The Future Of Dealer-Builder Relationships

Home Channel News, Dec 11, 2000

"We run very Spartan businesses," said Dave Krawczyk, president and chief operating officer of Wickes Lumber, during his keynote address at the fourth annual Pro Dealer Conference. "There's not a lot of glitter."

Still, dealers face "a ton" of operating and financial risks, he added, such as extending credit, buying in a fluctuating market and being in a "capital-intense" business. Those risks are exacerbated by an ever-evolving marketplace in which builder customers demand more for less.

For example, when he joined Wickes in 1997, the company believed its future lied in having the lowest price, Krawczyk said. Not so today.

Through component manufacturing, Wickes has created value by reducing cycle times. The risk, he noted, was acceptance of the product by home builders. The reward was an ability to shift control of the supply chain.

"There was a tremendous carrot hanging out there," Krawczyk said. The company formed strategic partnerships with builders working in more than one market and started installing insulation, siding and vinyl trim. Wickes also developed the capability to manufacture components in one-step markets and non-component markets.

With this new business, Wickes was able to double its sales, strengthen its partnerships and alliances, expand its market reach and increase penetration in existing markets.

"We found some great partners and great customers who believed in the product," he said. "While we have found a way to increase profitability, we have also delivered significant savings to our customers.