You won’t find Waterworths Woodshop Inc. by accident. It has to be your destination, after following gravel roads in rural Marshall County, Minnesota
But if you are looking for custom cabinets, Marcus Waterworth is hoping that it will be worth the trip. He wants Waterworths Woodshop to be a destination for customers looking for affordable custom cabinets.
Being out in the country keeps costs down. Property taxes and overhead are much lower here. They started in an old barn, and have expanded in stages, now using five buildings.
“Being out in the country like this has definitely helped us with that,” Marcus Waterworth said. “We decided to put the showroom out here rather than in town to provide a unique perspective. We have tried to market this as a destination to come to.”
Marcus’s father, Tim, founded the company in 1991, and remains active in the business. Marcus is president of the company, which employs 23 and did $2 million in business last year.
“I started helping him out at the age of seven and worked there throughout my school career,” Marcus said. “When I was in college I decided I wanted to do this full time and he agreed to let me buy into the company as long as I finished up a degree of some sort. Once I started working full time we saw that we would be able to find the demand for our work and started advertising and bringing on employees.”
Tim was working full time at another cabinet shop, and Waterworths took on enough work for him to transition to working full time at their own operation.
Waterworth said that at this point they started shopping around for showroom locations in town, but soon decided to build a showroom back in the woods along the historic Pembina Trail. They marketed their location as a cool destination rather than just a long drive, so they would not only stand out from other shops, but would be able to keep their prices much lower due to lack of overhead.
The Pembina Trail was originally an ox cart path that ran from Minneapolis through northwestern Minnesota and Pembina, North Dakota. Today, Waterworths is located more than 15 miles from the nearest town, Viking, with a population of 123.
In the Minnesota shop, they have an SCMI panel saw, Brandt edgebander, Rojek sliding table saw, and Lynx CNC router for MDF doors.
Pricing in the country
“A lot of our customer base is people who always wanted custom cabinets, but felt they couldn’t afford them,” Marcus said.
“By the time they’ve invested the time to drive out here, they have become a part of the process,” Tim Waterworth said. “People who make the trip can get a quality cabinet, and a short drive on gravel could save them $1000 or more on a kitchen.”
Keeping prices lower while delivering a quality kitchen is the goal. Prices may be going up, but Marcus wants their prices to be close to the higher-end cabinets from big box stores -- not a goal for most custom shops.
“The only way to grow is to keep your prices a little bit lower,” he said. “We try to save people as much as we can. We’re very price-conscious, and that helps us.
“Our guys, they take a lot of pride in the fact that they have our work in the customer’s home. We want to have a good reputation for quality cabinets that people can afford.”
Waterworths uses walnut, cherry, knotty alder and knotty oak in cabinets. Paint is still in strong demand, especially grays and teals. They are getting more requests for ash, along with more diversity in species and colors. “What we’re seeing is there is not one type of wood overtaking everything else,” Marcus said. “People buying custom are taking advantage of using many different colors.”
Cabinets have ¾ sides with fully enclosed tops. They don’t cut costs on materials. They make everything here, including doors. The company also makes built-in furniture, stairways and commercial cabinets, wood urns, caskets, and has even made a bong holder. The company is looking at making doors for other shops also.
“We’ve had extremely happy customers, and that has been our biggest asset to growing. When one customer is pleased they tell others, so our advertising expense has been low,” Marcus said.
Employees can set their own schedule and make as much money and have as much of a career as they aspire to. Benefits are scaled to coincide with hours worked. By doing this Marcus Waterworth said they have found a great core of employees who feel privileged to be able to make their living as professional craftsmen and women.
The company sells through lumber yards, contractors and direct to homeowners. About 70 percent of business is residential, 30 percent commercial.
“We have built up a base of more than 20 contractors who use our cabinetry and services for all of their work,” Marcus said. “We offer them reduced rates and make them a time priority for all of our projects. We also have lumber yards who sell our products and services along with multiple interior design studios. We offer a discount to places willing to retail our cabinets, but we also sell direct.”
Waterworths market area includes northern Minnesota, Minnesota’s lake country and into North Dakota, with some customers coming from as far as Minneapolis.
Advertising is limited, and they rely on word of mouth for new customers. “If we can get into an area, typically we’ll see a large volume of work from that area,” Marcus said. So they have a lot of work from some towns and lakes, but not in others.
