Siding : DESIGNER ROUND, Reversible Trim : OLD MILL ® TEXTURE FIRST IMPRESSIONS LAST. AND LAST AND LAST. BEFORE A HOME BUYER STEPS ONE FOOT INSIDE THE FRONT DOOR, THEY’VE ALREADY DECIDED WHETHER THE HOUSE IS DARLING OR DRAB. THE SIDING YOU CHOOSE WILL HELP SWAY THAT OPINION AND DRAW THAT BUYER. TRUWOOD KNOWS WHAT YOUR SIDING CHOICE MEANS TO THE LOOK OF A HOME, SO WE OFFER AN UNEXPECTED VARIETY OF STYLES — SURELY ONE WILL MAKE JUST THE RIGHT IMPRESSION. BECAUSE BUYERS MAY NOT BE ASKING FOR TRUWOOD BY NAME, BUT THEY ARE ASKING FOR IT. TruWood’s material content is backed by third-party certifier Scientific Certification Systems. SCS-MC-01178 | www.scscertified.com | FSC-C002971 www.TruWoodSiding.com | ASK US ABOUT OUR FSC ® PRODUCTS. The TruWood Collection, manufactured by Collins Products LLC | phone 1.800.417.3674 EXPANDING YOUR DECKING SALES MOULDING & MILLWORK FORECAST F E B R U A R Y 2 0 1 3 The MERCHANT Magazine THE VOICE OF THE WEST’S LBM DEALERS & DISTRIBUTORS – SINCE 1922
Transcript
Sid
ing
: D
ES
IGN
ER
RO
UN
D,
Re
vers
ible
Tri
m:
OLD
MIL
L® T
EX
TU
RE
FIRST IMPRESSIONS LAST.
AND LAST AND LAST. BEFORE A HOME BUYER STEPS ONE FOOT INSIDE THE FRONT DOOR, THEY’VE ALREADY
DECIDED WHETHER THE HOUSE IS DARLING OR DRAB. THE SIDING YOU CHOOSE WILL HELP SWAY THAT OPINION
AND DRAW THAT BUYER. TRUWOOD KNOWS WHAT YOUR SIDING CHOICE MEANS TO THE LOOK OF A HOME,
SO WE OFFER AN UNEXPECTED VARIETY OF STYLES — SURELY ONE WILL MAKE JUST THE RIGHT IMPRESSION.
BECAUSE BUYERS MAY NOT BE ASKING FOR TRUWOOD BY NAME, BUT THEY ARE ASKING FOR IT.
TruWood’s material content is backed by third-party certifier Scientific Certification Systems.
SCS-MC-01178 | www.scscertified.com | FSC-C002971
www.TruWoodSiding.com | ASK US ABOUT OUR FSC® PRODUCTS.The TruWood Collection, manufactured by Collins Products LLC | phone 1.800.417.3674
EXPANDING YOUR DECKING SALES MOULDING & MILLWORK FORECAST
FEBRUARY 2013
The MERCHANT MagazineTHE VOICE OF THE WEST’S LBM DEALERS & DISTRIBUTORS – SINCE 1922
Whether you’re selling to a pro or a do-it-yourselfer, you want a satisfied customer, not a potential warranty claim.
And nothing satisfies customers like naturally strong, durable and beautiful FSC® certified Humboldt Redwood. Contractors love it because it’s easy to work with. Homeowners love it because it looks great and lasts for decades with easy maintenance. In fact, with Humboldt Redwood, the only things that come back are satisfied customers.
Let’s build a long-term, profitable business relationship together.
Contact Julie Wright at (707) 764-4472 or visit us at GetRedwood.com
FSC® C005200
if it creates aLOW-MAINTENANCE DECK
HIGH-MAINTENANCE CUSTOMER?
“Beautiful decks and satisfied homeowners. That’s two big reasons why I love working with
redwood.”
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What good is a
Christopher Stewartawardwinningdecks.com
AllweatherWood.comGetRedwood.com
UltraShield Composite Decking“It’s Too Good To Be Wood”UltraShield Composite Decking“It’s Too Good To Be Wood”
4 The Merchant Magazine February 2013 Building-Products.com
February 2013Volume 91 Number 8
OnlineBREAKING INDUSTRY NEWS, INDUSTRY PHOTO DOWNLOADS, & THE MERCHANT: DIGITAL VERSION
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CHANGE OF ADDRESS Send address label from recentissue, new address, and 9-digit zip to address below. POSTMASTER Send address changes to The MerchantMagazine, 4500 Campus Dr., Ste. 480, Newport Beach,Ca. 92660-1872.The Merchant Magazine (ISSN 7399723) (USPS 796-560) is published monthly at 4500 Campus Dr., Ste. 480,Newport Beach, Ca. 92660-1872 by Cutler Publishing,Inc. Periodicals Postage paid at Newport Beach, Ca., andadditional post offices. It is an independently-owned pub-lication for the retail, wholesale and distribution levels ofthe lumber and building products markets in 13 westernstates. Copyright®2013 by Cutler Publishing, Inc. Coverand entire contents are fully protected and must not bereproduced in any manner without written permission. AllRights Reserved. It reserves the right to accept or rejectany editorial or advertising matter, and assumes no liabil-ity for materials furnished to it.
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6 The Merchant Magazine February 2013 Building-Products.com
TOTALLY RandomBy Alan Oakes
What’s your new growth strategy for 2013?I HOPE YOUR YEAR has started well. After the first weeks, we are hearing mostly
good news, which is a good sign. Now that the fiscal cliff issue has been some-what settled, it will interesting to see if there is any fallout to the economy from theincreased taxes pretty much everyone will be paying. The first obvious hit has beenthe increase in FICA tax that I certainly saw in my first pay slip this week. I am suremore stealth surprises will come.
But, in my calls to contacts—many of whom are owners—when I ask how theirbusinesses are doing, the first response is things are getting better. When I press, Iget well, things are not getting worse. Now I think most businesses have seen someforward progression, but there is no doubt we have been operating with the philoso-phy that “flat is the new up.” We have all faced grave challenges to keep our busi-nesses operating profitably and have been happy to escape the past two or threeyears on an even keel. The successful entrepreneurs and managers have weatheredthe storms. Some competitors have not, but—as is life—a whole new set of chal-lenges may be coming our way.
I have to say, doing business is not as easy as it once was. Starting a completelynew business or substantially repositioning an existing business is a lot easier to doin a buoyant economy than in the uncertainty of the past few years. Simply doingwhat we did in the past may no longer be enough. Most entrepreneurial businessesin the past ran their companies “off the cuff,” but that is less easy to do these days.
Along with supply, another primary issue most businesses fight with today iscash flow. As business starts to grow again that will probably get worse due to theshrinkage in credit lines over the last four or so years. At a time when banks havenot been kind to this industry, it is certainly time—ahead of the curve—to look toimprove credit lines, search for new lines of credit, and discuss with your suppliershow you might get an increase in credit line to support a growing market. Mostentrepreneurs are good at seeing how to grow business, but the nuts and bolts offinding capital may not be their strong point. Many a fast-growing company hasgone out of business because it did not have enough capital or credit to support thegrowth. We certainly have seen that the past few years.
Most banks or investors will also want to see that there is a management team inplace to be able to guide the business going forward and, more importantly, thatthere is a good plan in place to achieve the growth. Do you have a formal growthstrategy for 2013 and 2014? How will your company manage it? All data suggesthousing starts will be 900,000+ this year—nice growth over 2011. In an improvingeconomy, remodeling will continue to increase, too. If we do see an explosion atsome point (and I am not suggesting it is imminent), how equipped are we to handleit? The future, for sure, is uncharted and it will a require a different mindset thanfive years ago as well as a different mindset than we needed to survive the past five.A lot of management and staff that were here in the boom of 2003-2006 are nolonger in place. In fact, for many companies, there hasbeen no real growth since 2007.
Many learned the hard way that what goes up cancome down even faster. We would all like to think wehave learned a lot and will not get ourselves in thesame mess, but we will—human nature! So have aviable, comprehensive plan in place to manage theincrease in capital cost. If we have been able to securelow-interest funding these past few years, it isclear that as the economy improves, rateswill also start rising. All that being said, wehave stronger, battle-worn owners andmanagers, now better equipped to manageand grow responsibly.
Building-Products.com February 2013 The Merchant Magazine 9
Stairs step upas trim’s fastestclimbing productSTAIRWORK WILL POST the biggest
gains among all moulding and trimproducts in the U.S.’s $5.4-billion-a-year market, rising 11.3% annuallythrough 2016, according to a newFreedonia Group forecast.
Because most stairwork is installedin new structures, rebounding newconstruction spending will spurincreases for such components as ban-isters, risers and treads.
The two most commonly usedmaterials in stair parts and systems arewood and metal, due to their strength,durability and beauty. Wood domi-nates the residential market, whilemetal accounts for the largest share of
non-residential demand. In general,stairwork is more frequently used innon-residential, where structures withmore than one story must incorporatestairs as safe alternatives to elevatorsin case of fire or power outage.Nonetheless, residential wood stair-cases are generally more expensivethan non-residential metal stair sys-tems.
In recent years, the value of metalstairworks overtook wood in the over-all moulding industry, due to the lowlevel of residential building and thelow price of wood. Going forward,however, Freedonia expects woodstairwork demand to rise at an above-
INDUSTRY TrendsMoulding & Millwork Forecast
average pace, reaching $955 millionby 2016. With residential constructionrebounding, many builders and home-owners will opt to install more decora-tive stairways, such as those with intri-cately carved railings and balconies, toimprove the appearance and value oftheir homes.
Overall U.S. demand for mouldingand trim is forecast to rise nearly 11%per year to $9.0 billion in 2016, drivenby a sharp rebound in housing andbuilding construction. Engineeredwood will be the fastest growingmaterial, primarily for residentialmoulding and exterior trim.
Demand for interior moulding inthe new non-residential market shouldrise 8.4% a year through 2016 to $790million. Such structures as restaurants,hotels, resorts, casinos, high-end retailsites, and office buildings install chairrails, mouldings, baseboards, casingsand other components for both aes-thetic and practical reasons. For exam-ple, owners of restaurants may useengineered wood or plastic chair railsto prevent damage to a wall surface.
Non-residential improvement andrepair demand for interior mouldingswill climb 3.3% per year to $290 mil-lion in 2016—the slowest growth rateof all markets. Few building ownersand managers replace interior mould-ings for aesthetic reasons, onlyinstalling new products when the oldtrim has become damaged or worn.
Moulding Demand by Market(million dollars)
Source: The Freedonia Group “Moulding & Trim to 2016”
Residential
New
Improvement & Repair
Nonresidential
New
Improvement & Repair
Total Moulding Demand
20012337
1296
1041
857
633
224
3194
20063106
1811
1295
955
702
253
4061
20111549
552
997
776
529
247
2325
20162725
1485
1240
1080
790
290
3805
20213665
2185
1480
1250
940
310
4915
10 The Merchant Magazine February 2013 Building-Products.com
LE.K. CONSULTING’S THIRD annual survey of 650 con-tractors shows that purchasing preferences and priori-
ties reflect a renewed sense of optimism. For the first time,the report also identifies top-rated man ufacturers across 14categories, based on contractor responses.
According to the survey, many contractors are simplywalking away from jobs that they don’t expect will provideappropriate margins (see Figure 1). They are also findingnon-price mechanisms to address pricing pressures, withnearly half of those surveyed performing extra servicesrather than reducing their quotes.
When selecting products, contractors have continued tovalue their trusted brands during the downturn. They gener-ally remain loyal to proven products, rather than risk pur-
Contractors increasinglyloyal to brands, suppliers
FEATURE StoryContractors’ Buying Patterns
chasing less expen sive alternatives by other manufacturers.Contractors are also decreasing their searches across multi-ple retailers and distributors to purchase their favored prod-ucts at the lowest prices.
