Margin Maker Fulton Homes’ extensive
design center boosts profits by selling extras.
Credit: Courtesy Fulton Homes
It’s easy to say that a not-so-secret secret to selling houses is to give customers what they want. The real secret is how to figure out what they want when they don’t know themselves until they see it.
Fulton Homes’ solution to the conundrum is to offer shoppers 6,000 different choices via an online and bricks-and-mortar design center. The Tempe, Ariz.–based builder credits its design center with helping it climb to the top of the local home market while reorganizing in bankruptcy court.
The builder sold 70 homes over five weeks during the summer. And options ordered after visiting the design center have made the difference between selling those houses at a profit and just breaking even.
“Right now margins are so thin out in the field ... that the profits we make are from the design center,” says Dennis Webb, Fulton Homes’ vice president of operations. Since the company opened its design center in 2005, the number of extras buyers add to their homes has tripled, he says.
The center doesn’t cost the company much, if anything. Interior Specialists Inc. (ISI) of San Diego, which provides Fulton with all its flooring, countertops, and cabinets, pays the design center’s rent and staff.
“The builder doesn’t have the capital outlay [for a design center], and [ISI] is going to make its money on flooring, cabinets, and countertops,” says Webb. Plus, Fulton pays ISI a commission on whatever other options it sells through the center.