Wednesday, April 16, 2008

$99.00 Whole house carpet installation?

One of our competitors is offering a great deal! $99.00 for carpet installation. Almost sounds too good to be true. I started to think about how they ( let's just call them the non-orange big-box) could do that. Consider that the average carpet job is about 100 square yards. The average carpet installer (licensed) is getting around $3.50 a yard. That means that they are taking a $251.00 loss on the average job. Also let's just say that each of the 1500 stores sell one job a day at 100 yards. That means they are taking a daily loss of $376,500.00 or an annual loss of $137,422,500.00. I'm thinking there must be something else happening here. I don't think the stockholders would be too happy about those numbers. Something to think about.