Durability Top ConsiderationThe importance of using trusted brands reflects contrac-
tors’ belief that durability is the number-one purchasing cri-terion. Product reputation and warranty are among the topproduct selection considerations (see Figure 2). Priceremains a significant influencer on contractor purchasing,but has run second to durability in each of the three sur-veys. Energy efficiency is also significant, with 57% ofcontractors stating that it is an important consideration.
Measuring Channel ShiftsIn the two previous L.E.K. surveys, contractors stated
that price was a major reason for shopping at big box stores
Figure 1Contractor Response to Price Pressure
Percent of Contractors Rating 6 or 7
Figure 2Contractor Purchase Criteria Importance
Percent of Contractors Rating 6 or 7
Building-Products.com February 2013 The Merchant Magazine 11
even though they under-performed onother services compared to pro chan-nels (one-steppers/specialty chains,two-stepper/specialty independentsand broadline distributors).
While price is important this year,more than half of contractors said thatconvenience has driven them to spendmore at big box stores because of suchbenefits as close proximity to job sites,inventory, and product selection. Bigbox stores also have the right productsin stock so contractors can purchasematerials as needed, rather than tie upcapital in materials or worrying aboutstorage logistics of purchased items.
However, other factors are drawingcontractors away from the big boxchannel. As the importance of pricebecomes slightly de-emphasized, theshift toward big box stores appears isexpected to decline slightly during thenext three years (see Figure 3).
Pro channels are seen as providingfaster, more reliable delivery and alsohave other advantages, such as con-tractor services and knowledgeablestaff. This shift is expected to benefitthe one-steppers the most. One- andtwo-steppers are outperforming bigbox stores in areas such as deliveryspeed and on-time guaran tees, con-tractor services, and knowledgeablestaff.
The online channel remains small,but has been growing consis tently.Contractors are increasingly using theInternet to gather product information(particularly on manufacturers’ sites),as well as pricing information onchannel sites.
Ranking the ManufacturersUsing the contractors’ responses,
L.E.K. rated companies based on anaggregate score of the following fourattributes: product breadth, quality,price and service level (see Figure 4).
Because contractors are loyal todurable brands with strong reputa-tions, earning high performance scoresis critical to product manufacturers.While receiving the highest perfor-mance score in each category isnotable, these categories remain verycompetitive. One-third of the cate-gories have leaders with only a slight-ly higher score than the category aver-age.
Planning for GrowthRenewed confidence in the build-
ing and construction market has con-tractors thinking beyond just price andcost containment. Instead, they are
focusing more strategically on effi-ciency and productivity.
Product manufacturers have thepotential to gain share by pro vidingquality products that demonstrateenergy efficiency or sustainability.Successful product strategies alsorequire original equipment manufac-turers (OEMs) to clearly understandthe product requirements and pricingthresholds of their primary customersegments.
As part of this customer segmenta-tion, OEMs must revisit their channelstrategies to ensure they are providingthe right products through distinct bigbox and pro channels. Manufac turerstypically trade low margins for highvolumes via big box stores.Companies that remain overly com-mitted to this price-sensitive channelmay struggle to increase their rev-enues. To extract sufficient value from
their intellectual property, OEMsshould strongly consider selling newand premium products through prochannels, where profits are traditional-ly higher and the differentiation is sus-tainable.
For this strategy to succeed, how-ever, OEMs must have clear pricingstrategies among channels and estab-lish programs to support their distribu-tion partners. And they must alsounderstand the right mix of innova-tion, quality, and price that attractscontractors to their prod ucts—insteadof to the alternatives next to them onstore shelves.
Manufacturers that can develop andposition targeted products across keysegments of the channel (and provideproduct and “how-to” informationonline) will be positioned to captureadded share as demand continues togrow.
Figure 3Contractor Average Purchase Frequency
by Channel (2006-2015)
Figure 4Highest Performing Manufacturers
12 The Merchant Magazine February 2013 Building-Products.com
Deck and rail design trendsBlurring the boundarybetween indoors and out
Today’s consumer sees little difference between indoorand outdoor living. In fact, manufacturers of popular indoorfurniture brands are rapidly move to launch outdoor collec-tions. Outdoor dining furniture accounts for 52% of all out-door furniture sales and is slated to grow 0.5% this year,topping $2 billion in sales. As 70% of consumers own out-door dining sets, it seems natural that easy access to theseareas dominates the focus of consumers as they create theperfect deck configurations.
Sliding doors, full swing French doors, and transomdoors are very common as a transition from in to out. Thesewider openings bring both the look of the inside out and theoutside in. Most consumers prefer seamless styles fromroom to room, and this preference carries over to the out-doors. As the requirement for more seamless fashion con-tinues, manufacturers of outdoor building products will befaced with adapting to new desires. For deck and railing aswell as siding, this means tracking the trends in flooring,banisters, and wall treatments. Recently, we observed anew development in wallpaper for outdoor applications.
Regional environments and weather patterns greatlyinfluence indoor/out lifestyles. As in interior styling, theuse of wood and stone is preferred, as they tend to be whatthe consumers are familiar with. Decking and railing, likeother interior materials, must duplicate natural materials asrealistically as possible. This has been an ongoing trend inflooring that is projected to continue.
Landscape/Deck IntegrationDeck designs are ever evolving and becoming more than
just a platform off the back of a house. They are integratinginto the landscape or conversely integrating landscapinginto the deck. Decked paths lead to living spaces and cook-ing areas. Foundation plantings are moved to foundationplanters, bringing plants closer to the house for shade with-out plant roots affecting the house foundation.
Mixing materials creates hardscape and softscape areas,which better integrate landscaping into the living area. Italso can support water features more effectively, whichprovides areas for relaxation, and can hide water recoverysystems, storage and utilities.
GardeningWe all are familiar with window planter boxes, especial-
MY EARLY MEMORIES of outdoor living are eating at awood picnic table and setting up folding aluminum
chairs in the yard. Our backyard was where outdoor activi-ties resided, but we had no idea that it was a lifestyle. Whenwe went to summer gatherings, there rarely were specificoutdoor living areas—except maybe a concrete slab.
Then the deck became a popular feature in new con-struction, creating the footprint for today’s outdoor room.Even though pools and patios had a certain appeal, the deckwas a new private backyard space distinctly different fromthe front porch. This privacy element has a similar appealand function as indoor spaces. As the Boomer generationbecame more mature and their indoor spaces were fur-nished, renovated and completed, there came an urge tocreate more functional and aesthetic outdoor spaces.
As the home opens up into one great room indoors andout, the transitions in materials and styles become moreobvious. Selecting flooring or decking, banisters or railings,furnishings, appliances, accessories, colors and materialsall blend into one narrative for the consumer. Color anddesign are the first and possibly the most important criteriafor a consumer in selecting an outdoor living product. Andsince the hipness factor in outdoor living constantlyevolves, retailers need to keep pace with the changing stylerequirements consumers expect.
INDUSTRY TrendsBy George Gehringer, Metaphor LLC
HOT NEW COLORS in decking (above) and flooring (opposite page)bring the indoors out and the outdoors in. (All photos courtesy Metaphor)
Building-Products.com February 2013 The Merchant Magazine 13
ly in urban environments. As the locavore movement con-tinues to expand, there is a greater desire to grow what wecan and buy from local sources as often as possible. Inaddition to utilizing spaces more efficiently, these new gar-den wall systems can act as railings, create privacy,improve climate control, and provide elements of shade.
Rooftop gardening and landscaping are solving heatingand cooling problems by providing a new element of insu-lation. These systems run the gambit from sophisticatedmulti-layered installations that integrate irrigation and rain-fall controls, to modular boxes for ease of installation anduse. The obvious use of these spaces did not come to minduntil restaurants began to harvest their own rooftop herbgardens. The hospitality industry is also transformingrooftops into bar, dining and lounge areas. However, asenergy efficiency becomes a driver in energy independenceand cost control, there are many opportunities to integratedecking systems into these rooftop options.
Water FeaturesThere are many forms of water features in today’s out-
door lifestyles. We all probably have experienced outdoorshowers while at the beach or lake. These connections tonature are being extended to both everyday living and inhigher-end applications, as well as more exclusive hospital-ity settings such as hotels and spas.
Water recovery is not a new idea. However, we expect itto grow in importance as climactic conditions become moreunpredictable. As we all know, there have been severeregional droughts over the past few years, as well as recordrainfalls in other regions, overwhelming storm drains andsewers. As with UV resistance and freeze-thaw conditions,the need to tackle water recovery and system integrationopens up new opportunities for industry.
Fixed FurnitureBuilt-in is not a new idea, but generally it has been left
to the contractor or builder to come up with customizedsolutions. However, we live in an age of systems, whereIkea provides the components and the consumer constructsthe furniture. This is also true in our d-i-y world of massretailers. Customized kits for furnishings, storage, shade,gardening and privacy are solutions consumers seek. Theylook to building product manufacturers to provide not onlymaterial solutions, but lifestyle enhancements.
Shade & Light ControlShade and light control are a big opportunity for built-
ins and add-ons. Shade structures, including pergolas, gaze-bos and pavilions, comprise a $400-million-a-year industry.By integrating materials such as fabrics, mesh and panels,new systems can be created to extend the outdoor seasons.
Color TrendsOver the past two years, we have experienced the suc-
cessful launch of a whole variety of gray and gray-influ-enced colors. Currently we are seeing the emergence of avariety of lighter woods and stones in interior flooring, aswell as new beige and tan combinations in indoor and out-door applications. They allow for a graceful transition withthe browns that have dominated the market.
We see two directions for light color woods. The first isa duplication of spalted woods like maple and pecan. Thedarker brown, gray and caramel streaks add contrast andvariation, making for a more natural looking material. Thesecond look will be in soft wavy multi-color that blends RETAIL FLOORING display concept designed by Metaphor LLC.
almost to a monochromatic appearance. Off-whites, palewarm green influenced grays and a soft hint of red create astriking look is transformed in different lights and shadows.The neutral quality of these light wood and stone colors arethe perfect transition colors from in to out.
Rustic wood has been a staple of the interior flooringmarket for the past 10 years. Reclaimed woods have beenpopular for their re-purpose/re-use/recycle characteristics.
Textures not only help replicate the grain structure ofwood, they can also be used as a way to change the profileimage as well. Sweeping cross grain textures in soft undu-lating waves give the appearance of hand-finished boards,but also provide a new character in traditional settings.Rougher hand-scraped textures need random variations toproduce a more one of a kind look. Different plank widthsin combination can help to increase this random heirloomappearance.
Since 2003, our studio has tracked the colors of interiorbuilding products and décor. In 2008, we began to trackexterior colors using the same process. Exterior buildingproducts like vinyl and pre-cast concrete siding, decking,railing, pavers, planters, fabric, metals, woods and plasticssamples were evaluated against our interior data, revealingvast similarities between indoor and outdoor colors.
Currently we are preparing our 2013-2015 forecast.Grays, gray-influenced colors, and browns continue to bestrong as current colors. Greens also continue and will bemixed with grays and browns to produce new multi-coloredeffects. Blues begin to emerge as a cooler option to thewarm colors in the palette. Beige, tan and caramel in vari-ous tones and shade are emerging in greater quantity.
– George Gehringer is co-owner and creative director fordesign consultancy studio Metaphor LLC, Exton, Pa., and formercreative director for Armstrong World Industries. Reach him at(610) 363-0376 or [email protected].
14 The Merchant Magazine February 2013 Building-Products.com
Recommend compositedecking for harsh climates
best to water, whether from rain,snow, condensation, waves, or evenlawn sprinklers.
Contractors can cut and drill suchdeck boards and railing without com-promising their moisture resistance.They can even install the materialsdirectly on the ground or in the waterwithout voiding the warranty.
Moisture-resistant composites workwell in conventional decks and arealso well suited for pool and hot tubsurrounds, along with lakeside andcoastal installations.
When making a color choice, it isimportant for consumers to considerfade resistance, as all decking fades tosome degree from sun exposure. Somecomposite manufacturers include addi-tional pigments to help offset fadingso that exposed boards stay within thesame color family over time. Checkwith the manufacturer for fade resis-tance details.
