Milton Hardware & Lumber: Into the Upper Decks
Milton Hardware & Lumber turns to deck sales.
Roughly eight years ago, as the LBM industry shook off the dust from a collapsing housing market, an upstate New York hardware store began discussing a bold idea.
With dozens of independent hardware stores and pro dealers closing their doors for good, Milton Hardware & Building Supply decided to go in another direction and expand its inventory. Rather than remain a community hardware store — carrying a full line of Benjamin Moore paints, Stihl power equipment, and a wide array of hand tools, power tools and accessories — the business decided to move into lumber and building materials.
“We decided to expand our customer base and continue rounding out our business. We set our parameters and knew we had to build-on an overall selection of products,” owner Jeff Paladino told HBSDealer. In the third quarter of 2017, the dealer began the transition to LBM by easing out of the heavy-power-equipment-rental business. Paladino says the move was made to free up capital that would be used to further expand the building materials side of the company.
Currently, the dealer carries a 60/40 split of traditional hardware store merchandise to building materials. But the plan is to soon shift to a 50/50 split and eventually flip to a 60/40 split with LBM products becoming the heavier category.
According to LBM Manager Jim Morrison, Milton competes against area dealers and home centers with a focus on high-quality materials that customers want and appreciate. “Customers are willing to pay a little more for higher quality materials,” he says.
Paladino added: “From the onset we planned on focusing on quality materials to differentiate ourselves from the boxes and the competition,”
Milton Hardware & Building Supply has since become a destination point for building products in New York’s Hudson River Valley region, particularly when it comes to high-end, quality materials. And that effort to become a go-to locale for building products and lumber has paid off, according to the dealer. The business has quickly earned a strong reputation among regional builders and remodelers.
Now settled into the LBM market, high grade decking has become an avenue to pursue while growing the LBM side of the company.
In 2017, a new drive-thru lumberyard — complete with an Auto-Stak system — was opened at the dealer’s 10-acre site and headquarters in Milton, N.Y., just under 80 miles north of Manhattan. As the dealer’s evolution into a building materials business has continued, decking has become a key ingredient. “And that was all according to plan,” Paladino said.
Milton’s LBM customer base is roughly 75% remodeler and 25% home builder. But the lines are drawing more toward the center of the split with residential builder sales growing in the past year.
Roughly 60% of Milton’s total decking product sales are from treated lumber with the remaining 40% being derived from composites. As the company has grown its line of decking products, it has also expanded its offerings of ancillary deck SKUs and brands.
Meanwhile, statistics and forecasts from around the industry support the idea that there is potential for a tall coin in the decking category.
NADRA — the North American Deck and Railing Association — estimates that the total decking industry is worth more than $6 billion. But by 2022 the market could reach a size of $15 billion.
Analyzing building permit data, there are more than 50 million existing decks in the United States — about 40 million residential and 10 million commercial, according to NADRA. But many of these decks have either reached or exceeded a 25-year life expectancy. That puts a lot of homeowners in line for a new deck.
Meanwhile, the most recent decking report from the National Association of Home Builders described decking as a category on very solid ground when it comes to new residential construction. Of the 850,000 single-family homes started in 2016, nearly 24% included decks, according to the study. The NAHB based its findings on data from the Survey of Construction (SOC), conducted by the U.S. Census Bureau.
The 2016 figure marks a slight increase over the prior-year report, which indicated that 23.7% of single-family home starts included a deck. Both figures are up from the 22.2% level recorded in 2012. (From 2005 to 2008, about 25% of new single-family homes had decks.)
The deck business is more regional than most home categories. In New England, 62% of new single-family homes included decks, followed by 51% in the East South-Central states, and 45% in the West North Central states. In contrast, just 4% of new homes had decks in the West South Central, including Texas.
While composites and treated woods are the most common material in new decks, plastic materials — including PVC — are rising in the Northeast.
Morrison says deck sales at Milton are split roughly 50/50 between new decks and replacements. “We’re getting a lot of people replacing the surface, but we’re getting as many replacement sales as new deck sales,” he says.
Again — quality products are the key to Milton’s gaining and edge in deck sales.
In a recent HBSDealer reader poll, we asked readers what would be the key to selling decks in 2019. The top two responses — both receiving an 18% share of the vote — said carrying major deck brands along with carrying a wide product assortment would net larger deck sales this year.
As decking sales continue to grow at Milton, the company has its next LBM pursuit waiting in the wings. Looking down the road — but not too far down that road — a wide selection of windows and doors is the next step for Milton Hardware & Building Supply, according to Paladino.
“We are always listening to our customers to see where they want us to go,” he says. “We are always looking to differentiate ourselves from the competition.”
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