Waterworths has a core group of people, but Marcus Waterworth said they are often spread thin. The challenge is turning the newer people into quality craftsmen and long-term employees.
The company has a 90-day probationary period. Once people get by that the company has a very high retention rate. “We get much more out of people who want to do well, and we get less from people just looking for a job,” Marcus said.
The shop rate is $40. Employees can work anytime in the 6 a.m. to 10 p.m. period after their 90-day trial.
“We also only mandate that our full-time employees work 30 hours a week but offer unlimited overtime to all employees. This way they can set their own schedule and make as much money and have as much of a career as they aspire to. We scale all benefits to coincide with hours that they work as well to accommodate this. By doing this we have found a great core of employees who feel privileged to be able to make their living as professional craftsmen and women.”
Finishing is done in the shop with Sherwin-Williams for clearcoat and M.L. Campbell for pigmented lacquer.
Marcus Waterworth said they have been automating since the company started, but keep their overhead in check by mostly buying used equipment and paying contractors to maintain and update equipment as needed. The company buys used equipment from Machinery Max, often at a much lower cost, but they do need support for that equipment.
In the Minnesota shop, they have an SCMI panel saw, Brandt edgebander, Rojek sliding table saw, and Lynx CNC router for MDF doors. Also here is a Ritter door clamp and Unique door machine, Grizzly sander, and Grizzly dado machine. They are using mostly Mozaik software for all design. Cabinet Planner is used for one type of cabinet.
Marcus said they are working with Renneberg Hardwoods, Inc. in Menahga, Minnesota, and have had a long relationship with them. Renneberg often works with smaller shops.
Assembly is done in a separate building, one of the five on site. They are also working with Holdahl for finishes and HDL for hardware and other supplies. Finishes are from Sherwin-Williams for clearcoat and M.L. Campbell for pigmented lacquer. They’ve tried water-based finishes in the past, but haven’t made that move.
The solid surface segment of the countertop market has done well for them, offering better quality than laminate, not as expensive as stone. They are buying solid surface from Domain Industries, which makes Affinity Surfaces, and QuarryStone Solid Surface. Again, they like to do everything in house where they control the process.
Waterworth wants a customer base that seeks a quality product, but one that is also accessible and affordable.
“The custom cabinet shops are not competing against each other, what you are competing against is the majority of people who are deciding between going custom and going to a big box store,” Marcus said. “That’s where the competition is, in my opinion. We’re all competing against Medallion.”
In short, they are going after people who want custom but may think they can’t afford it.
“I want to make custom cabinets accessible to your average home buyer, your average home builder. I want to make custom an option.”
Marcus would put the quality of his own cabinets against other companies who are charging a third or half again as much as what they are charging.
“We can’t compete with the entry-level imports, but larger manufacturers are offering a quality cabinet that is not custom,” he said. “If we can compete with the higher quality level at big box stores, then our potential is endless.
“We feel that we have grown by figuring out who we are as a company and doubling down on it. As at most great shops, we truly care about our customers, employees, and our product.
“We have to pay attention to the bottom line, but are more interested in putting out a top product and offering great service at a price were everyone who aspires to have our work can afford it. Due to minimal overhead we can offer this.”
They are interested in putting out a top product and offering great service at a price were everyone who aspires to have their work can afford it.
At a glance
Waterworths Woodshop Inc.
Commercial and residential cabinets
Plant size: Five buildings
Tim Waterworth, left, founded the company in 1991, and remains active in the business. Marcus, right, is president of the company.
Waterworth named to 40-under-40 in 2017
In 2017, Marcus Waterworth was named one of the wood industry 40-under-40, which celebrates the next generation of industry professionals who are making an impact on wood products manufacturing in North America.
Over the last few years Waterworths Woodshop has grown from a part-time operation to over 20 full time employees and is still expanding. Waterworth said that they truly feel that they are a custom wood shop and their business is to design and create what people are after. Some of the ways that they have had this success have required some ingenuity, but are things that every other small shop out there can do.
As for being named to the 40-under-40, Waterworth said, “I got to meet a lot of people. It really motivated me to see what some of these people had created. I met a man who was making cabinets for yachts. It was great to meet people that are doing something similar to me, something they love.
“A lot of people similar to me have had completely different experiences. (I got) a feel for what they are about and learned from them and learn as much as you can. I feel fortunate to be able to do this for a living. To be recognized for that was very cool.”
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