The Merchant August 2015

The

MERCHANT

AUGUST 2015

Magazine

THE VOICE OF THE WEST’S LBM DEALERS & DISTRIBUTORS – SINCE 1922

SALES & MARKETING SPECIAL ISSUE

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EDI

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MILLWORK & TRIM

Building-Products.com

August 2015

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The Merchant Magazine

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August 2015

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 Volume 94  Number 2

MERCHANT

Magazine

Annual Sales & Marketing Special Issue

The

MERCHANT

Magazine

www.building-products.com

A publication of 526 Media Group, Inc.

151 Kalmus Dr., Ste. D200, Costa Mesa, CA 92626

President/Publisher Patrick Adams padams@building-products.com Vice President Shelly Smith Adams sadams@building-products.com Publishers Emeritus David Cutler Alan Oakes Editor/Production Manager David Koenig david@building-products.com Associate Editor Stephanie Ornelas sornelas@building-products.com Contributing Editors Carla Waldemar, James Olsen

Special Features

In Every Issue

8 ONE ON ONE

WITH MAZE NAILS’ ROELIF LOVELAND

12 MANAGEMENT TIPS

4 STEPS TO START BUYING GREEN

6 ACROSS THE BOARD 18 COMPETITIVE INTELLIGENCE 48 FAMILY BUSINESS

14 MARGIN BUILDERS

50 MOVERS & SHAKERS

16 FEATURE STORY

54 NEW PRODUCTS

SHARING PVC TRIM EXPERTISE NEW MATERIAL WORLD IN MILLWORK

20 FOREST ECONOMICS

PAUL JANNKE ON MARKET REBOUND

66 ASSOCIATION UPDATE 66 CLASSIFIED MARKETPLACE

29 SALES & MARKETING SPECIAL ISSUE 66 IN MEMORIAM • SALES CULTURE • MARKETING PLAN 67 DATE BOOK • PR • SUPPLIER SELECTION • TREND FORECASTING • THE BASICS • REVENUE GROWTH • PRICING

52 INDUSTRY TRENDS

SPRAY FOAM MEETS ZNE RULES

58 PHOTO RECAP: IDAHO GOLF INLAND LUMBER PRODUCERS

Online BREAKING INDUSTRY NEWS, EVENT PHOTOS, & DIGITAL EDITION OF THE MERCHANT

BUILDING-PRODUCTS.COM

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67 ADVERTISERS INDEX 68 FLASHBACK CHANGE OF ADDRESS Send address label from recent issue, new address, and 9-digit zip to address below.

POSTMASTER Send address changes to The Merchant Magazine, 151 Kalmus Dr., Ste. D200, Costa Mesa, CA 92626.

The Merchant Magazine (ISSN 7399723) (USPS 796560) is published monthly at 151 Kalmus Dr., Ste. D200, Costa Mesa, CA 92626 by 526 Media Group, Inc. Periodicals Postage paid at Newport Beach, CA, and additional post offices. It is an independently-owned publication for the retail, wholesale and distribution levels of the lumber and building products markets in 13 western states. Copyright®2015 by 526 Media Group, Inc. Cover and entire contents are fully protected and must not be reproduced in any manner without written permission. All Rights Reserved. It reserves the right to accept or reject any editorial or advertising matter, and assumes no liability for materials furnished to it.

August 2015

Advertising Sales Manager Chuck Casey chuck@building-products.com Circulation Manager Heather Kelly hkelly@building-products.com

How to Advertise

PRINT or ONLINE Chuck Casey Phone (714) 486-2735 Fax 714-486-2745 chuck@building-products.com Patrick Adams Phone (714) 486-2735 Fax 714-486-2745 padams@building-products.com CLASSIFIED – David Koenig Phone (714) 486-2735 Fax 714-486-2745 david@building-products.com

How to Subscribe

SUBSCRIPTIONS Heather Kelly Phone (714) 486-2735 Fax 714-486-2745 hkelly@building-products.com or send a check to 151 Kalmus Dr., Ste. D200, Costa Mesa, CA 92626 U.S.A.: One year (12 issues), $22 Two years, $36 Three years, $50 FOREIGN (Per year, paid in advance in US funds): Surface-Canada or Mexico, $48 Other countries, $60 Air rates also available.