Another key trait to evaluate withcomposite decking is its mold resis-tance. Surface molds do not necessari-ly deteriorate deck boards and railing,but they do make them look dirty.Some composite brands add mold andmildew inhibitors to ensure their deckscontinue looking good over time.Stain-resistant composites are alsoavailable, which is a strong sellingpoint for homeowners and commercialbuilding owners who frequently servefood and drinks on their decks.
– Brent Gwatney is v.p. of sales andmarketing for MoistureShield. He alsoserves on the board of the North AmericanDeck & Railing Association. For moreinfo, visit www.moistureshield.com or call(866) 729-2378.
CONCERNED WITH durability andmaintenance issues of wood deck-
ing in severe climates, many home-owners are asking their contractorsabout plastic decking and wood-plas-tic composites.
Although plastics avoid many ofthe problems of wood decking, marketresearch shows materials such as PVCfall short in looks. In contrast, com-posite manufacturers have made manystrides in expanding their products’visual appeal (see “A Closer Look”sidebar), making this category anideal combination of high perfor-mance and good looks.
A factor that could hinder somebuilders from selecting composites is aperception of problems with the mate-rials. Some early product formulationswere susceptible to premature deterio-ration, fading or staining. As a result,it is important for sales staff to under-stand the differences among moderncomposites and which type of productperforms best.
The first factor to consider is thedegree to which a composite’s woodfibers are safeguarded from moisture.Manufacturing processes vary.Composite decking that fully encasesthe wood fibers in plastic stands up
FULLY ENCAPSULATED WOOD FIBERS enable composite decking to perform well, even in appli-cations with direct water contact, such as near a swimming pool or outdoor spa.
All photos courtesy MoistureShield
Building-Products.com February 2013 The Merchant Magazine 15
Manufacturers have developedseveral ways to make wood-plasticcomposite decking and railing cap-ture the good looks of the all-wooddecking that consumers favor.Chief among these design featuresare texture and color.
Embossing can produce realis-tic-looking grain patterns. Therealism of embossed grains variesby brand, so it is important fordealers to have samples or displayson hand to show customers.
Advanced tinting can match theaesthetics of various wood species.Some composite decking manufac-turers add variegated color high-lights to mimic the look and pat-tern of wood species such as tiger-wood or walnut. Other huesinclude grays and earth tones, suchas sand and terracotta.
A Closer Look atthe Latest inComposites
NEWEST COMPOSITE decking fromMoistureShield offers advanced tinting in arange of colors, plus realistic woodgrain.
16 The Merchant Magazine February 2013 Building-Products.com
See the lightDeck lights improvemargins, close sales“ALTHOUGH I RESISTED the idea at first, deck lights
have become the most profitable thing that we doin our business,” says Doby Franklin, of Franklin & SonsDeckmasters, Tulsa, Ok.
Franklin resonates the discovery of other dealers whohave realized deck lighting’s ability to brighten margins.Deck lights add value, offer distinction on both verticaland horizontal places, and significantly increase the usetime of any outdoor living space.
Simple, effective and affordable low voltage installationtechniques have eliminated much of the fear factor. Forexample, Aurora Deck Lighting’s quick-connect plug andplay pigtail system makes it easy for the contractor or d-i-yer to complete most any project. A wide selection com-plements any size square post to fit almost any budget.Many offer compliance forIRC’s safe stair lighting require-ments.
Adding lights to an averagedeck will add approximately10% more revenue, but as muchas 20% of the profit. “Work less,make more. Lighting has trans-formed my business,” saysAlvin Smith, from HickoryDickory Decks, Bangor, Me.
Equally important is the abili-ty of deck lights to increase jobclosure rate. “We can’t get outof the neighborhood withoutlanding another job because ofdeck lighting,” tells BobLehman, from Creative VinylProducts, Baltimore, Md.
For contractors and dealersalike, differentiation is critical.The use of deck lighting showshomeowners a higher level ofprofessionalism in design andinstallation. Upselling with
lights provides a chance for the customer to beautify theiroutdoor living space. Custom sizes and style are all in therealm of possibility today. HighPoint Decklighting has theability to custom design or size any of their broad offeringsto complement the need for a larger wall mount or hangingfixture to match any of their smaller side mount, stair orpost top styles.
There is no limit for lighting opportunity, even when itcomes to everything wood. The Nantucket Post Cap Co.manufactures low voltage and solar all wood post caps in12 different styles and every size up to 20" square.Material choices range from redwood, cedar, mahogany,ipe and PVC.
Lighting begets lighting. A portfolio of your work isalso mission critical. The more photos of jobs with light-
ing, the more packages you willsell with lighting. This allenhances your chances of leav-ing a bigger smile on your cus-tomer, especially the femalecustomer who is proven to bemaking almost 80% of thosebuying decisions.
“Lights are selling our deckpackages. Lighting packages areone of the quickest and easiestways to take a deck from customto super custom,” says GeorgeDrummond, from Casa Decks,Viginia Beach, Va.
Fox Home Center startedselling deck lights in 1999. Thissuccessful Chicago-based build-ing material store’s displays aredecorated to the hilt with decklighting. Fox asserts that home-owners impulsively buy whenthey see lights. As many as 75%of their decks are sold withlighting.
MARGIN BuildersBy Geoff Hale, HomeTops
Building-Products.com February 2013 The Merchant Magazine 17
POSTS TOPS, such as this one from AuroraDeck Lighting, are an increasingly popular,margin-expanding add-on to deck sales.
Its deck lighting display hasachieved a handsome 49 times returnon investment. The store has alsobeen able to increase profit marginson standard sized decks by 35% usinglights. Even low-cost portable suit-case displays make a difference whenused by the contractor in the field.Aurora and HighPoint offer afford-able entry level fully functioning unitswith multiple styles, colors and func-tions, for as little as $125.
The successes for selling lightsfrom well-lit displays are well proven.Barron’s Lumber, Manassas, Va., hassold almost 300 lighting kits from amodest $99 countertop display. Thedouble benefit of a deck lighting dis-play is that light draws attention towhatever it’s affixed to, helping pro-mote post cover and railing sales aswell.
Deck lighting has candled a brightspot for business. Our lighting manu-facturers have increased sales by 80%
over the past five years in a troubledeconomy. This is driven by customerdemand and the increase in aware-ness, with more manufacturers nowoffering lights.
“These days, people are spendingmore time than ever before on theirterraces, decks and patios, and, sincethey’ve become an extension of thehouse, they need to be lit up,” saysKathy Held, from South DadeLighting, Miami, Fl.
More design options and morelighting alternatives will continue tofuel growth in this category. Qualityfixtures made of solid copper, brass,stainless steel, and bronze continue toraise the bar. The addition of new fin-ishes and new shapes will freshencustomer appeal year after year.
LED is showing the fastest growthin this category. The green monster is
garnering more sales month bymonth, with its benefits of low con-sumption, long life, and softer warmwhite presence. Electrical usage is cutby one-twelfth, providing a 92% sav-ings.
This less expensive bright spot isgaining ground. In 2010, LED decklighting sales overall were about 15%.In 2012, they have more than doubled
to 34%. By 2015, they are estimatedto be almost 100%. LED offers atriple bang for the buck, as often theupgrade is made affordable withgreatly reduced cost in transformerneed. You can now power an entiredeck with a $49 unit, when it used torequire a $250 low-volt transformer tofunction similar light output.
LED options are endless and willcontinue to propel post top, recessed,strip light, lighted baluster, and paverlight sales. Innovative installationtools are already here to greatlyreduce contractor labor time and pro-duce crisp, crystal clean installs.
Deck lighting will continue toincrease in usage as more and morecontractors try to differentiate them-selves from the competition. And asmore and more dealers realize thebenefits of displaying lights to growtheir sales, LED will continue to fuelinterest and acceptance. The propectsfor a bright future are beaming ondeck lighting.
– With over 45 years in the buildingproducts industry, Geoff Hale is presidentof deck accessory supplier HomeTops,Whitewater, Wi. Reach him [email protected].
18 The Merchant Magazine February 2013 Building-Products.com
PRODUCT SpotlightEovations Composite Technology
New composite technologypromises improved buildingproducts for the futureEOVATIONS LLC, Bay City, Mi., has patented a new
composite material that can replace wood, wood-plas-tic composite, plastic, and metal. Now, the company wantsto license the technology for use in a wide range of struc-tural and non-structural applications.
“The possibilities created by Eovations technologyextend significantly beyond traditional applications forwood and wood-plastic composites,” says Dick McBride,general manager of lead investor Universal ForestProducts, Grand Rapids, Mi. “This remarkable lineal mate-rial can be used almost anywhere a lighter, stronger,longer-lasting material is needed.”
Building materials that can be produced usingEovations technology include decking, railings, porchplanks, deck substructures, roofing, exterior trim, siding,soffits, door frames and jambs, window components, PVClineal reinforcements, porch and patio enclosures, decora-tive flooring, and flexible concrete forms.
The new technology uses a proprietary extrusion/draw-ing process to combine mineral particles with a thermo-plastic matrix, creating a fully fibrous and molecularly ori-
ented lineal composite system. The appearance of the fin-ished material can be customized with color and a varietyof surface textures.
“The resulting material equals and, in some cases,improves upon the physical strength, dimensional stability,environmental durability, aesthetics, and workability prop-erties of wood, while overcoming the strength and otherlimitations of wood-plastic composites,” says ClaudeBrown, vice president of technology & innovation atEovations.
In addition, the “material can be machined, milled, cutand drilled using basic carpentry skills and common wood-working tools,” says Brown. “Fastener acceptance andhold is excellent using conventional nails, screws and sta-ples. Variations of the composite readily accept commonpaints, allowing durable, attractive finishes to be appliedduring product manufacturing or in the field.”
Licensees choosing the application model obtain the useof composite material produced by Eovations. The produc-tion-licensing model enables licensees to utilize Eovations’process technology in their own operations, to producecomposite material independently. Licensing under bothmodels is for pre-defined applications.
NEW COMPOSITE can be produced in a wide range of textures and col-ors to meet specific appearance and use needs. (Photos by Eovations)
NEW TECHNOLOGY promises to replace wood and composites in avariety of building applications, such as decking and railing.
The true strength of a genuine Simpson Strong-Tie® connector doesn’t
come from the steel or the fasteners. It comes from the rock-solid
reputation and expertise of the company behind it. Don’t settle for
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20 The Merchant Magazine February 2013 Building-Products.com
Midwest dealercharts new course
DO IT BEST-prodded reconfiguration of Wisconsin dealer moved theservice counter to the back of the store, tools to the middle, and dollaritems to the front.
kick it up, or stick with the core business and get out?—“We decided to do what we do best and do it even better,rather than fractionalize and lose our core focus,” Dennisrelates. Just in time, turns out. Moments later, the construc-tion-busting recession hit. As happened everywhere, thepicture became bleak.
“After what had been a manic euphoria, the last coupleof years have been the most challenging in my memory,”Dennis notes about the downturn—then continues on hismission to combat it
So, how to cope with the freefall? Retrain your staff,reevaluate your product mix and margins, realign yourstore, expand your retail space, and reach out for a newniche of customers—factors Dennis thinks about 24/7 any-way, even in his sleep. “If you do things the same old way,you’ll keep getting the same old results,” he knows.
But costly improvements weren’t in the books, either,as he kept insisting to the folks at Do it Best, who offeredcounsel. Changes had to deliver a bang for the buck, andfor not that many bucks indeed—a big ROI for a verymodest investment of capital. “Things we could afford, ona smaller customer base. We’re not Madison; we’re notChicago,” he does a reality check on the town’s demo-graphics.
Dennis sized up his competitors. Never mind that hiswas the sole lumberyard in town, there were Menards andHome Depot 20 minutes distant. But that’s not where heturned his gaze. Competition, this marketing master under-stands, consists of every outlet siphoning shoppers’ dispos-able income—groceries, restaurants, phone stores, whathave you. “We didn’t want to be the coolest lumberyard;we wanted to be the coolest store—the best shopping expe-rience,” he’s most emphatic. “We had to fight for everydollar we got. For instance, we used to carry two types ofgloves; now, it’s 30. We looked where our employees andour family members shopped—for clothes, cars, electron-ics, and on the Internet.”
