Lines of supply: traditionally characterized by small companies making low-volume purchases, the remodeling market definitely can be a challenge to supply—but it also can be a lucrative revenue stream for pro dealers that treat remodelers like VIPs rather than fill-in business

Prosales, Sept, 2004 by John Caulfield

Since opening for business five years ago, Arthur Bradley Design/ Build has shared a parking lot with The Home Depot on Fairmont Avenue in San Diego, one of 13 stores the retail giant operates in this Southern California market. The remodeler's choice of location was anything but accidental. "We have 30 employees and we wanted to be near where they could pick up materials in the morning before they head out to the jobsite," explains Brad Schuber, Arthur Bradley's vice president.

Schuber says that he's been "satisfied" with the store's products and service. But as president of the National Association of the Remodeling Industry's (NARD San Diego chapter, he regularly hears other remodelers express their displeasure with big boxes as supply sources. Remodelers around the country, in fact, often make shopping these mammoth retail outlets sound about as inviting as a visit to the dentist for a root canal. The joke often is that when you go to a big box, "say 'good-bye' because you have to wait and wait in line, and you're in back of someone buying three cans of paint, and you get to the cash register and they can't find the barcode. You're spending half an hour, 45 minutes in line every time," says Joe McKinstry, who owns Joseph McKinstry Construction, a $5.5 million general contractor based in Seattle.

Pros have carped about big boxes almost from the day the first The Home Depot opened in 1979. At the same time, however, when it comes to serving the remodeling market, big boxes definitely have garnered a place in the supply chain, creating a challenge for pro dealers looking to become more entrenched as a supply source for remodelers. Indeed, an exclusive PROSALES e-mail reader poll of 418 remodelers (see "About the Survey" below), combined with anecdotal interviews with executives from nearly a dozen companies around the country, finds that remodelers see plusses and minuses in all suppliers, and rarely confine their purchases to any one source. Dealers that offer the right combination of fair pricing and consistent service seem to be in the best position to keep remodelers in their folds.

Sure, remodelers all have favorite local yards they frequent. A full 80 percent of those polled for the survey said they prefer a lumberyard or building supply center for lumber products, and more than three-fifths go to lumberyards first for molding, decking, wood siding, and housewrap (see Figure 1). But specialty distributors regularly cuter the picture for appliances, lighting, floorcovering, bath fixtures, paint, cabinetry, and other categories. And manufacturers or fabricators often are the most efficient sources for products that require customizing, like windows, cabinets, and tile. (About 10 percent of the survey's respondents said they purchase doors and cabinets this way.) McKinstry, for one, buys lumber directly from three mills in the Pacific Northwest, each with its own specialty "'X' supplier might be better with flex spans, while 'Y' supplier is better for engineered products," he explains.

The question of where remodelers buy materials gets complicated when they let subcontractors purchase what they install (see "Sub Culture," page 60), and they must also assuage architects and designers--who are involved in the purchasing process with nearly 30 percent of the survey's respondents--as well as homeowners who insist on being integral to this process (see Figure 2).

But regardless of where they shop, remodelers say they always seek--yet only sporadically receive--the respect that suppliers and distributors shower on home builders. Several remodelers also reported that they feel like second-class citizens because many pro dealers still view their sector as "fill-in" business. That's a big opportunity for dealers that are willing to treat remodelers like VIPs, such as Brooklyn Park, Minn.-based Scherer Bros. Lumber, which is capitalizing on that sense of alienation with a separate sales force dedicated to remodeler clients (see "Team Building," page 56).

Weighing the Options

Remodelers consider all kinds of factors when choosing a supplier. "First of all, it has to be easy," says Bruce Case, vice president with Case Design/ Remodeling, a $36 million national firm based in Bethesda, Md. He notes that several window and cabinet suppliers use pricing software that's simple for remodelers to tap into. Case also expects suppliers to be reliable. "When they say it's going to be done in two weeks, it's done in two weeks."

Overall, remodelers' selection processes often boil down to which suppliers or distributors offer the broadest assortments and most responsive delivery in their areas. When asked what criteria are used to choose a supplier, on a scale of 1 to 10, with 1 being not at all important and 10 being very important, a supplier's in-stock position was rated 9 or 10 by more of the survey's respondents--71 percent--than any other criterion (see Figure 3). It was followed closely by timely delivery (68 percent), a supplier's capacity to special order (66 percent), and product selection (63 percent).