Service calls for financial support

The growth of the Multimate DIY service chain, according to managing director Paul van der Meché, is explained by the fact that entrepreneurs looking for a different franchising organisation regard Multimate as the channel for DIY service stores. “They want to join in time. And since we started, not one entrepreneur has left us. The predatory Dutch market will exact its victims among the weak trading formats and entrepreneurs.”
Although service is important, customers are at the same time given a low price guarantee. Even if that is normally a contradiction, these are not opposites at Multimate. “Our wage costs are about four per cent higher than for the average DIY store, but the combination with low prices is a great success: our market share is growing. We have low administrative costs, the profits benefit the entrepreneurs, and we don’t need to pay anything to any parent companies. What is more, our members can do their buying where they find the cheapest source. And, finally, we don't do any expensive advertising, which means we save around three per cent. Money that we invest in staff training,” said van der Meché.
In the price war, Praxis and Gamma have decided in favour of supplier dues. Recently Multimate requested a sales contribution from its suppliers. The precise difference was explained by van der Meché: "A supplier is often an importer or a distributor and thinks in terms of costs above all, not in terms of a long-term, strategic policy. But manufacturers of A or B brands have to do so: if it is necessary to explain the difference in-store, that costs money. Our high personnel costs have to be covered. If the distributor can’t help, the manufacturer must step in and pay a consideration to the stores. If this isn't done, there won’t be any more service stores in the future, and they will only be able to supply their products to the DIY warehouses, where customers are not offered any advisory service. The majority of manufacturers are in agreement with our philosophy.”
Despite the recent growth, van der Meché sees enough room in future for a big, strong service format of around 150 stores. “That will make it possible to do more advertising, encourage own labels and do even better buying. We are ready at all times to work together with like-minded people.”
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