And that propelled improving…well, everything: mar-gins, sales and, most of all, the total customer experience.
To jumpstart improvements, Dennis asked around:What can we do better? Differently? Easier? “It scared thehell out of me, to be honest, but I realized there were twothings necessary—to get more information to our cus-tomers, via a website, and to get more PK training to ouremployees, which was challenging for us.”
COMPETITIVE IntelligenceBy Carla Waldemar
DENNIS DORN IS CUTTING BACK on life’s more fleetingpleasures—like golf—in order to devote himself
110% to his all-consuming passion. It’s, ahem, his store.“I love being a merchant!” sings the c.e.o. of Portage
Lumber, Portage, Wi., which Dennis co-owns with hisbrother. “I love fussing with margins, looking at products.Whenever I go grocery shopping with my wife, she’s look-ing at the produce while I’m looking at displays.”
And, like the golfer he recently was, he’s constantlyworking on improving his game. He’s reexamined thecompany culture, re-aligned the store, and rethought hisconsumer base, which he recently shifted from almostexclusively pros to serving retail consumers as well.
Not a minute too soon. The brothers bought the yardfrom their father, an agreement enacted when Dennis was35 and completed, he jubilates, on the eve of his fiftiethbirthday (he’s now 62). Their father, still chipper at 87, hadbeen hired in 1953 to run the start-up yard as a 28-year-oldlad with an eighth-grade education and two little boys tosupport. Nonetheless, he held out for part-ownership, andto seal the deal, plunked down $10,000 he’d astutely man-aged to save up.
Soon after, in answer to popular demand, a constructiondivision was launched. Faced with a choice not long ago—
Building-Products.com February 2013 The Merchant Magazine 21
GROUPING and better positioning of design departments increasedsales of floorcoverings, paint and other products.
An inspiration arrived, out of the blue—or rather, out ofan email. Black & Decker alerted him to a clever new gyrowrench. Amazed, he walked around with his iPhone, show-ing its possibilities to his 28 employees—voilá: no needfor a special conference room and time off from work forproduct training.
“Training consists of two parts,” he instructs: “culturaland anecdotal. And we’re working on it. For instance, likeWalgreen’s pushes candy bars at the register, we recentlyput in ice scrapers and trained the cashiers in suggestivesell—to ask customers if they cared to purchase one. Theyear before we started that, we sold nine. This year, in justone week, we sold 32—and that’s without any snow so far!It’s a little thing, but it adds to the bottom line. “
“It’s our job to train staff to do that,” he emphasizes: “totrain cashiers to be salespeople.” He instructs them, ingoing beyond their basic job description, to spot customerswho need help. As a carrot, he makes it part of their com-pensation. “To a base of $10/hour, they can earn 5% of themargin, which can add $3 an hour to their salary—or, dou-ble it, if they’re good. It’s now a different culture; youdon’t just show up, you take care of our customers and arealways looking for the next sale. Let customers knowthey’re special, and they’ll keep you top of mind. That’sthe part of the culture we need to work on,” he remindshimself, and us.
Dennis isn’t shy about asking for a sale, himself, either.At a party recently he ran into Susan, an acquaintance whomentioned she was thinking of remodeling her kitchen.“We’d love to talk with you,” said Dennis—who ended upwith the $134,000 account. In gratitude—or call it ‘pay itforward’, he sent her a $350 set of knives she’d been cov-eting as a thank-you gift. The next year, Susan bought alake home and called to schedule another kitchen job—another $100,000 in the company’s pocket.
Dennis knows it’s smart to solicit ideas from those whohave their customers’ voices tuned in—no, not managers:the cashiers. These key people suggested ways to speed upand simplify procedures, such as credit-card transactions.They reported unstocked items customers had been askingfor.
He’s also rethought the practice of a Christmas bonus—noting that some employees don’t celebrate the holiday—and made it instead an annual bonus, given out during a
performance evaluation on the anniversary of hire, $20 foreach year of service. And for Christmas, employees will beinvited to a party wherein they can shop the store at costthat night. “The cost for the company is minimal, but it’sseen as a huge gesture by our employees,” Dennisexplains.
Another “free” improvement: Two years ago, Portagehad added an 8-foot display of $1 items positioned, asDennis says, “in a low-rent part of the store, the weakestlocation. We offered tape measures for $1, and sold 19.Last year, I moved them to a drop box up in front to seewhat would happen. We sold 628. We did it again this yearand sold nearly 1,000.”
A small sales improvement like this not only increaseprofits, but, as Dennis explains, “help create a value state-ment that fights the ‘expensive’ image of an independentstore—all with one goofy, little product.”
Another huge improvement that didn’t require a bankloan was Do it Best’s suggestion of realigning existingspace to get the biggest effect for the least amount ofmoney. “We had a contractor sales area, a rental area, anda retail space, but were staffing too many people becauseof layout. Now, the service counter has been moved fromthe front of the store to the back so the nearby departmentscould be manned by fewer personnel.”
Yet another move that paid off was changing the posi-tioning of tools that proved too close to the front of thestore. “We’ve grown the section substantially, but alsomoved it halfway back so it gives a good visual impressionas your eyes move through the store—it looks moreimpressive.”
So do the flooring, K&B and paint departments nowa-days. “They used to be tucked into corners, but they’renow up front, and adjacent. In fact, one customer compli-mented us on adding floor coverings to our offerings.(We’d been selling them for 35 years but she’d nevernoticed them before the move.) We’d had the big-ticketitems tucked away in the back—but not anymore!” he’slearned.
Just in time… because contractor sales had dropped offsignificantly. “Now, they’re starting to pick up again, butall margins are tight. So, the new concentration on retailwas very important to offset that with a 5% to 7% marginincrease.”
After September’s soft re-opening, which has driven anice increase in sales, “People are congratulating me, say-ing ‘You’ve got it all figured out.’ But I don’t have all theanswers,” he says. “There are lots of questions, lots ofchallenges left –but also, so many opportunities. But I lovedoing it! As a wise person once said, ‘No matter what themission, the journey should be joy-ful.’” That’s Dennis’s mantra, too.“I love a party. But,” he can’t helpunderscoring, “bottom line: It’s abusiness.”
Sounds like, for this man,they’re one and the same. So, whoneeds golf, anyway, whenyou’re having this much fun?
22 The Merchant Magazine February 2013 Building-Products.com
business.Many sellers send “I’m just here
for the order” messages and wonderwhy they are treated poorly. Theopposite is also be true. Many sellersare trying to be so congenial—what-ever you say, Mr. Customer!—thatthey send the message that they don’twant the business. They confuse unc-tuousness with being a partner.
Account DevelopmentProgression
• They take our call.• They give us some time on each call.• They sporadically buy.• They buy on a regular basis, making us a secondary or
tertiary supplier.• We become their #1 supplier.In terms of business development, we have to become
the secondary or tertiary supplier with many and continuequality work until we become the main supplier to a fewmore. This is the beginning of many great sales careers—secondary supplier to many.
It takes time to become a number one supplier with any-one. What does that mean to us building sales careers? Itmeans that while we are building our business, every call isbeing judged and measured by our account base—evenwhen they don’t buy.
Want Don’t NeedEvery time we contact a customer we send a message to
them and ourselves. Our potential customers and our ownpsyche are listening to every word.
The best message for us as sellers is, “I want your busi-ness, but I don’t need your business.”We want to be confident withoutbeing arrogant. We cannot appearneedy—customers and otherhumans run from the needy—theymake us feel uncomfortable.
“I don’t need your order. I’vegot plenty of orders (again,without being arrogant).”
Message: “What I need aremore partners. Do you want tobe my partner?”
THE SELLER WHO makes $50K ayear looks at the seller making
$200K a year and says, “That guy isa machine! I wish I had his accountbase and his gift of gab… I’d bekilling it… I guess I’ll never be anatural…. I hope I get lucky and getsome big accounts… (like him).”
This logic is flawed. The $50Ksalesperson calls 100 people and gets98 no’s. The $200K seller calls 100people and gets 92 no’s. Both are inthe “high-rejection” business, but themaster seller is getting four times as many yes’s as his lessremunerated competitor. It just seems to the struggling sell-er that life at a higher income is easier.
It’s not easier. The master seller is in the 92% rejectionbusiness! The master seller receives more no’s than thejourneyman seller because he asks for the order more. Hehas a higher quality of failure.
Every Call Is a Marketing CallThink about your last (major) purchase. How many
times had you seen that car, golf club, or cruise advertisedbefore you made the decision to buy?
Advertisers say we have to see an ad seven times beforeit makes an impression on our brains. Fifty percent of sales-people call back once (which means 50% don’t even callback!). Twenty-five percent call back twice. Only 10% callback more than twice! Per the rules of advertising, only10% of salespeople call enough to make an impression onnew customers. (How many call seven times?)
Every call we make is a marketing call. Within thosemarketing calls there will be sales calls, but every call wemake sends a message to our customers and our industryabout who we are. For example:
Seller: “I’ve got a great deal on a block of studs. Theyare selling well. We had 20 and we are down to 10. Howmany would you like?
Customer: “I don’t need any right now; I’m full up.”Seller: “What are you buying?”Message: I’m here for the order.
Seller: “I’ve got a good deal on studs… etc.”Customer: “I don’t need any right now… etc.”Seller: “What is your current stud position? How are
sales on studs? What is your average cost on studs? Whenwill you be buying back in? What’s the best you’ve seen onstuds in the last week?”
This seller asks detailed questions about the customer’sbusiness. Message: I am your partner. I am not (just) hereto sell you something. I want to get to know you and your
The quality of our failure
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24 The Merchant Magazine February 2013 Building-Products.com
THIS IS AN INTERESTING time to be in this business. Infact, I would submit there has never been a more inter-
esting time because, not only are conditions changing, butchange is coming at us from about every possible angle.
But if there’s one thing we can count on, it’s that themarch toward greener buildings, technologies, products,and materials continues unabated. There are signs that thehousing market is picking up, generally, and more thanlikely the uptick in green will be significantly greater. Thisis good news for green retailers.
Is your company on board yet? Has the greening of allthings housing related boosted your bottom line? If not,fear not. It’s not too late to get positioned to profit fromthis trend, but it will require change. It’s easy, if you take itstep by step.
Step One: Educate yourself and your staff, from theboardroom to the backroom, floor associate, buyers, prosales, cashiers. Learn the language of green and, mostimportantly, the requirements of your customers. Servingbuilders and remodelers? Get up to speed with LEED andother certification schemes. Some products and materialsmeet green standards because of their characteristics, theircomponents, their functionality, or simply by the waythey’re used in a green building project. Proven fact:Educated staff sells more green products and materials.
Step Two: Stock green products and materials. Youcan’t sell what you don’t have in the warehouse or in thecatalog. What are your customers looking for? What worksin your region? Again, ask your customers and getacquainted with your local USGBC chapter. Product certi-fications provide a good guide and attending at least oneGreenBuild event will get your buyers on the way. Butyour customers will tell you where their interests lie.Serve them well and you can’t miss.
Step Three: Communicate. In the store and in theyard, take the basic step of deploying shelf talkers, labels,posters, hang tags—whatever you need to do to identify foryour customers the green options in every category, theirfeatures and benefits.
If you’re using circulars, be sure to promote these prod-
GREEN RetailingBy Jay Tompt
ucts and materials, display their certifications, and writecopy that educates and establishes your credibility. If youhave a more robust marketing budget, develop clear andhonest advertising that positions your store as the place togo for sustainable, energy efficient, water saving, lesstoxic, LEED credit-earning products and materials.
Finally, if you have the wherewithal, write news releas-es about your newsworthy green developments and distrib-ute to the publications your customers might be reading,both online and offline.
