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Set-uing lumber 81,building products retailers &t wholesale distributors

PUBLISHER Alan Oakes (ajoakes@aol.com)

PUBLISHER EMERITUS David Cutler

EDITOR David Koenig (dkoenig@building-products.com)

ASSOCIATE EDITOR Karen Debats (kdebats@building-products.com)

CONTRIBUTING EDITORS Carla Wddemar, Roy Burleson

IHordwood flooring .on be less expensive thon ohernolives mopping out your nexl technology moves

Hotdwoods ton sove money when considering foctors beyond initiol purchose price ond in$ollotion.

16 Oo qheod ond bockup

Crofting ond implementlng on online bockup sy$em to protect essenfiol busines dofo.

Appclochion hordwood produccrs ved'ly sustoinobility

ADVERTISING SALES MANAGER Chuck Casey (ccasey@buildi ng-products.com)

ADMINISTRATION DIRECTOR/ SECRETARY Marie Oakes (mfpoakes@aol.com)

CIRCULATION Heather Kelly (hkelly@building-products.com)

How to Advertise

Contact our advedising ollices lor rates:

SOUTH, MIDWEST & WEST: Chuck Casey, 4500 Campus Dr., Ste.480, Newport Beach, Ca. 92660. Phone (949) 852.1990 Fax 949-8520231 Email ccasey@building-products.com

NORTHEAST: Paul Mummolo, 404 Princeton Ave,, Brick, N.J.08724. Phone (732) 8998102 F u 732-899-2758 mummolop@comcast.net

INTEBNET ADS: Alan Oakes, www.buildingproducts.com. Phone(949) 852-1990 Fax 949852-0231 Email ajoakes@aol,com.

How to Subscribe

Call Heather at (949) 852.1990 or send a check for the following amount to Building Products Digest,4500 Campus Drive, Suite 480, Newport Beach, Ca. 92660-1872: U.S.A.: One year (12 issues), 918

Two years,929

Three years, $39

FOREIGN lPer year paid in advance in US funds):

Surlace-Canada or Mexico. $45

Other countries, $60

Air rates also available.

Single copies, $4 + shipping

Back issues lwhen availabte), $5 + shipping

WWW.BUILDING.PRODUCTS.COM i BUILDING PRODUCTS DIGEST is published monthly at 4500 Campus Dr., Ste.480, Newport Beach, Ca.92660-1872, (949) 852-1990, Fax 949-852-0231, www.building-products.com, by Cutler Publishing, Inc. (a California Corporation). lt is an independently owned publication lor building products relailers and wholesale distributors in 37 states East ol the Rockies. Copyright@2007 by Cutler Publishing, Inc. Cover and entire contents are fully protected and must not be reproduced in any manner wilhout written permission. All Rights Reserved. Building Products Digest reserves the right to accept or reject any editorial or adverlising matter, and assumes no liability for materials furnished to it.

CHANGE OF ADDRESS Send address label from recent issue, new address and nine-digit zip code.

Burr,url{c Pnooucrs Drcesr Ocroeen 2007

About the Cover

The fronl cover is a pakl advadisemsnt, this nanth sponsored by Arch Wood Protection

ALAN OAKES publisher ajoakes@aol.com

Shhhh... wh?t's going on?

As I call around, the question I am asked all the time is "What are you hearing? What's going on?" In bad times, we all feel better when we hear about olhers sharing our own pain. as misery loves company.

In reply, I r.vould like to say I am hearing only good things, but in truth I cannot. There is no doubt that, especialIy in certain parts of the country. times are about as tough as they can get (l hope). We have certainly heard of areas where business is down 50-l0Vo. and in best case 20-25Vo down. News from the manufacturer down to the consumer is still negative, with the general press doing everything possible to scare off any recovery.

However, many companies have reorganized their businesses, are trading perfectly well, and are adapting to what they need to do. I hear over and over again of companies adjusting their product mix and looking less at their commodity business and more for new higher margin products to sell. I hear of companies sucking up others even though there is perhaps no immediate return on capital, preparing themselves for the turnaround. Unfortunately, we are also seeing some fall by the wayside, while others are being swallowed up. Sometimes, business needs a time of adjustment to do some clearing out. Painful, but it arguably leaves the industry sounder along the way.

I think mid-2006 rvas when we all realized the golden goose had flown the coop and that 2001 would be a tough year, but the general feeling was "let's get out of 2007, and 2008 will be better." About third quarter last year, I heard a top industry economist say that his company-one of the industry's largest-did not see a turnaround before 2010. I must admit I swallowed hard and thought that he was a year and a half out, and that by first or second quarter of 2008 we would start seeing an up arrow. However, I am not that confident at this moment in time.

I believe that before we can see an up-tick we need two things to happen. First, we need "quiet time" and then some definite drastic action by the Fed. It's not clear if the Fed will intervene. but for confidence levels to rise, we need a space of two to three months with no bad news, and that certainly has not happened yet. On the other hand, for those smart enough this is a time of great opportunity. The marketers of this industry are licking their chops at the opportunities to gain market share at the expense of others, and are not sitting still.

Yet here we are in October. and if you are in management, you have to start the annual budget process. I must admit, I too am scratching my head, but I have never managed just for the short term and I will not be planning for doom. The role of management is to manage not only for the short term, but also the long term. This is what we are hired to do, and every year you make it through, you go back in and wrestle with the paradox all over again.

The easiest job a manager can do is manage for the short term. You just keep squeezing out costs, until you destroy the company. Or if you manage for the long-term, you can keep making the excuse: stay the course and everything will be rosy. The attributes of a leader are the ability to manage rvith strength, vision, and courage, and to do both.

Anything can be cut with instant gratification to the bottom line. But what happens six months to a year latcr? I am a great believer that when you do the right things, good things happen. You do nothing. you receive nothing in return.

This is certainly a time when your company needs strong leadership. It is not a time for the faint of heart. While managing and motivating your people to not only deliver immediate results, do spend the time and money to continue their development. Also encourage them to take shared risks. Do not stop spending on R&D -you do need to find and develop new products and services. Do not stop educational programs and your association affiliations. Knowledge is king in this environmenr. Do not cut your sales and marketing programs. This last comment might also suggest that some companies should have a marketing program to begin with (hint, hint).

Many decisions are required during a working day. None will be more important than achieving the fine balance of both long- and short-term requirements to make a business successful and attracting and keeping the human capital that this industry continues to struggle to attract. Good luck!

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