- Building Material...

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ProSales Buying and Selling Research Report

- Building Material Dealers/Lumberyards

July 2015

Building Material Dealers/Lumberyards

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Table of Contents

Page

PROJECT OBJECTIVES AND METHODOLOGY 3-4

DETAILED RESULTS 5- 37

CLASSIFICATION 6-13

PRODUCTS AND BRANDS SOLD 14-19

INSTALLED SALES 20-24

VENDOR RELATIONSHIPS 25-34

INFORMATION SOURCES 35-37

PROJECT TEAM:

Grant Farnsworth Account Manager

Grant Gries

Project Director

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3

Project Objectives and Methodology


4

Project Objectives and Methodology

The findings cited in this report are based on a survey sponsored by Hanley Wood. The survey was conducted by The Farnsworth Group.

Project Objectives

Design and execute a survey among building material dealers/lumberyards, specialty dealer/distributors, building material wholesalers and two-step distributors. (This report contains the Building Material Dealers/Lumberyard data).

Primary objective was to capture data on categories currently offering, number of brands offered (in each category), and percentage of sales from their primary brands.

Other firmographic information collected: •  Number of locations, •  Total sales volume, •  Proportion of sales to various pro types, builder types

Project Methodology

!  92 surveys were completed online with Building Material Dealers and Lumberyards across four census regions.

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5

Detailed Results


6

Classification

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7

Q2. Including yours, how many different locations does your firm operate?

# of Locations Operating, Sales Volume

25.0%

12.0% 7.6%

19.6%

8.7% 5.4%

8.7% 3.3%

9.8%

0%

50%

1 2 3 to 4 5 to 9 10 to 24 25-49 50-99 100-199 200 or more

Total

4.3% 4.3%

9.8% 9.8%

22.8%

5.4% 6.5%

14.1% 10.9%

6.5%

0%

25%

less than $500,000

$500,000 - $999,999

$1.0 - $2.9 million

$3.0 - $4.9 million

$5.0 - $9.9 million

$10.0 - $14.9 million

$15.0 - $19.9 million

$20.0 - $49.9 million

$50.0 - $74.9 million

$75.0 - $99.9 million

Total

Q3. What was your location’s total sales volume (sales to all types of customers) in 2014?


8

Q4_1. How many OUTSIDE salespeople does your location currently employ?

Number of Outside/Inside Sales People Employed

4.3% 3.3%

14.1% 13.0% 10.9%

28.3%

16.3%

9.8%

0%

30%

None 1 2 3 4 5 to 10 11 to 25 More than 25

Total

Q4_2. How many INSIDE salespeople does your location currently employ?

14.1% 13.0% 12.0% 9.8%

5.4%

27.2%

12.0%

6.5%

0%

30%

None 1 2 3 4 5 to 10 11 to 25 More than 25

Total

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Q5. How many credit accounts for professional customers are currently active at your location?

Number of Credit Accounts for Pros

1.1% 4.3%

6.5%

13.0%

35.9%

23.9%

15.2%

0%

50%

None 1 - 9 10 - 49 50 - 99 100 - 249 250 - 499 500 or more

Total


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Q6. About what proportion of your location’s sales are to each of the following types of customer? (Mean Summaries)

Proportion of Sales

Builders/new residen-al 43.3%

Remodelers /specialty

contractors 18.5%

Consumers 11.8%

General contractors

13.3%

Sub-‐contractors

9.7% Other 3.5%

(If have sales to builders) About what proportion of your builder/contractor sales are to each of

these types?

Custom 46.5% Produc9on 24.0% Commercial 16.3% Other builders 13.3%

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Q7. How important do you feel your location’s sales people are in helping your professional customers make the right decisions about the types and brands of building products they choose for their projects?

Importance of Sales Staff

3.3%

9.8%

27.2%

59.8%

0% 100%

2

3

4

5

Total

Mean ra'ng – 4.43 Median ra'ng -‐ 5.00

Very Important

Not At All Important

Top 2 Ra9ng 87%


12

Q8_A. About what percentage of the time do your location’s sales people recommend specific brands of products when working with customers?

Sales Staff – Introducing/Recommending brands

2.2% 8.7% 16.3%

43.5% 29.3%

0%

75%

Never 1% - 24% 25% - 49% 50% - 74% 75% - 100%

Total

Q8_B. About what percentage of the time do your location’s sales people introduce new products or brands when working with customers?