Step Four: Educate your customers. If you’ve gottento this step, chances are your customers are beginning tolook to you as a source of knowledge and expertise.Hosting product knowledge events and skills workshopswill strengthen your customer relationships and cementyour growing reputation as the green “go-to” source. Thesekinds of activities, whether conducted in-house or else-where in your community, should tie in nicely with yourmarketing efforts.
Grasping the green building opportunity takes somehonest effort and success is not guaranteed. It’s a free andcompetitive market, after all. On the other hand, sittingpassively on the sideline pining forthe old days is not an attractiveoption. Embracing green build-ing as the new normal can infuseyour organisation with a sense ofpurpose that can translate into abetter experience for your cus-tomers and perhaps a few moresales at the end of the day.All you need to do is starttaking it step by step.
26 The Merchant Magazine February 2013 Building-Products.com
DEALER BriefsDunn Lumber, Seattle, Wa., has
acquired Parker Lumber, Bothell,Wa., as its 12th location, renaming itParker Lumber East.
Big Creek Lumber, Davenport,Ca., this month is installing new salessoftware at i ts f ive retail stores inCentral California.
Jarms True Value Hardware,Cheney, Wa., is relocating after 35years to a larger, 22,000-sq. ft. facility.
Franklin’s Ace Hardware,Scottsdale, Az., has been opened byBrett Franklin in a storefront that previ-ously housed an Ace Hardware thatclosed last year.
Construction Supply LLC,Goodyear, Az., has added an adjacent6,000-sq. ft. rebar fabrication facility—the first phase of a manufacturing sitethat eventually will expand to 10 acres.
BMC , Boise, Id., has selectedOrgill as its new hardlines supplier,replacing True Value.
In addition, BMC was named 2012Company of the Year by the EasternIdaho Home Builders Association andVendor of the Year by the nonprofitHomes for Hope.
Bridgetown Window &Door , Portland, Or., has beenlaunched by Kevin Betker, JeremyPowers, and Andrew Haslam.
Cooley Forest Products parentCooley Industries, Phoenix, Az., hasfiled to liquidate under Chapter 7bankruptcy protection.
Launched in 1945 as CooleyWholesale Lumber, Holbrook, Az.,the company also operated DynamicTransload Services and DynamicLogistics.
Its Dec. 27 bankruptcy filing listsassets of nearly $3.5 million and lia-bilities of almost $9.9 million.
Pacific Lumber Consolidates Pacific Lumber & Truss is relocat-
ing its headquarters from Hillsboro,Or., to consolidate with its millworkplant in Lake Oswego, Or.
The move transfers 25 positions toLake Oswego, including manage-ment, administrative, sales and logis-tics.
“Having all divisions workingtogether is a big step for us,” saidpresident Jim Morse.
As part of the move, PacificLumber has also opened a new designand retail center at the Lake Oswegosite, with a grand opening set forMarch.
Century-Old Yancey YardChanges Hands
Yancey Lumber has sold its 103-year-old facility in Patterson, Ca., butwill continue operating its yard inNewman, Ca.
New owner Ramon ZavalaRamirez has renamed the yardPatterson Lumber, but retained most
of the staff, including manager HarryFelix.
The previous owners—KernHunewill and seven members of theYancey family—had considered clos-ing the yard and converting it into awarehouse, but Felix helped broker adeal with Ramirez, an agribusinessforeman who owns rental propertiesmanaged by Felix.
“I couldn’t see this city goingwithout a lumberyard,” Felix said.
Yancey co-owner Tom Yanceysaid, “We had a hard time keepingthat yard going, so it seemed the bestthing to do would be to focus onNewman.”
Boise Cascade Begins IPOBoise Cascade LLC, Boise, Id., has
begun an underwritten initial publicoffering of 11,764,706 shares, to besold by prospectus only.
The company will be converted toa corporation and renamed BoiseCascade Co.
It has also been approved to list itscommon stock on the New YorkStock Exchange, under the symbol“BCC.”
OSH Sues Home Depot OverExclusive Hardware Deals
Orchard Supply Hardware, SanJose, Ca., has filed suit against HomeDepot, alleging that the Atlanta, Ga.-based chain has struck exclusive,unfair deals with several hardwaresuppliers.
OSH claims Home Depotannounced in June 2012 that it aimedto become the only “on-the-ground
retailer” for certain hardware prod-ucts. Within weeks, according toOSH, two of its longtime power toolsuppliers—Makita USA andMilwaukee Electric Tool Corp.—cutof shipments. Both suppliers arenamed in the suit.
OSH alleges the exclusive dealswill cost it $2 million.
Home Depot maintains that it iscommitted to fair competition.
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SUPPLIER BriefsCalifornia Redwood Co. eliminated the 45-worker
“flex crew” at its Korbel, Ca., mill Jan. 17.
Mount Storm Forest Products, Windsor, Ca., is nowdistributing Thermory thermally modified hardwood decking.
Rugby Architectural Building Products is nowdistributing Samsung Staron solid-surfaces throughout theNorthwest U.S., including Alaska, from its five branches in theregion—Seattle and Spokane, Wa.; Portland, Or.; Boise, Id.,and Salt Lake City, Ut.
O’Connor & Associates, Carpentersville, Il., is nowrepresenting Integrity Composites’ DuraLife deckingand railing products in the Midwest and into Colorado, NewMexico, and Arizona.
Jeld-Wen, Klamath Falls, Or., has received EvaluationReport ESR-3043 from the ICC-S for its MiraTEC treated exteri-or composite trim—a first for wood composite trim.
Beacon Roofing Supply, Peabody, Ma., has enteredNorthern California with its acquisitions of roofing distributorsFord Wholesale Co., Oakland, Sacramento and San Jose,Ca., and Construction Materials Supply, Livermoreand Sacramento, Ca.
Ford’s former president, Jim Ornellas, and CMS’, PeterClark, will stay on under Beacon.
Sylvan Products, Portland, Or., was awarded a sec-ond option year to supply dimensional lumber to the U. S.Defense Department.
Columbia Forest Products, Greensboro, N.C., wasnamed 2012 Vendor of the Year by Phillips PlywoodCo., Pacoima, Ca.
Weyerhaeuser Co., Federal Way, Wa., has revampedits wood products website at www.woodbywy.com.
Spruce Computer Systems has incorporated newfeatures into its SpruceWare.NET Release 8, to help dealersin California cope with the state’s new 1% lumber products tax.
FIBERON’S redesigned website (www.fiberondecking.com) featuresa new DIY Deck Connect design tool that allows consumers to take aphoto of their home and then access a complete portfolio of productsto design a virtual, realistic-looking deck.
See us at FenceTech Feb 25th — March 1st 2013 Booth #1245
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30 The Merchant Magazine February 2013 Building-Products.com
Blaze Levels Colorado SawmillAlpine Lumber’s La Jara, Co., sawmill was destroyed in
a 3 a.m. fire Jan. 5.Owner Mike Hostetter intends to rebuild as quickly as
possible. “We are doing our best to keep serving our cus-tomers and keep them supplied by outsourcing from othermills,” he said.
Although the cause is under investigation, Hostettersaid there was no sign of arson and speculated that theblaze may have been sparked by an electrical malfunctionbrought on by recent cold weather conditions.
Plywood Producers FaceChallenges Meeting Global Demand
International plywood demand is expected to top 85million cubic meters by 2018, owing to emerging marketsacross Asia, Latin America, and Europe, according to anew Global Industry Analysts study.
Consumption is largely dependent on the state of theconstruction industry, which has experienced sluggishgrowth in developed countries over the last several years.
Asia-Pacific, the U.S., and Europe account for a lion’sshare of total global plywood consumption.
China dominates the global market for plywood usage,consuming more than half of all plywood used in the Asia-Pacific region. The nation has evolved quickly over thepast decade from an industry largely focused on addressingdomestic market needs to one increasingly catering toglobal demand. China is currently the world’s largest pro-ducer and exporter of plywood. The nation is, however,garnering mixed results in domestic demand, with the non-
residential and social housing sector growing at a healthypace, but housing reeling under severe pressure due to gov-ernment policies and the resulting deceleration in housingsales, economic disparities, and minimal constructionactivity.
Asia-Pacific markets, excluding China, should post thefastest growth through 2018. In Japan, demand for woodproducts is expected to increase, as the country begins torebuild earthquake-devastated areas. However, the delay inreconstruction work, owing to the longer time taken toclear debris and the resulting build-up of plywood invento-ries, will moderate the pace of growth in the years to come.
In the U.S., after-effects of the recent economic crisiscontinue to linger over the construction industry, despitethe numerous initiatives undertaken by the government toassist the recovery of the sector. Although the plywoodsector witnessed a marginal recovery in demand in 2011,future growth in the market primarily relies on the recov-ery of the housing sector, which is poised to readily absorbcurtailed as well as new capacity.
In Europe, the escalating macroeconomic uncertaintycontinues to dampen business confidence, thereby delayingthe pace of recovery across the construction sector. Theregion also faces increasing threat from rising imports ofcheaper plywood products, particularly from China,Russia, Uruguay and Ukraine.
Besides restricted construction spending, another chal-lenge faced by the plywood market is increasing competi-tion from alternate materials such as OSB and MDF.However, plywood remains a preferred option for variousapplications due to its quality.
32 The Merchant Magazine February 2013 Building-Products.com
Customers on the go can nowquickly and easily locate dealers carry-ing Simpson Strong-Tie products—aswell as identify which SST product lineseach dealer stocks.
Using the mobile app, customerscan get instant results for dealers with-in a specific zip code, and can map to alocation in seconds.
They also can visit dealer websites,instantly copy store information to theclipboard, and dial a dealer’s phonenumber directly from the iPhone.
Download from the Apple App Store orfrom www.strongtie.com/mobiledl
U.S. demand for decking is grow-ing only 2.4% annually, but demandfor wood-plastic composite and plas-tic lumber versions will grow at dou-ble-digit rates, according to a newFreedonia Group study.
Wood decking will remain themarket leader, accounting for 2.73billion linear ft. by 2016, out of a totalU.S. market of 3.3 billion linear ft.But wood decking demand will growonly 0.9% annually between 2011 and2016.
Plastic decking will see the mostrapid growth, thanks in part to theavailability of cellular PVC deckingthat better resembles natural wood.Plastic decking demand will grow15.2% per year, reaching 150 millionlineal ft. by 2016.
Wood-plastic composite deckingwill grow 11.4% annually, reaching420 million lineal ft. by 2016.
The residential market consumed61% of decking in 2011, a lowershare than the historical average. The
depressed level of housing comple-tions suppressed demand, as did anunfavorable lending environment thatmade it more difficult for homeown-ers to take out home equity loans, acommon method of funding such pro-jects as deck installation and replace-ment.
Going forward, residential deckingdemand is forecast to rise at thefastest pace of all markets. An expect-ed rebound in housing completionswill spur gains in the new residentialsegment, while more flexible creditconditions should support upgradesand repairs.
Plastic, WPCs to Lead Comeback in Decking
34 The Merchant Magazine February 2013 Building-Products.com
OSH Going Urban in L.A. Orchard Supply Hardware will
close its Hollywood, Ca., store earlythis year and begin construction thisspring on an urban-format location onnearby La Brea in Los Angeles, Ca.
The new store will feature a slight-ly smaller footprint of 30,080 sq. ft. ofindoor selling space, 3,800 sq. ft. ofoutdoor nursery and garden space,rooftop parking, and a product mixtailored to the local area—withgreater emphasis on small gardenplantings, paint, patios/BBQs, repair,
and home maitenance.“We’re excited to bring our neigh-
borhood store format to those wholive and work in the Mid-Wilshirearea of Los Angeles, while continuingto serve Orchard’s existingHollywood store customers in a sig-nificantly enhanced shopping envi-ronment,” said president and c.e.o.Mark Baker.
OSH is also planning to add anurban store in San Francisco, Ca., latethis year.
APA, WCLIB Pick Up for AITC The American Institute of Timber
Construction is dissolving after 60years, moving its glulam certificationoperations to the West Coast LumberInspection Bureau and transferring itsthree American National Standards toAPA–The Engineered WoodAssociation.
