In Syracuse, Erie Materials maintains its forward course
Central and Upstate New York’s Erie Materials has been nailing down a serious reputation for 50 years.
Since its founding, the Syracuse, New York-based building materials distributor has expanded to 10 locations, including a centralized distribution center. Erie Materials has plans in the new year for its 11th location, slated to open later this year in Poughkeepsie, New York, roughly the mid-way point between Manhattan and Albany.
Asked how the company continues to mount success, Erie Materials President Chris Neumann told HBSDealer, “I think we have been able to maintain a simple philosophy that my father opened this business with: Sell quality products at fair prices and provide superior customer service.”
Founder Bob Neumann first opened the doors to Erie Materials in Syracuse on June 6, 1973. At the time, the company included a single building, an old delivery truck, a broken forklift, and three employees.
Erie Materials suffered a major loss in 2023, when Bob passed away on Sept. 18. In one of his last statements regarding Erie, the founder described the company he built: “The industry is a lot different than when we started 50 years ago. We’ve adapted to the increased competition by upping our service levels, growing in scale, and continue to recruit talented people. Without these high-quality and knowledgeable people, Erie Materials wouldn’t be as successful as it is today.“
Reflecting on those thoughts, Bob’s son Chris says, “It sounds easy but you can’t execute that strategy without exceptional people and we have been very fortunate to always have long-standing committed people.”
Erie Materials has also been open to diversifying its product offerings over the years while sticking with a focus on exterior building materials. Over the years, the company has expanded its categories from residential roofing to commercial and metal roofing, vinyl siding and specialty siding, windows and doors, decking and railing, stone veneer, seamless gutters, and tools.
According to Chris, diversification of products has been key to moving through highs and lows in the building cycle and the economy.
Organic growth
Additionally, every location Erie has opened has been a greenfield. While there have been companies up for sale, Erie made a decision not to pursue acquisitions.
“Buying another company has always been out of our comfort zone,” Chris says. “We also put such an emphasis on our culture that we never wanted to inherit anyone else’s.”
The company president adds that when Erie has opened locations it has always had a core of existing Erie employees, particularly at the branch leadership levels.
Erie Materials currently doesn’t operate in any major metro markets. This includes 9 locations in New York state and two in Pennsylvania (Scranton and Williamsport). With that said there may be less competition but also less total market share to capture, Chris says.
“Upstate New York and northeast Pennsylvania have been very consistent. There haven’t been a lot of spikes or downturns in business volume. We have to make adjustments to our business model but probably not much compared to other major markets.”
The company’s customer mix is broken down by about 65% remodeling contractors, 15% home builders and new construction, and 20% commercial roofing contractors.
When Erie Materials opened under the guidance Bob Neumann, it was an existing failing business that he bought with everything he had at the time. Prior, Neumann had spent eight years in sales and two years in management at a local lumberyard.
During his previous tenure, Bob recognized there was a need for better service in the market. He also had a desire “to do his own thing,” Chris says.
Modest goals were originally set for Erie, This included making enough profit to support his family “and to take my mom on vacation once a year,” Chris says. “Early on, he worked harder and longer than anyone.”
As the company grew, Bob hired people based on personality and potential instead of experience. These employees grew into leadership roles and challenged him to expand and grow.
“He empowered people to make decisions on their own and developed what turned out to be a very hands off leadership approach. He would often say ‘Hire good people and let them do their job’,” Chris says.
Words of Wisdom
When it came to business wisdom, Bob had another plan he stuck with.
“I once asked him when I was really young what the secret to owning a business was,” Chris says. “He said ‘don’t spend more money than you make’. I laughed and asked him again and repeated the same answer.”
For five decades, Erie Materials has left the majority of its profits in the business. The move has given the company the flexibility and confidence to make investments in inventory, equipment, people, and infrastructure when we need to.”
He also always emphasized the importance on taking care of customers and employees. “It didn’t matter how big of a customer or what role an employee had — everyone was important to the success of Erie,” Chris notes.
Erie has also kept up with the times by continuing to upgrade tech platforms, including its customer relationship software (CRM), a digital customer portal, a POD system, and interfaces with manufacturers.
Today’s market challenges include a supply chain that has not fully recovered from the pandemic, resulting in inconsistent lead times for products. Labor has also been an issue with finding and retaining quality employees more difficult than ever.
“Investing in people and culture has never been more important,” Chris says. “Give them a reason to join, but more importantly: Give them a reason to stay.”
(Editor's Note: This article originally appeared in the January 2024 edition of HBSDealer. Soon after the issue was sent to the printer, Erie Materials announced that it had acquired NEG Building Products.)