2.2%

35.9% 34.8% 23.9%

3.3% 0%

50%

Never 1% - 24% 25% - 49% 50% - 74% 75% - 100%

Total

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Q10. About what proportion of your location’s building materials are purchased from each of the following? (Mean Summary)

Proportion of Building Materials Purchased From…

From Manufacturers

directly 49.2%

From distribu-on

44.6%

Other 6.2%


14

Products and Brands Sold

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Q9_A. Does your location currently sell this category…?

Categories Sold

79.3%

81.5%

81.5%

82.6%

83.7%

83.7%

84.8%

84.8%

87.0%

87.0%

88.0%

88.0%

0% 75%

Locksets/hardware

Decking: composite/vinyl

Lumber: engineered

Windows: vinyl

Lumber: sheathing

Lumber: dimensional

Doors: interior

Lumber: OSB

Housewrap

Fasteners

Adhesives/sealants/caulks

Doors: exterior

69.6%

71.7%

72.8%

72.8%

72.8%

76.1%

76.1%

77.2%

77.2%

77.2%

78.3%

78.3%

0% 75%

Tools: hand

Siding: engineered wood

Roofing materials

Windows: skylights/roof

Insulation

Windows: wood or clad wood

Siding: fiber cement

Deck railing systems

Decking: treated lumber

Lumber: manufactured trusses/joists

Molding/millwork/trim: exterior

Molding/millwork/trim: interior

41.3%

43.5%

46.7%

47.8%

48.9%

52.2%

53.3%

54.3%

63.0%

64.1%

68.5%

0% 75%

Paints/stains

Manufactured stone veneer

Wood finishes/preservatives/

repellants

Windows: aluminum

Foundation waterproofing

Siding: vinyl

Cabinetry

Windows: fiberglass

Tools: power

Siding: hardboard

Stair parts/systems


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Q9_B. If sell, how many different brands in this category does your location currently carry? (Mean Summary)

# of Brands Carried per Category

3.00

3.21

3.24

3.32

3.39

3.40

3.54

3.83

3.91

4.04

4.95

5.11

0 10


Locksets/hardware

Cabinetry



Doors: exterior

Doors: interior

Fasteners

Tools: power

Lumber: dimensional

Tools: hand


1.94

1.99

2.00

2.20

2.28

2.54

2.60

2.68

2.78

2.79

2.82

2.86

0 10

Siding: vinyl

Lumber: engineered



Housewrap

Windows: vinyl

Lumber: OSB

Paints/stains

Roofing materials

Wood finishes/preservatives/ repellants


Lumber: sheathing

1.51

1.52

1.53

1.56

1.59

1.60

1.60

1.62

1.75

1.79

1.80

0 10

Siding: hardboard




Windows: aluminum

Insulation

Windows: fiberglass


Stair parts/systems



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Q9_C. If sell, roughly what percentage of your sales n this category came from your location’s primary brand in 2014? (Mean Summary)

% of Category Sales from Primary brand

74%

78%

78%

79%

80%

80%

81%

81%

82%

83%

84%

86%

0% 100%



Windows: fiberglass

Housewrap

Insulation


Siding: hardboard




Stair parts/systems

Windows: aluminum

67%

68%

68%

69%

69%

70%

70%

71%

72%

73%

73%

74%

0% 100%

Roofing materials


Locksets/hardware

Doors: exterior



Paints/stains

Doors: interior

Siding: vinyl

Lumber: engineered


repellants


53%

58%

60%

64%

65%

65%

66%

66%

66%

66%

67%

0% 100%

Tools: hand

Tools: power

Lumber: dimensional

Lumber: OSB

Fasteners




Windows: vinyl

Cabinetry

Lumber: sheathing


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Q11. For which of these products did your location add and/or change brands in the last 12 months?