WCLIB absorbed staff members ofthe AITC inspection bureau andbegan certifying glulam for AITCproducers Jan. 1. It will also continueusing the AITC quality mark.
APA is now managing ANSIA190.1 (for Wood Products,Structural Glued Laminated Timber),ANSI 405 – 2008 (for Adhesives foruse in Structural Glued LaminatedTimber), and ANSI 117 (forStructural Glued Laminated Timberof Softwood Species).
“APA has had a good workingrelationship with AITC for manyyears. We’re pleased to take theresponsibility for these standards,which are vital to the glulam indus-try,” said APA president DennisHardman. “We’re taking steps toensure a smooth transition of the stan-dards committee and to provide unin-terrupted support to the industry withup-to-date product standards anddesign specifications.”
Rayonier Selling WoodProducts Unit to Interfor
Rayonier, Jacksonville, Fl., hasagreed to sell the assets of its WoodProducts business to InternationalForest Products, Vancouver, B.C., for$80 million.
The unit, based in Baxley, Ga.,consists of three lumber mills locatedin Baxley, Swainsboro and Eatonton.As part of the deal, expected to closein the first quarter, Interfor agreed tohire all 260 current Wood Productsemployees.
“This sale represents another keymove in our strategy to fully positionour manufacturing operations in thespecialty chemicals sector,” said PaulBoynton, Rayonier chairman, presi-dent and c.e.o. “We are delighted withthis opportunity to transition ourWood Products operations to a world-class company focused on lumber andwood products manufacturing.Rayonier has enjoyed a long associa-tion with Interfor, supplying theirlumber business in the PacificNorthwest for many years, and welook forward to expanding that rela-tionship into the Southeast.”
Building-Products.com February 2013 The Merchant Magazine 35
36 The Merchant Magazine February 2013 Building-Products.com
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Mountain States Lumber &Building Material Dealers Associa-tion has adopted the theme “JustKeep Swingin’” for its annualProducts Expo March 7-8 at theDenver Merchandise Mart, Denver,Co.
West Coast Lumber & BuildingMaterial Association is organizinggolf tournaments for SouthernCalifornia and for NorthernCalifornia. The first takes place April11 at Black Gold Golf Club, YorbaLinda, followed by the associates/dealers tourney June 13 at RanchoSolano Golf Course, Fairfield.
National Lumber & BuildingMaterial Dealers Association willhold its annual spring meeting andlegislative conference March 18-20 at
the Crystal City Marriott, Arlington,Va.
Political analyst William Kristol, aFox News contributor and editor ofThe Weekly Standard, will speak atthe LuDPAC fundraising luncheon.
In addition to association commit-tee and board meetings, Capitol Hillappointments will be set up by localfederated associations between NLB-MDA members and legislators andkey federal agency officials to discussthe industry’s policy priorities inWashington. The conference will cul-minate with a reception for membersof Congress and their staff on CapitolHill.
Once again, the conference willtake place jointly with the Window &Door Manufacturers Association,providing a wealth of networkingopportunities.
Western Wood PreserversInstitute is gathering for its wintermeeting Feb. 28-March 3 at theEmbassy Suites Downtown, Portland,Or.
International Wood ProductsAssociation will kick off its April 17-19 convention at Westin Bayshore,Vancouver, B.C., with a golf tourna-ment.
Other events are an awards pro-gram and past president’s luncheon,appreciation lunch, and a closing ban-quet and dinner cruise.
Hardwood Manufacturers Asso-ciation will gather March 11-13 atCharleston Place Hotel, Charleston,S.C., for its national conference andexpo.
On March 11 at the same location,Southern Cypress ManufacturersAssociation will convene its annualmeeting.
National Hardwood LumberAssociation has drafted former DallasCowboys quarterback Roger Staubachto keynote its annual convention andexhibit showcase Oct. 2-4 at the OmniFort Worth Hotel, Fort Worth, Tx.
Structural Insulated PanelAssociation has scheduled its annualmeeting and conference for April 2-5at Loews Ventana Canyon Resort,Tuscon, Az.
American Wood ProtectionAssociation will hold its 109th annualmeeting April 28-May 1 at theSheraton Waikiki, Honolulu, Hi.
Activities include a supplier’sshowcase, Hacker’s Classic golf tour-nament at the Turtle Bay Golf Club,and Pickler’s Prance 5K Fun Run/Walk.
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38 The Merchant Magazine February 2013 Building-Products.com
MOVERS & Shakers Dale Miles, ex-Viking Door &Window, is new to sales at OrepacBuilding Products, Sacramento, Ca.
Marc Marcoux, ex-Keymark Enter-prises, is now a product mgr. withSimpson Strong-Tie, Denver, Co.
Ian Griffin is new to outside sales atPacific Coast Building Products,Phoenix, Az.
Chris Breslin has joined GalleherInc., Santa Fe Springs, Ca., asnational sales director for MonarchPlank.
Krista Roschek has been namedwestern regional mgr.-BMD salesat Solatube International, Vista, Ca.
Robert Goin, ex-MJB Wood Group,has joined Valspar’s WoodCoatings Group as technical salesrep for Northern California.
Dan Ford, Henry Co., has been pro-moted to West region v.p.-buildingenvelope systems.
Lyle Shimazu, ex-Trulite Glass, is thenew operations mgr. for Custom-Bilt Metals, Honolulu, Hi.
Missy Williams has rejoined SpenardBuilders Supply, Lakewood, Wa.,as a logistic analyst.
Lee Martucci has joined GAF,Wayne, N.J., as a Denver, Co.-based product mgr.
executive of wood products for par-ent Atlas Holdings, Greenwich, Ct.Former Wood Resources chiefRichard Yarbrough is now chair-man, replacing William Corbin,who remains on the board as chair-man of the executive committee.
Patrick Towle, ex-Guardian BuildingProducts Distribution, is new tosales at Weyerhaeuser, Phoenix,Az.
Dennis Myrick, ex-Grainger, is nowstore mgr. at Hills Flat Lumber,Grass Valley, Ca.
Mike Parr and Preston Johnson arenew traders at Patrick Lumber Co.,Portland, Or.
Martin Jaramillo, ex-EvolutionWindow & Door, is new to window& door sales at Bruce Bauer Lum-ber & Supply, Mountain View, Ca.
Edward Bosco is a new market salesspecialist at White Cap Construc-tion Supply, Temecula, Ca.
Harmon Meeker is now productionsupervisor at Milgard Windows &Doors, Tacoma, Wa. ChrisFawkes is production supervisor inSimi Valley, Ca.
Roy Bonham retired from Coos HeadForest Products, Coos Bay, Or.,Jan. 31 after 43 years in the indus-try, the last 27 with Coos Head.
Ralph Panttaja has been named gen-eral mgr. of Golden State Lumber,Stockton, Ca. Danny Della-Santina succceeds him as generalmgr. in San Rafael, Ca.
Kurt Nelson, ex-Tumac Lumber, isnow sales & inventory mgr. forcedar & Douglas fir at Nu ForestProducts, Healdsburg, Ca.
Dennis Olsen has joined CentralValley Builders Supply, St. Helena,Ca., as product line marketing mgr.
Steve Hoehne, ex-S-5 Metal RoofInnovations, has rejoined BMC,Colorado Springs, Co., as Coloradomarket EWP operations mgr.
Donald “Scott” Church, ex-ConradForest Products, has joined thesales team at Redwood Empire,Morgan Hill, Ca.
Kurt Liebich, president and c.e.o.,RedBuilt, Boise, Id., has added theduties of president and c.e.o. of sis-ter company Wood ResourcesLLC, Olympia, Wa., and group
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Jim Reininger has joined Do it BestCorp., as Bozeman, Mt.-based terri-tory mgr. for Montana and Wyo-ming. Josh McLaughlin is territo-ry mgr. in Albuquerque, N.M.Brian Christophel is new in FortWayne, In., as assistant merchan-dise mgr.-global sourcing.
Tom Anderson has been appointed tothe board of BlueTarp Financial,Portland, Me. Will Porter is nowchief financial officer.
Michelle Kam-Biron, ex-Wood-Works, has been named director ofeducation for the American WoodCouncil.
Monique Hanis has joined theSustainable Forestry Initiative,Washington, D.C., as chief operat-ing officer and v.p. of marketing &communications.
Christopher Cysensky, BMC,Tacoma, Wa., was recognized asthe 88-unit chain’s PlatinumSalesman of the Year.
Hiram Cheep is now corporaterecruiter for Mungus-Fungus ForestProducts, Climax, Nv., according toco-owners Hugh Mungus andFreddy Fungus.
Lumber Wholesalers Poisedto Emerge from Darkness
The wholesale lumber industry isturning the corner, following morethan five years of declines, accordingto a new forecast by IBISWorld.
“Residential construction is thelargest source of demand for lumberwholesalers,” says IBISWorld analystSean Windle. “Therefore, with the col-lapse of the housing bubble in 2007and subsequent recession, demand forindustry products fell significantly.”
From 2008 to 2013, lumber whole-salers’ revenue fell an average of 2.0%per year to $83.5 billion. But, buoyedby recent renewed growth in housing,revenue is expected to rise 7.5% in2013.
Profit margins for the average lum-ber wholesaler have remained stag-nant, although profitability shouldexperience an uptick in 2013, thanksto strong demand and strong growth inlumber prices. “Falling profit marginsand fewer sales forced some operatorsto exit the lumber wholesaling indus-try,” Windle says.
IBISWorld estimates the number ofwholesale lumber businesses in theU.S. declined 0.5% annually over thelast five years to 5,895 in 2013.Employment also fell, an average2.9% per year to 118,911 workers.
40 The Merchant Magazine February 2013 Building-Products.com
Is it hypocritical tohate telemarketers?IN THE SAME WAY I rubberneck while passing car wrecks,
I’m strangely fascinated by horrible telemarketing calls.Sometimes I empathize with the caller. We’re both insales, right?
Not wanting to be rude, I let them plow through theiropening lines. The calls all sound something like this:
RingMe: Commercial Forest Products, this is Steve. How
can I help you?TM: (Three seconds of silence while soulless autodialer
connects me to soulless telemarketer) Hello, is this Mr.Mispronounced Last Name?
Me: What can I help you with?TM: Um… good. How are you?Me: What can I help you with?TM: Blah, blah, blah… I just need to confirm your
address (or other assumptive close).Me: No, thank you, have a good day. (Slowly hanging
up while TM’s futile attempt to continue the conversationfades into the background.)
Fin.
I hate receiving these phone calls. The telemarketingmodus operandi has not changed in decades. It is as freshas a Foghat concert. I have yet to field a call that resultedin a negotiation, much less a sale. Regardless, the callskeep coming in.
Why do we hate telemarketing calls? Let us count theways.
• The shotgun approach. They call everybody with aphone number. Everyone gets the same pitch.
• They do all the talking. Reference the script above. Inan attempt to keep you on the phone, they only shut upwhen they need your recorded consent to start billing.
• They know nothing meaningful about you before theypick up the phone.
• We often know nothing meaningful about them beforethey try to sell us something.
• Probably 95% of callers hate their job and it comesthrough in their presentation.
• Bullying their way to a quick close is considered a
ONDICH On SalesBy Stephen Ondich, Commercial Forest Products
good thing.• They frequently use questionable tactics to create the
illusion of a connection. “We’re doing work for one ofyour neighbors…” is only honest if you consider theEarth’s inhabitants to be yours neighbors.
• “We spoke a couple of months ago and you asked meto call back.” No, I’m quite sure I didn’t.
How could telemarketers revise their approach to actu-ally sell me something?
• Find out information about me before calling. Am Ireally a potential customer for what you’re offering? Doing
even a little pre-call research separates you from the major-ity of cold callers.
• Go off script and have a meaningful dialogue with me.I will often speak with and give information to a personwho I’m conversing with.
When a person is working from a script, it’s like listen-ing to a boring soliloquy. Instead of engaging, my focus is100% on how to quickly end the call without providing
Building-Products.com February 2013 The Merchant Magazine 41
any information that could be miscon-strued as “Yes, I’m interested.”
