5 May 2016
And now for something completely different: how to buy carpets...
Regular readers of this blog will be used to hearing my thoughts on the insurance and banking sectors. But for better or worse, I'm branching out this week. Into carpets.
I felt compelled to write something because there seems an absence of any useful help and advice for consumers in this area. And what I've learned over the past two weeks is that it's easy to spend thousands of pounds too much if you fall for the sales patter on the shop floor. And - in all seriousness - I think this is a market that is ripe for an investigation by the Competition & Markets Authority.
I'm always struck by the contradiction that most people work hard to save a few pounds here and there on their everyday spending - but accidentally waste thousands by getting the wrong mortgage or an expensive estate agent. Carpets are another area where the amount people end up paying is often completely removed from the cost - a clear indication that a market is not working particularly well.
So here comes the personal anecdote that has informed my blog. Over the last fortnight, I've had the misfortune of needing to buy some carpets - an endeavour that I wrongly assumed would be fairly straightforward. Surely, it would just be a matter of measuring my rooms, working out how many square metres I needed, and then getting it installed. Sadly not.
In fact, it's made to be much more complex than that - and what's so surprising is that the shop window prices bear next to no relation to what you end up paying.
After running around my house with a tape measure, I reckoned I needed about 30 square metres of carpet. Most of the carpets in the local shop came in around the £10 a square metre mark, plus almost as much again for underlay. Add in a bit extra for fitting, carpet grippers and door plates, and I reckoned my whole job should come in around £800.
After the Carpet shop came to measure up, I was quoted more than double my estimate, at almost £2,000.
Good old fashioned mis-selling
As I started to interrogate where the extra costs were coming from, it was not easy to get a straight answer. When I asked how many square metres of carpet they thought I needed, I was told that they couldn't give me that information until I'd paid my deposit - presumably because they were worried that I would use it to shop around and get a better deal.
Thankfully, they were willing to let me know how much of my quote was accounted for by the carpet -rather than all the other extras - and lucky for me, I'm quite good at my ten times table, so didn't find it too hard to work back to the square metreage.
What became apparent was that the shop was trying to sell me almost twice as much carpet as I needed - with all of the measurements inflated slightly to boost their margin.
Carpets are typically sold in rolls that are either 4 or 5 metres in length. So if I measure my room at being 3.95m wide, that means a 4m roll will do just fine. But if the carpet salesman measures it at 4.05m, that means they'll need to sell me a 5m roll of carpet.
The next trick is to try and sell you as much underlay as carpet. But the thing about underlay is that it's sold in much narrower rolls, and because it sits under the carpet, you can fit it together in more economical ways. That means you can much more accurately match your square metreage to the amount of underlay you need. But of course, the canny carpet salesman will tell you that you need as much underlay as carpet.
What the high street shops rely on is the fact that by the time you've had someone measure up and quote, you won't want to go through the whole process again to get a better price. And if you do bother to get another high street merchant to come and quote, they'll almost certainly use all the same tricks to ensure that your quote is in the same ball park as their competitor.
Thankfully, however, as in so many other markets - the internet is providing some genuine competition. Onlinecarpets.co.uk is one of a number of internet carpet sellers that will deliver next day at a fraction of the cost of the high street retailers. I bought similar quality carpets, underlay and all the trimmings for around £600 - and now all I have left to pay is an extra couple of hundred for an independent fitter to come round and get it all installed.
There are more than a few parallels with the financial services market here. Companies give the perception of simple pricing - by displaying the cost per square metre very clearly around their stores, alongside guarantees that they can't be beaten on price.
But by the time the customer gets a quote, there are so many other elements built in, that it's very difficult to make a clear comparison without getting a full fitting from other providers. That can be a lot of time and hassle, so people often go with the first company who's quoted - unaware that they're spending hundreds or thousands more than they need to.
What's needed is some kind of price comparison site that allows consumers to compare on total cost. If you're an internet entrepreneur looking for a business idea, you can have that one on me.