Categories where Adding/Changing Brands

8.7%

8.7%

8.7%

9.8%

9.8%

10.9%

12.0%

12.0%

13.0%

14.1%

15.2%

17.4%

0% 25%

Doors: interior

Insulation

Roofing materials

Doors: exterior


Paints/stains

Cabinetry


Housewrap




4.3%

4.3%

5.4%

5.4%

5.4%

5.4%

5.4%

5.4%

6.5%

6.5%

6.5%

8.7%

0% 25%

Locksets/hardware

Lumber: engineered

Fasteners


Lumber: OSB



repellants

Windows: fiberglass

Tools: hand


Tools: power

Windows: vinyl

40.2%

1.1%

2.2%

2.2%

2.2%

2.2%

2.2%

3.3%

3.3%

3.3%

4.3%

4.3%

0% 25%

None of these




Siding: hardboard

Siding: vinyl

Stair parts/systems

Windows: aluminum


Lumber: sheathing


Lumber: dimensional

Totals may exceed 100% due to mul'ple responses.

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Q12. Which of these manufactured components does your location currently offer?

Manufactured Components Carried

85.9%

69.6% 68.5%

60.9%

27.2% 23.9%

8.7%

0%

100%

Pre-hung doors Floor joists Roof trusses Pre-hung windows

Wall panels Pre-built stairs None of these

Total

Totals may exceed 100% due to mul'ple responses.


20

Installed Sales

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For which of the following product categories does your location currently offer installed sales?

Installed Sales Offered

13.0% 13.0% 13.0% 12.0% 10.9% 10.9% 10.9%

2.2% 1.1% 1.1% 1.1% 1.1% 1.1%

0%

25%

Decks Roofing Housewrap Floor joists Siding Stairs Wall panels Shelving/ mirrors

Flooring Shower doors

Garage Doors

Fireplaces Water heaters

32.6% 29.3% 28.3%

21.7% 19.6%

16.3% 15.2% 15.2% 14.1% 14.1%

0%

25%

50%

Doors: exterior

Windows Cabinetry Insulation Doors: interior Locksets/ hardware

Molding/ millwork/

trim: interior

Framing Molding/ millwork/

trim: exterior

Roof trusses

Total

*Includes top responses. Totals may exceed 100% due to mul'ple responses.

46.7% Do NOT offer installed sales


22

Q14. If your location offers installed sales, who handles the product installation?

Installed Sales

42.9% 53.1% 46.9%

4.1% 0%

75%

Subcontractor who works for other firms also

Employees of firm Subcontractor who works only for your firm

Other

Total (n=49)

Q15. If your location offers installed sales, what proportion of your location’s installed sales are to each of the following types of customers? (Mean Summaries)

Consumers 18.9%

Builders: produc9on 33.8%

Builders: custom 25.6%

Remodelers/replacement contractors

10.4%

Builders: commercial

8.2%

Other 3.1%

Total (n=49)

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Increase over next two years

79.6% Remain about the same 20.4%

Decrease over next two years

0.0%

More likely if installed sale

53.1% No difference

42.9%

Less likely if installed sale

4.1%

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Installed Sales

Q16. (If offers installed sales) Is your location more or less likely to be involved in selecting the brand of product to be used in an installed sale than in a non-installed sale? (Mean Summaries)

Total=49

Q17. If your firm offers installed sales of products, do you project this business to:

Total=49


24

Installed Sales

Q18. How does your location charge customers for product installation? (n=49)

53.1% 49.0%

2.0% 2.0% 0%

75%

As a separate fee Included in cost of materials

Both Combined labor and material

Total

*Total may exceed 100% due to mul'ple responses.

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25

Vendor Relationships


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Q19. Thinking about companies that sell building products to your location, about how many different vendors does your location currently do business with?

Number of Vendors Using, Meet With

3.3% 5.4% 5.4% 14.1%

30.4%

41.3%

0%

50%

None 1 to 5 6 to 10 11 to 20 21-40 More than 40

Total

Q20. About how many building product vendors personally meet with individuals at your location each month?

4.3% 1.1%

5.4% 3.3% 7.6% 6.5%

29.3%

42.4%

0%

50%

None 1 2 3 4 5 6 to 10 11 or more

Total

Mean – 64.6 Median -‐ 35

Mean – 12.6 Median -‐ 10

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Q21. What would make you most interested in a visit from a building product vendor?*

Vendor Visits

79.3%

62.0% 57.6% 52.2% 47.8%

33.7%

0%

100%

New product presentation

Exclusivity opportunities

Special program (rebates,

incentives, etc.)

