Why isn't the flooring market dominated by distributors, but rather by mom-and-pop wholesalers and big-box retailers?

I think there are a couple of factors involved. Distributors used to dominate the market; they were the ones in charge. From what I've heard, although I haven't worked for a distributor, one challenge they faced was their conservative approach when selecting, developing, and bringing products to market. They would often rely on past sales data, like a 12 by 12 beige travertine look that sold well, and continue with that, maybe introducing a 16 by 16 version. Their product development cycle was very slow and conservative. When a company like Floor & Decor entered the scene, our goal was to lead trends. Walking into a category killer like Floor & Decor, you find a wide range of brand-new, leading-edge products with visible inventory. As a professional, this is exciting because you can offer your customers the latest designs and installations they see on HGTV and other shows. In contrast, distributors often have the same person who's been there for 35 years, sticking to conservative designs and graphics, which is less appealing. Retail typically involves fewer pricing games and fewer hoops to jump through to hit purchase quantities, unlike distributors where you might need to earn a rebate or a trip to Hawaii for their best customers. Many professionals and contractors realized they just needed the best price to maximize profit on a job, without worrying about all these extra steps. As more professionals adopt this approach, prices can be lowered. If you're with a distributor and paying more for products while your competition is sourcing from Floor & Decor, The Home Depot, or Lowe's, where they can get inventory quickly and at a lower price, the appeal of the distributor model diminishes.

No.

Limited inventory presents challenges as well. When you enter a Home Depot, you typically don't find sales associates on the floor who are well-versed in the tile area. In my experience, having done hundreds of market shops, less than 10% of the time will you find an associate knowledgeable about tile.

But what would prevent The Home Depot from holding that much inventory in their specific store or their distribution center, if they know it's going to sell?

Some [Home Depot] stores have devoted more floor space to flooring and bulk outs to address this. However, they often shift focus to other areas like windows or paint. The flooring expansion loses out to something else with more promise. If they tried to add more products within the bays, their total assortment is challenged. From 70 to 90 SKUs, if you start double or triple facing the top sellers, you go down to 55 to 60 SKUs, making the overall portfolio less compelling. It's a trade-off of where they want to allocate their space.