Internet links pro dealer to its competitors seeking doors

Home Channel News, August 9, 1999

Two months ago, four-unit lumber dealer A.J. Smith launched a new e-commerce business called Net-Sell that was designed to sell steel frames, doors and hardware for use in industrial/commercial applications via the World Wide Web. The hook to this venture, however, is that A.]. Smith is gearing the new business not toward industrial/commercial contractors but to traditional lumberyards like itself.

"We felt the largest opportunity was to [sell to] like businesses --lumberyards, home centers, hardware stores," said Gilbert Smith, president and third-generation owner of Nashville, Tenn-based AJ. Smith. "Net-Sell helps dealers who want to get into something new [i.e., commercial door packages] without having any cost, inventory or expertise."

For AJ. Smith, the new business is a way to expand its own commercial door sales beyond its Tennessee and Kentucky markets and into other parts of the South, or possibly nationwide. The dealer has operated a commercial door division, based in Clarksville, lean., for the better part of a decade now, Smith noted.

The site, www.net-sell.net, was designed to make it as simple as possible for dealers, or their staff members, to sit at their desktop computers, punch in various sizes and specifications, and receive an instant quote with a accurately sized materials list. The quote has two prices -- a wholesale figure for the dealers and a marked-up price for their customers. The margins can be preset by the dealer when he or she first signs onto the site.

If the dealer accepts the quote, then the order will go through and a delivery date will be set.

"The program leads users through a process to get to the right materials at the right sizes and code requirements," said John Welty, A.J. Smith's door division manager. "There are 'show-me' templates along the way that also guide users."

Also significant, Welty explained, is that A.J. Smith's name does not appear anywhere on this Web site or its billing invoice. Though many dealers --at least in Smith's nearby markets -- understand they ore buying from another lumberyard, if not a competitor, that does-not mean they want their contractor customers to know that. All name references are to Net-Sell.

Opportunistic market

Smith said he realized a big opportunity in this area because he knows the challenges of entering and making money in the hollow-metal door and frame market first hand. Smith's door division has its own veteran manager, six sales reps and several project managers whose job is to measure jobs and verify the requirements customers submit.

During the seven years the division has operated, experience has directed the company in such areas as knowing what are popular sizes and door finishers. Despite some common and repetitive applications, the hollow-metal door market remains a high customer service field, says Welty.

"There ore a lot of one to one relationships," he explained. "You'll get a good many customers who are converting from residential to commercial [contracting] and they need help."

Technology providing growth

In recent years, the Smith's door division has grown from being one of four primary business segments -- doors, traditional lumber and building materials, sealants and waterproofing, and an authorized Pella Window dealership -- to becoming one of its growth vehicles. (A.J. Smith officials declined to disclose sales.)

Smith saw its expertise in this field as a clear advantage and wanted to find a way to leverage it. Two years ago the company turned to technology to take the business forward. The first business plan called for a CD-ROM version, but that was quickly abandoned when it became obvious the Internet was the way to go.

Net-Sell asks its users to register, gives them an account number and looks, where possible, to establish relationships. "We've designed it to be a long-term solution for dealers, and not a one-time special buy," said Welty.

As with any Internet venture, the key will be how successful A.J. Smith is at driving traffic -- in this case dealer traffic -- toward Net-Sell. Smith is currently relying on two very traditional marketing methods: a mailing program to all of the lumber dealers in its regions and calling on AJ. Smith's list of lumber industry contacts.

"We have to go to the market aggressively and build up the interest," said Welty.