styles and sizes. Avoid going too far below or above.
- Factor in wholesale cabinet cost, shipping fees, labor, hardware, and your desired profit margin.
- Offer tiered pricing – contractor/trade discounts of 10-20% and higher retail rates.
- For online sales, keep prices 10-15% lower than brick and mortar stores since you save on overhead.
- Adjust prices higher for more specialty items like curved cabinets or premium materials.
- Offer an additional charge for modifications like side panels, glass cabinet inserts, or custom paint colors.
- Provide room for negotiation and be willing to offer discount for bulk orders or excellent credit.
- Develop a clear price book or matrix showing costs for all base cabinets, wall cabinets, and accessories.
- Update pricing 1-2 times per year as material and shipping costs fluctuate.
Having a balanced pricing approach will ensure healthy margins while remaining competitive within your RTA cabinet niche.
How to Market Your RTA Cabinet Dealership
Marketing and promotion will play a big role in raising awareness of your RTA cabinet offering. Be sure to focus on both digital and traditional tactics:
Digital Marketing
- SEO – Optimize your website for keywords like “RTA cabinets [City]” and “ready to assemble kitchen cabinets”.
- PPC Ads – Run pay-per-click ads on Google, Facebook and Instagram targeting homeowners and contractors.
- Social media – Post inspiring kitchen images daily highlighting your cabinet selection.
- Email – Send promotional emails to announce new products and sales. Offer email signup on your site.
- Retargeting Ads – Display ads to website visitors after they leave to pull them back.
Traditional Marketing
- Showroom – Have elegant kitchen displays featuring your RTA cabinetry installed.
- Print Ads – Take out ads in home improvement magazines and local newspapers.
- Direct Mail – Send postcards and brochures to homeowners in a specific radius.
- Sponsorships – Sponsor relevant trade groups and home shows to gain exposure.
- Signage – Place yard signs and billboards along high-traffic routes.
A multifaceted approach combining digital and traditional methods will provide the maximum brand visibility and direct sales needed to grow your dealership.
Handling Customer Concerns with RTA Cabinets
When selling RTA cabinets, some common concerns may come up from prospective buyers. Here are tips for handling them:
Durability
- Note that RTA uses the same quality materials and construction techniques as pre-assembled. The modular assembly does not compromise lifespan.
- Mention your supplier warranties that guarantee performance for years. Offer extended protection plans for added peace of mind.
Assembly
- Explain that the cabinets assemble simply with cam locks, pins, and screws. Detailed instructions are provided.
- Offer an optional assembly service with certified installers if the DIY aspect seems daunting.
Appearance
- Have display models on hand to showcase finished look. RTA cabinets are indistinguishable from pre-assembled once installed.
- Share photos of completed projects using your RTA cabinets so customers can see the results.
Knowing how to address these concerns will lead to higher satisfaction and conversion rates when selling RTA cabinetry.
Mistakes to Avoid As a New RTA Cabinet Dealer
When starting out as an RTA cabinet dealer, it is easy to make certain mistakes that end up being costly. Be sure to avoid:
- Stocking too much inventory too quickly. Start smaller and ramp up as sales grow. Excess inventory ties up capital.
- Neglecting to vet suppliers thoroughly. Rushing to work with unknown manufacturers can lead to low quality and reliability issues.
- Setting prices too high or low. Research competitors and find the optimal price point that supports profitability.
- Insufficient marketing investment. Devote 15-20% of revenue to advertising and promotions to gain market share.
- Poor organization and operations. Sloppy inventory or order management will frustrate customers.
- Trying to carry too many product lines early on. Start with one or two trusted suppliers with the best ROI.
- Choosing the wrong location. Ensure showroom or warehouse has convenient access and ample visibility.
- Offering inadequate customer service. Communicate promptly and resolve issues satisfactorily.
Being diligent in these areas will help new RTA cabinet dealers achieve success and avoid early pitfalls.
Choosing the Right Location
For dealers with a brick and mortar presence, selecting the optimal building location is key. Consider these factors when choosing where to set up your RTA cabinet showroom or warehouse:
- Visibility – High-traffic streets offer exposure to more potential customers driving by. Corner locations are ideal.