• Give me a good reason to listen.If you don’t know anything about me,it’s doubtful that you can provide one.
• Pay attention when I tell you whyI’m not interested. Telemarketers aretrained to blow through your objec-tions come hell or high water. If it’snot a fit, move on. This will save youtime and make me more apt to speakto future callers.
• Be direct about who you are andwhy you’re calling. If you’re workingfor a good company that does goodthings, there’s no need to be vague ormisleading about your employer andreason for calling.
Most importantly, how can I avoidmaking telemarketing calls? The lastthing sales professionals want is to belumped into the category of telemar-keter.
Let’s assume that sales phone callsare rated on a scale of 0 to 10, basedon the prospect’s likelihood of takingthe call. Zero is a telemarketing call tobe avoided at all costs. Ten is zero-cost phone time with a respectedindustry consultant/guru. Whenprospects see your number on theircaller ID, are they sizing you up as a0, 5, or 10?
Here’s how to improve your rank-ing:
• Have a good reason for calling.Don’t call just to check in, say hi, orsee how someone is doing. Evenwhen calling a regular customer, thistype of call is not going to generate alot of excitement.
I occasionally receive calls fromvendors that sound like this: “Hi, Ihaven’t heard from you in a while,just calling to check in…” Theimagery associated with this openingis of someone who is not very busy,wants my business, doesn’t have a lotto offer, and wants me to think ofsomething they can sell me.
• When speaking to someone forthe first time, use your brain to find aconnection to lead in with. Do youknow someone at the company? Doyou work with one of their competi-tors? If you have no personal connec-tion, are you familiar with their prod-ucts?
• Let your prospects know you’rethinking about them. “Hi, it’s been awhile since we last spoke. I saw yourname mentioned in The MerchantMagazine last month. Do you wantme to mail you the article?”
The imagery here is of someonewho is busy but hasn’t forgotten aboutyou, is vested in the industry, and hassomething to offer with the magazinearticle.
• Present yourself as having some-thing valuable to offer in a specificway (“We’re the only widget manu-facturer in your state.”), rather thansubjectively (“We make the best wid-gets.”).
Let’s create a sales phone call thatmight actually have a shot of goingsomewhere:
RingMe: Commercial Forest Products,
this is Steve. How can I help you?Caller: Hi, Steve. I was on your
website and saw that you distributewidgets. We supply widgets to somedistributors in Oregon and are lookingto expand into California. Do youhave a few minutes to talk?
Me: Okay… (Questions about thewidgets)
Caller: (Knowledgeable answersabout his widgets)
Caller: I’m going to be at a tradeshow in your area next month, can Istop by and meet you in person?
How does this call compare to the
telemarketing call at the beginning ofthis article?
• Caller had researched my compa-ny before picking up the phone.
• The conversation flowed natural-ly in two directions. If he was work-ing from a script, it was not apparent.
• Caller engaged me with a subjectof interest to me.
• In his answers, caller providedinformation that showed his expertise.
• Caller presented himself as vest-ed in my industry. (What’s this tradeshow he’s going to?)
• Caller wants to meet to see if itmakes sense to work together ratherthan trying to close a deal during theinitial phone call.
Telemarketers use the shotgunapproach. Call volume is emphasizedover call quality. It’s unlikely tele-marketers will ever make calls likethe one I described due to the requiredtime investment. And, if they did,they would be sales professionals.
– Stephen Ondich is the owner ofCommercial Forest Products, Fontana,Ca., a manufacturer and distributor ofhardwood products. He can be reached at(909) 256-4583 or [email protected].
42 The Merchant Magazine February 2013 Building-Products.com
FAMILY BusinessBy Jane Hilburt-Davis
Solutions for familybusiness problems: 5 question to askTHE ABILITY TO think and act sys-
temically is critical when workingin and with family businesses. Failureto do so is a real competitive disad-vantage for family businesses and theprofessionals who serve them.
Thinking systemically:• prevents confusing the symptom
with the problem• provides a crucial link for inte-
grating the family relationship andbusiness strategies
• builds on what is healthy in boththe family and the business
• uses high-leverage points for pos-itive lasting changes
• suggests dynamic and creativeways to deal with obstacles
By asking the following questionswhen faced with a problem in the fam-ily and/or business arena, you canbegin to think in systems terms. If youcannot answer these questions, yourisk working with incomplete data andmaking the problem even more com-plicated.
What is the real problem?Very often what people describe as
the problem is only the symptom.Worded another way: presented prob-lems are rarely the real issue. If youfocus on the symptom without uncov-ering the real problem, you are wast-ing your time and are bound to fail. Adoctor does not only treat the rash, butconducts a series of tests to find outwhat is causing it. That is exactly whatyou must do with a problem in thefamily business.
To get beyond treatment of thesymptom, take a series of steps touncover the real problem. These steps
include hearing all sides of the story,getting family members to talk togeth-er in a safe, structured and neutral set-ting, and keeping all options open.The focus for treatment is the underly-ing structure, the patterns of commu-nication, and conflict management.The goal is to strengthen the system tohelp it solve its own problems, andimprove the bottom line.
How long has this prob-lem existed?
Problems manifest themselves inthree ways: (1) same old stuff, (2)
Building-Products.com February 2013 The Merchant Magazine 43
Have your recent expansion, per-sonnel promotions, new productintroductions, or other companychanges published in the next issueof The Merchant Magazine.
something brand new, and (3) sameold stuff in a new package. If thesymptom has persisted for a longtime, it reflects a deeper problemembedded in the system. It cannot bedealt with until the underlying pat-terns and structures that produce it arecarefully considered and addressed. Ifthe symptom is new, with a short his-tory, deal with it first. In short, think-ing systemically requires an apprecia-tion of behavior patterns over timeand across generations.
Is the problem related tounfinished business?
All living systems, including indi-viduals, families and businesses, gothrough life cycles and crises. Eachstage in the life cycle of a businessand of a family requires certain tasks.Each crisis requires increased com-munication and effective action plansfor the family and the business togrow and move forward. All toooften, problems are the result ofavoiding the communication and tasksthat are necessary to move to the nextstage. Each change in a system pro-duces disruptions in patterns. If emo-tional processes aren’t managed dur-ing such disruptions, the negativeeffects may be felt over time and overmany generations.
Where is the most energy for change?
Energy in systems terms impliespossibilities for change. Two things todiscuss: How does the energy presentitself and what does it look like? Itcan come in many forms: anger,excitement, frustration, enthusiasm,pain, or a combination. Where is theenergy located? It can be in a personof authority, formal or informal, in asubordinate, in an alliance amongmembers of the family business sys-tem.
Your chances for success are obvi-ously greater if the energy for changeis with a person in a position of for-mal authority. Often, however, withsuccession issues, the motivation forchange is in the succeeding genera-tion, which is highly motivated andwithout much formal authority.
Understanding how the whole sys-tem works and appreciating the con-cept of leverage can help createchanges that are positive for the fami-ly and the business.
Does the problem serve a function? If so, what?
Problems often play importantroles in systems. A classic example isscapegoating or dumping problemsonto a person or group of people.Usually, if one person or group is fre-quently blamed, the first question toask is does he/she deserve this? If theanswer is “yes,” then the work is withthat person. If the answer is “no,”then the work is with the system.Then ask, what would happen if thescapegoat were fired or cut off fromthe family? Would the problemsremain?
There are many reasons for scape-goating, but the most common in fam-ily business systems are unresolvedconflicts, work avoidance, and denialof important business decisions to bemade. In short, the question becomes,“Who can we blame?,” rather than,“How can we fix this?”
Problems are powerful forces insystems and can play a useful, ifsometimes destructive, role. Do yourhomework. Be prepared for the falloutif the problem is removed withoutrepairing the underlying structure.
Problems often don’t get therespect they deserve. They usuallyplay important roles in families and inthe workplace, and are windows intosolutions. Ask these critical questions,before you rush in to fix things.
– Jane Hilburt-Davis is president ofKey Resources, LLC, Boston, Ma., a fami-ly business consulting firm. Shehas trained, mentored, and coached hun-dreds of family business advisors and isco-author of Consulting to FamilyBusinesses. Reach her at (617) 577-0044or at [email protected].
Reprinted with permission of KeyResources LLC. No portion of this articlemay be reproduced without its permission.
44 The Merchant Magazine February 2013 Building-Products.com
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carefully harvested Northwest treesready for distribution to you—on timeand at the right price.Located in the Port of Tacoma, we
have ready access to deep water ship-ping, rail heads or trucking terminals forlonger haul loads. Manke operates itsown fleet of trucks and is at your ser-vice for straight or mixed loads bytruck, rail or sea.We manufacture primarily Douglas fir
and western hemlock, including• 2x4 thru 2x12, Lengths 8-20’• 3x4 thru 3x12, Lengths 8-26’• 4x4 and wider, Lengths 8-26’• 6x6 and wider, Lengths 8-26’• 8x8 and wider, Lengths 8-26’• Timber sizes up to 12x12
ments of the EPA’s WaterSense efficiency program.The 4-1/2” 505 provides maximum performance,
even at lower flow rates. Other improvements include71 easy-clean jets, five functions, and an easy-glideselector ring with lever.
DANZE.COM(888) 328-2383
Building-Products.com February 2013 The Merchant Magazine 47
Hatches AwayA new aluminum roof hatch from the Bilco Co.
meets LEED standards for recycled content and is48% more energy efficient than standard hatches.
Features include fully insulated cover and curb,specially designed finger-type gasket to ensure a posi-tive seal, counter-balanced lift assistance for one-handoperation, automatic hold-open arm, and heavy-dutyslam latch with both interior and exterior padlocks.
BILCO.COM(203) 934-6363
Decking With PromiseLatitudes Wave decking from Universal Forest
Products offers the durability of wood composites, atan affordable price.
Solid profile boards can be installed with conven-tional deck screws, while slotted-edged boards can beinstalled with Equator hidden fasteners.
Colors include gray and walnut, and customizablerailing options are offered.
LATITUDESDECK.COM(877) 463-8379
48 The Merchant Magazine February 2013 Building-Products.com
Smarter BitStarborn’s Smart-Bit allows
pre-drilling and countersinkingof fasteners in fiber-cementboard—in one step, at a consis-tent depth.
Designed for use with #10-gauge flat-head screws, the toolis packaged with two drill bits ofdifferent lengths, for use witheither 5/16” or 5/8” thick boards.
A protective stop collar keepsdebris away and prevents damageto the work surface. Once thecollar stops spinning, the hole iscomplete.
STARBORN-INDUSTRIES.COM(800) 596-7747
Universal FastenerThe BlackTalon universal
deck fastener ensures proper gapspacing for all decking materials,both hardwoods and composites.
Made of stainless steel, thehidden fastener includes with twoclips, to accommodate joists andangles. Each package includes170 clips and screws, plus twoT15 driver bits, enough to install100 sq. ft. of 6” board on 16”joist spacing.
BLACKTALON-UNIVERSAL.COM(866) 260-2121
Extreme CoatingCertainTeed’s Extreme
Texture Coat can be used withconventional spray equipment tocreate an orange peel or knock-down texture for interior wallsand ceilings.
The acrylic-based coating isresistant to mold and moisture.Each bucket is pre-mixed andready to apply.
CERTAINTEED.COM(800) 233-899
PVC MouldingProfiles
Azek Building Products addedfour new profiles to its line ofarchitectural mouldings.
Manufactured of cellularPVC, the new profiles include awainscot cap, colonial base cap,3” bed, and imperial/rake crownmoulding.
Each never needs painting andis impervious to moisture andinsects.