Profitability of selling products

Comparisons with competitive

products

Supplier research on product

performance

Total


Q22. When building product vendors call on your location, who do they typically meet with?

63.0% 51.1%

59.8%

34.8%

1.1% 0%

75%

Sales management/sales staff

Senior management Purchasing department Merchandising managers/ buyers

Inside sales coordinators

Total


Yes 68.5%

No 17.4%

Don’t know 14.1%

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Vendor Calls

Q23. Have building product vendors called on your location’s core customers in the past 12 months?

Yes 90.5%

No 9.5%

(If yes) have they made joint calls with your sales people when calling on your location’s core customers?

Total n=92

Total = 63

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Yes 66.3%

No 10.9%

No preference 22.8%

29

Vendor Calls

Q24. Would you prefer that building product vendors make joint calls on your location’s core customers with your sales people?

Total = 92


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Q25. How important are your firm’s salespeople in deciding which brands of products are sold to customers?

Insulation Thickness

3.3%

7.6%

16.3%

37.0%

35.9%

0% 75%

1

2

3

4

5

Total 92

Very Important


Top 2 Ra9ng 72.8%

BoMom2 Ra9ng 10.9%

Mean ra'ng – 3.95 Median ra'ng -‐ 4.00

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Q 26. How important are each of the following attributes in a successful relationship between your

location and its building product vendors? (Mean Summaries)

Successful Relationship Drivers

3

3.28

3.37

3.5

3.53

3.58

3.68

3.85

4.01

4.02

4.03

4.03

4.05

4.1

4.12

4.33

4.53

4.59

4.64

4.76

1 2 3 4 5

Online ordering

Regular personal visits

Installation training

Support of contractor training at your location

Low prices

Dealer training services

Broad range of products

Available technical reps

Available sales reps

Deliveries in small quantities

Product samples and displays

No-hassle returns

Product literature availability

Streamlined ordering processes

Short lead times

Special order capabilities

Product availability

Knowledgeable sales reps

Quick problems resolution

Accurate deliveries

Total

Very Important



32

Q 27. How well do the vendors that currently sell building products to your location perform on each of

these attributes? (Mean Summaries)

Relationship Driver Performance

2.76

2.80

2.89

3.08

3.09

3.17

3.24

3.25

3.34

3.35

3.36

3.39

3.43

3.43

3.59

3.64

3.65

3.67

3.74

3.95

1 2 3 4 5


Online ordering


No-hassle returns


Low prices




Quick problem resolution


Short lead times








Accurate deliveries

Total

Very Important


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Importance vs Performance

3.08

3.36

3.43

3.43

3.39

3.67

3.64

3.65

3.35

3.95

4.03

4.03

4.05

4.1

4.12

4.33

4.53

4.59

4.64

4.76

1 2 3 4 5

No-hassle returns




Short lead times




Quick problems resolution

Accurate deliveries

Importance

Performance

Very Important



34

Importance vs Performance

2.80

3.24

2.76

2.89

3.17

3.09

3.74

3.25

3.59

3.34

3.00

3.28

3.37

3.50

3.53

3.58

3.68

3.85

4.01

4.02

1 2 3 4 5

Online ordering




Low prices






Importance

Performance

Very Important


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Information Sources


36

Q28. In the last 12 months, what actions have you taken as a result of seeing ads in ProSales?

Actions Taken after Seeing Ad in ProSales

19.6%

1.1%

20.7%

20.7%

21.7%

26.1%

32.6%

56.5%

57.6%

60.9%

0% 75%

No actions taken

Other

Contacted advertiser's local sales rep or distributor

Purchased/ordered a product/ service

Contacted an advertiser via phone, fax, or mail

Filed ad for future reference

Recommended a product/ service

Passed ad along to others

Visited an advertiser's web site

Discussed ad with others

Total


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Most Valuable Information

17.4%

20.7%

35.9%

40.2%

41.3%

44.6%

47.8%

48.9%

53.3%

64.1%

0% 75%

Testimonials from other dealers

Volume discounts/rebate programs

Pricing

How product helps avoid callbacks

Listing of full product line

Warranty

Dealer needs and interests

Installation information

Competitive comparisons

New, product announcements

Total


Q29. What types of information in advertisements and manufacturers’ literature are most valuable to you?

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