Managing gross margin is key to operating a profitable retail or pro dealer business. Gross margins vary by the type of dealer or retailer. Specialty retailers, such as those window and cabinetry retailers, have the highest margins at 32%— the result of focus on custom products, which add intrinsic and aesthetic value to the final customer and higher margin dollars back to the retailer. Principia’s findings show the average lumberyard has margins of 23% and specialty one-step dealers carry gross margins of 22%, both are lower than the big box gross margin of 28%.