AZEK.COM(877) 275-2935
Building-Products.com February 2013 The Merchant Magazine 49
INTERNATIONAL BUILDERS SHOW wasstaged by the National Association of HomeBuilders Jan. 22-24 in Las Vegas, Nv. [1]Mandi Mollom, Mark Davis, Alex Yoshida, AmyWarren. [2] Bob Sloper, Morris Douglas. [3]Mark Reum, Kelli Bergen. [4] Alex Hines, NealShunk, Darrell Strandlee, Stephen McNally. [5]
Scott Van Gonten, Jessica Navascues, StevenKelly. [12] Tony Saad, Jean-Marc Dubois. [13]Brian Orchard, Jay Lattanzio. [14] Craig Young,Dan Beaty, Rick Sanders, Chuck Rigoni. [15]Tom Zimmerman, Jason Quenzer, Patrick Day.
(More photos on next two pages)
Larry Burkholder, Larry Boyts, Will Lepire. [6]Jim Wolf, Rick Kapres, Pam Corn, Matt Cullen,Matt Rossi. [7] Tim Folster, Mike Booth, MikePidlisecky. [8] Stan Kao, Jackson Chen,Jennifer Wei, Greg Schumacher. [9] RandyEngh, Steve Horvath. [10] Chris Salvador,Dustin Schroeder. [11] Shawn Herrington,
IBS 2013
Photos by Merchant M
agazine
50 The Merchant Magazine February 2013 Building-Products.com
Phot
os b
y M
erch
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Mag
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MORE IBS in Las Vegas, Nv. (continued fromprevious page): [1] Marv Askey, Bill Reavely.[2] Barry Breede, Matt Yaun. [3] Alan Oakes,Yolanda Marquez, Mike Moran, Lauren Booth.[4] Cliff Stokes, Melissa Morinell i , KenGoodnough. [5] Jon Bailey, Wayne Milhon. [6]Flora Masciadrelli, John Cook, Jack Delaney.
[14] George McCart, Arden Fullen, JohnJoubert. [15] Patrick Danieu, Doug Reid. [16]Cesar Aguirre, Joel Cone, Richard Lam. [17]Morgan Raganyi, Mark Novak, Robert Simon,Frank Butterfield.
(More photos on next page)
[7] A.J. Jesiolowski, Scott Cathcart, Jim Miller.[8] Patrick Slarko, Joe Biss, C.W. St. John. [9]Randy Richards, Remington Richards. [10]Wesley Blair, Viviane Peixoto, Dan Ivancic.[11] Betsy Bendix, Carol Kelly, Edie Wilson.[12] Bart Bender, Trina Turcan. [13] JeanDesautels, Carol Lyn Groce, Chris Terrels.
Building-Products.com February 2013 The Merchant Magazine 51
MORE IBS (continued): [1] Todd Johnson, Kim Pohl, Len Kasperski. [2]Shannon Mott, Juliet Depina, DeeDee Graham. [3] Scott Klemroth,Tammy & Glenn Cosper. [4] Jim Solic, Brent Gwatney. [5] Don Danka,
Tim Schrader, Tom Fitzgerald. [6] Uli Walther, Chuck Casey. [7] BarbStewart, Leda Johnson. [8] Valerie Misa, Doug Morse, Craig Jacks,Jennifer Faines. [9] Steve Barth. [10] Brian Stuk, Jim Seeger.
52 The Merchant Magazine February 2013 Building-Products.com
CLASSIFIED Marketplace
Rates: $1.20 per word (25 word min.). Phone number counts as 1word, address as 6. Centered copy or headline, $9 per line. Border, $9.Private box, $15. Column inch rate: $55 if art furnished “camera-ready”(advertiser sets the type), $65 if we set type. Send ad to Fax 949-852-
0231 or dkoenig@ building-products.com. For more info, call (949) 852-1990. Make checks payable to Cutler Publishing. Deadline: 18th of pre-vious month.
To reply to ads with private box numbers, send correspondenceto box number shown, c/o The Merchant. Names of advertisers using abox number cannot be released.
building-products.com
HELP WANTED
NEIMAN REED LUMBER CO., a SanFernando Valley-based wholesale lumber andplywood distributor, is looking for two qualityand seasoned salespersons. The first candidatewill manage and run our plywood operationwith sales and buying responsibilities. Mill con-tacts and customer following are essential. Thesecond candidate will be a softwood/hardwoodtrader with loyal following. We offer the mostcomprehensive inventory with a full spectrumof grades, a competitive compensation pro-gram, earned bonuses, 401K, travel andexpense accounts, and full-health insurancebenefits. This is an excellent opportunity to be akey part of a premier wholesale lumber compa-ny. Please send resumes in confidence to EdLangley: [email protected].
Gotyour own
copy?Just $22 a year
Start your own subscription withour very next issue by callingHeather at (949) 852-1990
WANTED: DOWNFALL & SECONDSDownfall, excess or salvage lumber, panels,
roofing, etc., purchased for export. [email protected], (619) 954-9955.
IN Memoriam
Richard Lee “Dick” Wickens,89, co-founder of Lumber Inc.,Albuquerque, N.M., died Dec. 29,2012.
A World War II veteran, heworked for NM Timber Co., BatesRoberts Lumber Co., AmericanBuilders Supply, and AlbuquerqueLumber before teaming with JohnChiado Sr. to launch Lumber Inc. in1972. He served as president, helpingthe business grow to six locations,until 2007, when it was sold toProBuild and he retired.
Ross Gordon Kincaid, 100, long-time executive director of the WesternBuilding Material Association,Olympia, Wa., and namesake of itsKincaid Learning Center, died Jan. 2in Palm Desert, Ca.
He spent 43 years in the lumberindustry, retiring from WBMA in1976. He then spent seven years pre-
HELP WANTED
SOUTHERN CALIFORNIAOUTSIDE SALES REP
Universal Forest Products, the nation’s leadingmanufacturer and distributor of wood and wood-alternative products to retail/dealer, manufac-tured housing and industrial markets, is seekingan outside sales representative to serve its south-ern California customer base. This position isbased out of the company’s Riverside, Ca.,facility. This candidate should have comprehen-sive knowledge of the southern California mar-ketplace and a thorough understanding of theproducts therein. We are looking for people whocan contribute to our growth, who are hungryfor success, who bring a winning attitude totheir work, and who are interested in newopportunities in an established arena. You pro-vide the skill, knowledge, integrity and perse-verance, and we will provide a great place towork, where you will be encouraged to growand learn and rewarded with outstanding bene-fits and compensation. If you are interested injoining our team, please email your resume toSteve Mitchell at [email protected]. Allreplies will be kept strictly confidential.Universal is an equal opportunity employer.
Richard LeRoy Smith, 88, retiredtreasurer at Sierra Pacific Industries,Anderson, Ca., died Nov. 27 in Bend,Ca.
Mr. Smith served as a radiomanwith the Navy during World War II,then earned his bachelor’s degree inaccounting at the University ofOregon. After graduation, he workedas a CPA at Arthur Young, Portland,Or., then went to work at MolallaForest Products, Molalla, Or. In 1971,he joined SPI in Arcata, Ca., where heworked as treasurer until his retire-ment in 1992.
Richard Marvin “Dick” Hanson,85, former log buyer for Mary’s RiverLumber, Corvallis, Or., died Jan. 17in Olympia, Wa.
After serving in the U.S. Navy andgraduating from the University ofWashington, he began his career inforestry, working for Boise Cascadeand Weyerhaeuser before joiningMary’s River in January 1988. Heretired in 1994.
senting management and sales train-ing seminars throughout the westernU.S. and Canada with CPA SeldonVanderWegen.
David Norman Bodtker, 76,retired Pacific Northwest lumber trad-er, died Nov. 16 in Portland, Or.
He started his lumber career in1958, after attending the University ofOregon. Before his retirement in 2000from Alpine Veneer, Portland, hetraded at Western International ForestProducts, Portland, and ShamrockBuilding Materials, Eugene, Or.
Warren Brown, 45, account man-ager for the north-central region forSierraPine, Roseville, Ca., died Dec.31 in Roseville.
He had been with SierraPine morethan 10 years.
Oren Eugene Hollett, 85, retiredformer supervisor of BohemiaLumber’s sawmill in Saginaw, Or.,died Dec. 25.
Building-Products.com February 2013 The Merchant Magazine 53
The answers for a long lasting, more beautiful deck.
DATE BookListings are often submitted months in advance. Always verify
dates and locations with sponsor before making plans to attend.
Southern California Hoo-Hoo Club – Feb. 20, meeting, San DimasGolf Course, San Dimas, Ca.; (760) 324-0842; hoohoo117.org.
National Frame Building Association – Feb. 20-22, frame buildingexpo, Memphis, Tn.; (800) 557-6957; www.nfba.org.
Ace Hardware Corp. – Feb. 21-23, spring show, New Orleans, La.;(630) 990-7662; www.acehardware.com.
Oregon Logging Conference – Feb. 21-23, Lane County Fair-grounds, Eugene, Or.; (800) 595-9191; www.oregonloggingcon-ference.com.
Orgill Inc. – Feb. 21-23, dealer market, Orange County ConventionCenter, Orlando, Fl.; (800) 347-2860; www.orgill.com.
Colorado Springs Home & Landscape Expo – Feb. 22-24,Colorado Springs, Co.; (800) 374-6463; homeshowcenter.com.
True Value Co. – Feb. 23-25, spring market, Atlanta, Ga.; (773)695-5171; www.truevaluecompany.com.
American Architectural Manufacturers Association – Feb. 24-27,annual conference, Loews Ventana Canyon, Tucson, Az.; (847)303-5664; www.aamanet.org.
American Fence Association – Feb. 27-March 1, FenceTech/DeckTech, George R. Brown Convention Center, Houston, Tx.;(800) 822-4342; www.americanfenceassociation.com.
Western Wood Preservers Institute – Feb. 28-March 3, wintermeeting, Embassy Suites Downtown, Portland, Or.; (360) 693-9958; www.wwpinstitute.org.
Western Wood Products Association – March 3-5, annual meet-ing, Embassy Suites Downtown, Portland, Or.; (503) 224-3930;wwpa.org.
Tacoma-Olympia Hoo-Hoo Club – March 5, meeting, Seattle, Wa.;(253) 531-1834.
Moulding & Millwork Producers Association – March 5-9, wintermeeting, Talking Stick Resort, Scottsdale, Az.; (800) 550-7889;www.wmmpa.com.
West Coast Lumber & Building Material Assn. – March 7, 2ndGrowth meeting, Buena Park, Ca.; (800) 266-4344; www.lum-berassociation.org.
Mountain States Lumber & Building Material Dealers Assn. –March 7-8, products expo, Denver Merchandise Mart, Denver,Co.; (800) 365-0919; www.mslbmda.org.
LUMBERYARD brought an end to graffiti by hiring a local streetartist to paint a mural on the side of its warehouse.
Tired of dealing with spray-painted graffiti,one East Coast dealer commissioned a local artist tocreate something that would get people talking.
“For a long time, I’ve had in mind to use the spaceas a canvas for something a little more real, a littlemore meaningful,” says Adam Wallace, assistant vicepresident of West Haven Lumber, West Haven, Ct.“It’s opened a dialogue that’s never happened beforeat the lumberyard.”
Adam and his family have been running the yard—which now occupies two city blocks—since 1927. Thenew art covers a back wall, near the pre-hung doorshop, that backs up to commuter rail tracks. Thatmeans the art—and the company—attracts lots ofnotice.
Stories that appeared in local newspapers also gotthe word out, attracting curious customers and peoplefrom nearby homes and businesses.
An anonymous street artist known as BiP, whichstands for Believe in People, created the wall mural atnight during one week in December. Although he’screated other projects in the area, the wall at WestHaven Lumber is the largest so far.
Wallace says he saw a sketch before work started,but didn’t have any say, other than veto power. “Theartist wasn’t interested in doing any sort of commis-sioned piece,” he says. “It was clear from the begin-ning that I would have no editorial control at all.”
Since a local art gallery has volunteered to maintainthe mural, it will be around for a long while—which isokay with Wallace.
“It’s a different vibe for a lumberyard,” he notes.“Guys here are usually focused on one task at a time,whatever they’re doing that day. I see it as a hopefulpiece, that’s pulling you up to another level.”
IDEA FileArtful Ingenuity
The MERCHANT Magazine
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