Thrive qs on engineered sqles Gonsullanl

By Dan Harris Director Trus Joist University Greenwood Village, Co

/ANE OF the most challenging \-faspects of selling engineered lumber is dealing with the price. It costs more than dimension lumber and may cost more than other engineered lumber alternatives that your competitors sell.

For the sales rep who has been selling lumber for years, the concept of deliberately selling a higher-priced product runs counter to their years of experience. After all, isn't the company always looking for lower lumber prices on the open market, searching for more cost effective ways to purchase wood, and aren't builders always pushing to get a better price?

Selling a higher-priced product is a shocker to many traditional lumber salesmen,

The answer is yes to all of the above, but these points are valid for commodity products-not value-added products like engineered lumber.

Because selling a higher Priced product is a shocker to so many traditional lumber salesmen, several creative methods of introducing this product to builders have been used. Presenting an estimate that includes joists only or converting the plan to your brand of engineered lumber on a one-for-one basis, are the two most common ways of "softening the blow" to the builder or to present a "better" price than the competition.

Both of these options are dangerous and provide at best short-term sales. What is dangerous is that (a) your company is not able to leverage the added value that engineered lumber provides over the long haul and (b) the lack of design (selling the products without designing them) will probably create problems for the builder. The sales are short term because they are based on only showing part of the hand that your company and you have to offer.

Let's look at both of these oPtions so we can see why they shouldn't be in your sales arsenal.

Estimates that include joists only are a commodity approach that shortchange the builder and your company. ln creating this estimate. an engineered lumber alternative (usually the same depth as the joist specified on the plans) is selected and checked against the manufacturer's span chart. In the case of a specified 2xl0 floor, a 9-l/2" engineered I-joist is picked. Not too hard. All of the maior manu- facturers of 2xl0-sized I-joists can outspan any #2 grade of 2x10 regardless of the species. The estimator only has to do his conventional takeoff on 2xl0's; normally one each foot of width to cover 16" o.c. spacing, one on each end, and a few for doubles, stairwell or fireplace openings, and convert that lineal footage estimate to the I-joist. The shortchange is that all of the special requirements of an I-joist floor-hangers, beams, fillers, web stiffeners, etc.-are left off the estimate. The builder may bite on this estimate because it looks okay and is simple to understand.

What happens in the field, though, is usually a disaster. ManY 2xl0 plans are not properly designed initially for all of the non-stacking loads that occur in a house, so where double joists may be specified as a rule-ofthumb, a beam or triple I-joist may be required.

To compound the design shortcomings of many plans, framers will typically install what they get. If there are no hangers, pressure blocks are installed, joist flanges are notched to fit 2x hangers...the list of problems and home remedies is endless. For the builder, this means getting the home red-tagged by the building inspector, spending hundreds of dollars more for additional materials, and a home that is structurally inferior and unwarranted by the manufacturer.

Sales reps who make the mistake of selling on a joist-only basis soon find themselves having to compete on a price basis with their competitors. The builder is quick to see rhat he is not getting anything extra, that there is no value in the sale, and looks to other suppliers for a bid. More than one sales manager has found himself in the position of having to discount the "value-added" product because the sales rep used this technique. When this happens, the opportunity for profit vanishes quickly and the spiral down to commodity status is lightning fast.

When you hear a sales rep or manager make the claim, "This engineered lumber business is just a commodity," chances are this is the approach that led them to this conclusion. The sad part is that the rep normally doesn't understand that he was the cause of it.

The second estimate alternative, providing a more complete materials estimate and doing it on a one-for-one basis, is similar to the first alternative with a twist. In this case, there is probably a more complete specification on the plans (usually your competitor's brand of engineered lumber products).

Making the assumption that the design is correct, and because your manufacturers rep showed you that your brand is equally as good as the other guys, you can "confiscate" the design and replace the products onefor-one. Assuming your products are cheaper than your competitor's, you can lock down the job easily. There is certainly less danger here to the structure because you've probably got a more complete design to work from, but there is still a downside.

The downside of this one-for-one estimate is twofold. First, when there is a structural problem, and believe me, there will be one, you'll have no leg to stand on. You can blame the architect, but that doesn't make the problem go away. Once you've demonstrated that your value is only providing products, but no design service, the builder will quickly look to other suppliers who will be more conscientious. Secondly, the brand of ELP you have to offer has different properties than all of your competitors'. That's part of what makes each one a brand, not a commodity. Where a specified joist for a cantilever may work for your competitor, for example, it may not work for yours. You may have needed to add extra joists or specify reinforcement, etc., so you may be selling projects that the manufacturer will not warranty. Explaining your way out of a situation like this can be exasperating at best and strain the relationship with your builder.

The lesson in providing estimates to your builders rests on a final alternative: provide a complete design service, put it all in your estimate and sell it. Let's address the architect's work first because that should be the basis for your design-not your competitor's. I can say with conviction that I've never seen a plan that couldn't be tweaked or improved structurally. This is not to disparage architects, but the fact is they don't have the value you have in knowing what products are available locally. They may have an idea, but you have an inventory position, which is much more powerful. Look for every opportunity to design in what you know will provide the best value to your builder.

Use your manufacturer's recommendations no matter how absurd they may seem. What I mean by this is that ELP manufacturers have come up with all kinds of creative ways of making an Ibeam work in a rectangular world; web stiffeners, filler blocks, specialty hangers, squash blocks, etc. Like it or not, though, that's part of the package.

Once you've got a value-added complete design, put it in the estimate and sell it! Make sure you've got all of your bases covered-extra plywood for the accessories, enough extra 2x4' s for the framer to cut squash blocks, and please for gosh sake, don't leave out the hangers or the nails it takes to make the hansers work. All of this makes your estimate higher, no doubt about it, but if there's one thing that drives builders over the edge. it's showing up on a site where the framing crew is hanging around because they're waiting for the hangers that didn't show up in the floor package, or the extra joists that needed to be put in because they weren't designed in, or a red tag because the right nails weren't supplied.

There is a simple saying in our industry that you need to commit to memory: "What is the price once the dust settles?" Your eoal should be to explain that your estimate won't change from today to the last nail pounded in.

Selling your estimate with integrity, good design, and full backing of the manufacturer spells confidence and commitment to your builder's best interest. With these points in mind, you've got a value-added estimate, not a con game.

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is ovoiloble by circling the corresponding Reoder Service number opposite the inside bock cover ond sending the form to New Products Editor, FAX to 949-852-0231, by [-moil to rfoy@ioc.net, by moil to 4500 Compus Dr., Suite 480, Newport Beoch, C0.92660, or by colling (949) 852-r 990.

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