The phone still rings of f the hook on the desks of Do it Best’s lumber traders, and their inboxes continue to fill up with e-mails that arrive every few seconds. The building slowdown hasn’t slowed down the pace in Do it Best’s LBM division, where 70 staffers serve approximately 2,000 dealers who sell lumber and building materials.
But while the volume of calls and e-mails hasn’t changed, the tenor of communications is different now. Quent Ondricek, Do it Best’s vp-lumber and building materials, finds himself engaged in a lot more strategic planning with members than ever before.
“Most of our discussions with our members have been about increasing their markets,” Ondricek said. “With the diversity of our membership, we can look at different segments of the business and extract things that are going to help the others.”
Ondricek and his staff are also taking the opportunity to reinforce some basic tenets that dealers tend to overlook during bull markets. Things like the importance of sales training and getting out of the office to talk to customers. Along with all the advice, Ondricek admits to doing a little spin doctoring. “Our members are bombarded every day with bad news,” he said. “But when we ask if last year was still one of their top five years, the answer is often ‘yes.’”
While there’s no one course of action that fits every dealer, certain ideas keep resurfacing during discussions with Do it Best lumberyard owners. Ondricek also stresses these themes in his monthly newsletter.
Look deeper into commercial
Many Do it Best dealers were already active in the commercial building sector, and co-op executives are encouraging LBM members to look at heavy as well as light commercial construction.
“There’s not quite the [same] fear to get into the larger projects,” said Joe Corah, Do it Best’s division manager for roofing, insulation and gypsum. Co-op members have supplied ethanol plants, strip malls and assisted living facilities, according to Corah. His job is to make sure they can come through with the right building products, which differ from those going into residential projects.
“Steel [studs] is one of our biggest growth categories,” Corah said. The co-op has also added more metal roofing, pole barns and specialty products designed for commercial buildings.
“We try to match the dealer up with the right manufacturer, so they know what they’re getting into,” Corah explained.
That matchmaking has gotten easier with the slowdown in residential building, according to Ondricek. “A lot of people in our industry have been kept out of that business,” he said. “But now [vendors] are opening the doors and letting them into the commercial division.”
Adds Corah: “We’re letting the vendors know that our members can move these products too.”
CHIC Do it Best Lumber has watched its commercial sales rise three percent this year, which helps offset the decrease in custom home business. The three-unit pro dealer has kept busy supplying new restaurant franchises and loft conversions in the St. Louis market.
“Do it Best has been lining us up with suppliers and vendors we can buy direct from and then bill through the co-op,” said Adam Hendrix, who operates the company with his father David.
The Hendrixes do a lot of interior work for new commercial construction, which requires fire retardant wood as well as millwork with larger profiles—both of which they’ve sourced through the Fort Wayne, Ind., buying group. “We’re seeing more and more [commercial] vendors associated with Do it Best,” Hendrix said.
Dust off your cash register
Catering to contractors—and not to DIYers—worked well during the building boom, when some LBM operators sold their inventory out of a trailer and a fenced-in dirt lot. While Do it Best dealers tend toward a more traditional setup, many of their lumberyards were overtaken by fast turning commodities. Lumber and sheet goods crowded out other products with higher margins. Consumers without house accounts felt out of place.
“Some lumber operators started looking like offices, not showrooms,” said Ondricek. In addition to losing DIY business, the dealers missed out on “the possibility of up-sell,” he noted.
Some of these dealers are moving away from the “pure pro look” with rental departments and showrooms. Do it Best now offers free design services for kitchen and bath vignettes for dealers who join the co-op’s home decor program. Tom Snyder, Do it Best’s division manager for building products and home decor, oversees the program, which offers hard and soft flooring, cabinets, lighting and tile. Almost half of Do it Best’s members now carry one or more of the home decor line.
Hills Flat Lumber, situated halfway between San Francisco and Lake Tahoe, opened a new 30,500-square-foot home center on April 16 with 2,000 square feet devoted to home decor. Co-owner Jeff Pardini carries laminate and hardwood flooring and five different series of cabinets. He’s looking at adding tile.
“It gives people another reason to come to our store,” Pardini said. He’s also learned that “hard surface flooring is something people expect a lumber-yard to have in stock.”
Tony Miller, president of Hanneke Hardware & Industrial Supply, converted a former Walgreens in St. Louis into a 10,000-square-foot hardware store. Where the pharmacy once stood, Miller installed Do it Best’s home decor program. Although professional customers already shop at his other two locations (a lumberyard and a home center), Miller now finds general contractors, developers and property managers coming to the hardware store for cabinets and flooring.
“We built our home decor center not just for retail, but for our commercial customers as well,” said Miller, who just submitted a bid to supply cabinets and vanities for a 68-unit apartment complex.
Back to school
Moving sticks and panels during the building boom was child’s play compared to the selling environment many dealers face today. “Some of our members were managing sales, not manufacturing them,” Ondricek said. “They’ve never been through a downturn. Now they have to go out and sell.”
Do it Best is advising its pro dealers to take a close look at their personnel and invest in training. The co-op offers training sessions at its spring and fall markets, as well as in Fort Wayne.
This summer, Do it Best held its first cabinet design, installation and sales training session at co-op headquarters. The program, which lasted nearly four days, drew 30 people from 21 stores.
Paul Brisley, general manager of Best Lumber and Building Center in Mesquite, Nev., sent two of his management personnel to Fort Wayne for training. Brisley opened a new lumberyard in August in one of the most challenging markets in the country. Single-family housing permits in Nevada are down 46 percent year-to-date, compared to 2005. But commercial development is strong, with strip shopping centers, casinos and mixed retail projects rising up out of the desert 80 miles from Las Vegas.
Brisley is no neophyte—he sold his Amarillo, Texas, lumberyard to Stock Building Supply in 2005—but finds his own selling skills put to the test.
“If all you sell is lumber, you’re going broke,” Brisley observed. His six-person sales staff, which ranges from inexperienced to 40 years in the business, have been through Do it Best and vendor-initiated training to familiarize them with the range of products in the store. “I work with [my sales team] on how not to lead with lumber and sheet goods,” Brisley said. He has also stressed field visits to job sites, relationship development and identifying each customer’s strengths and needs.