- Accessibility – Convenient access to highways and thoroughfares makes deliveries simpler.
- Parking – Having ample parking, especially for contractors with large trucks, is essential.
- Competition – If other cabinet showrooms are clustered nearby, consider a separate area to stand out.
- Foot traffic – Areas with heavy foot traffic provide walk-in customers if you have a street-facing showroom.
- Proximity to clients – Being centrally located close to residential districts you serve is advantageous.
- Growth potential – Choose a space that can accommodate business expansion without frequent relocation.
- Lease rates – Balance location desirability with affordable leasing rates to control overhead.
Don’t just settle for any available listing. Be selective in choosing a location positioned for success.
Legal and Regulatory Requirements
RTA cabinet dealers must make sure they are compliant with all relevant laws and regulations. Here are some key requirements to be aware of:
- Business license – Register your business and obtain necessary state and local licenses.
- Sales tax permit – Get a permit to collect and remit sales tax in jurisdictions where you make sales.
- Seller’s permit – Obtain a permit for purchasing wholesale without paying sales tax. Submit resale certificate to suppliers.
- Fictitious name – File a DBA if operating under a name different than your legal business name.
- Building codes – Ensure any showroom/warehouse renovations adhere to state and local building codes.
- Insurance – Carry adequate business liability and workers compensation coverage.
- Prime vendor agreement – Sign any required agreements with cabinet manufacturers to become an authorized reseller.
- Contracts – Use well-drafted contracts and terms & conditions to document customer agreements and transactions.
Consulting with business attorneys and accountants will help you remain compliant as laws evolve.
Choosing the Right Business Entity
When starting an RTA cabinet dealership, you must choose the appropriate type of business entity. Common options include:
Sole Proprietorship
- Simplest structure with no formal creation process
- No separate legal entity – owner has unlimited personal liability
- Income passes through to owner’s personal tax return
- Easy to form but riskier for larger businesses
Partnership
- Formed when two or more people jointly own and operate a business
- Partners share profits and have unlimited liability
- A partnership agreement should outline partner roles, duties, and profit distribution
Limited Liability Company (LLC)
- Hybrid entity that combines benefits of partnerships and corporations
- Profits pass through to owners similar to a partnership
- Owners have protection from personal liability like a corporation
- More credibility with suppliers compared to sole proprietorships
- Higher setup costs than sole proprietorships
S Corporation
- Business is registered as a separate legal corporation with IRS
- Income taxed at shareholder level avoiding double taxation
- Owners have limited liability protection
- Strict rules regarding ownership structure and shareholder payments
Consult with accounting and legal experts to determine which business structure offers the best benefits and tax treatment for your dealership.
Acquiring Business Financing
Sufficient capital is required to start an RTA cabinet dealership. Here are financing options to explore:
SBA Loans
The Small Business Administration guarantees loans made by lenders for eligible businesses. Loan amount and rates are based on factors like personal credit score, collateral, and down payment percentage.
Business Credit Cards
Business credit cards allow you to earn rewards on purchases while separating business and personal expenses. Make sure to pay balances in full each month.
Equipment Financing
Financing options are available for the specific equipment needed like delivery vehicles, warehouse racking, forklifts etc. This preserves capital for other startup costs.
Business Lines of Credit
Lines of credit provide access to a pre-approved loan amount that can be drawn as needed. Interest is paid only on the amount used. Lines of credit provide flexibility to handle fluctuations in cash flow.
Family Loans
Borrowing from family members is an option but should be documented with a promissory note and repayment terms. Don’t risk damaging personal relationships.
Business Loans
Traditional term loans with fixed monthly payments offer another financing option. Sufficient income and credit are required to qualify.
With a combination of financing sources, you can secure startup funding on acceptable terms.
Choosing the Right Point of Sale (POS) System
A POS system is essential for processing sales, tracking inventory, and managing daily operations. When evaluating systems look for:
- Integration – Seamlessly integrates with accounting software, inventory management, ecommerce store etc.
- Payment processing – Accepts various payment types like credit cards, ACH payments, Apple Pay. Offers multi-store management.
- Dashboard – Provides real-time sales, inventory, and financial reports through an intuitive dashboard. Accessible from any device.