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ACROSS the Board

By Patrick Adams

Making memories

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RECENTLY FOUND MYSELF on an amazing business trip with my family in one of our nation’s most beautiful spots. My wife and daughter had never been there and we all said, “This is a trip we will never forget.” This, combined with getting older and occasionally being surprised at what I can’t remember, got me thinking about what makes something unforgettable? Is it random or can we improve the chances of something being truly memorable?

I usually can’t remember the last movie I saw with my wife or sometimes, even what I had for dinner the night before. But, I can vividly remember the first time I took the woman who would eventually become my wife out on our first official date. It was a perfect summer evening in July in southern California. She looked great and when I got into the car, I could smell her perfume. When she occasionally wears it now, it takes me back to that night. I took her to a little restaurant with a patio high on a cliff that dropped down to the ocean below. We could hear the waves, see the birds, and smell the salt mist in the air. As we held hands at the table, I kept thinking how soft her skin was. I remember our dinner being just okay, but then hearing something at the table next to us that made us both laugh out loud.

Now, why do I remember something like this in such great detail while other things get lost so quickly? I think it’s because the things that are most memorable are things that engage all of our five senses (sight, sound, taste, touch, smell). Think about it—I’ll bet you remember the test drive before you bought the car you’re driving—that new car smell, the feel of the

leather, the sound of the engine, the look of the lines of the body.

What about your favorite coffee shop? I’ll bet you’ve had better coffee somewhere else. Why is this one your favorite? Think about the smell of popcorn or chocolate chip cookies—it will trigger a memory. Ever pass a stranger on the street and get a whiff of perfume that reminds you of someone?

Lasting memories are experiences that engage our senses. In today’s business, I struggle with how to set us apart in a crowded market. How do I show customers that I truly appreciate their business and show the market that we care about their success? They say “talk is cheap” and “actions speak louder than words,” and I’m the strongest believer of that. Is it possible to make your interactions with your customers an “experience” that engages the senses in a meaningful way? Perhaps… I think this is why the traditional visit from a sales rep will never go away—because it connects the customer to the business using all of the senses in a meaningful way.

This is why when people ask me if I am scared that print publications will go away in favor of digital, I laugh.

Digital can never do what print publications can! Think about it—when I see the Wall Street Journal arrive, I think of my Grandfather who has read it every day for decades. I hear the sound of the thud in my driveway when the delivery boy throws it at 4:30 a.m. and the sound of the paper as you turn its pages. I smell the fresh ink and feel the paper that only newspapers have. Reading the paper while you have your coffee is a morning ritual as American as apple pie, and rolling up your favorite magazine to carry in your back pocket is simply convenient!

It’s not to say that things like digital, TV, radio and others don’t have their places now and into the future. But, there’s a credibility and experience that goes along with print. It’s not about a generation, or a tradition; it’s about engaging the senses so that what you read becomes all the more memorable!

As the marketplace continues to become more competitive, we are all challenged with how to build deeper and more meaningful relationships with our customers. How do you combine the five senses to create an experience that builds a lasting and meaningful memory for your customers? I remember a quote: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” I am thankful that we get to play a role in the memories of this industry, and I look forward finding new ways to make new memories of success with you all.

Patrick S. Adams Publisher/President padams@building-products.com

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Building-Products.com

OnE On One With Roelif Loveland, President, Maze Nails

Maze Nails driven for over a century M

AZE N AILS has managed to remain afloat as a successful nail manufacturing company while staying true to its promise of highquality products for over 100 years.

Merchant Magazine publisher Patrick Adams toured its 93-year-old factory in Peru, Il., with Maze president Roelif Loveland. As the two strolled through the 1922 building, Loveland touched on the history of Maze as well as the importance of quality over quantity, a strong work ethic, and how customer loyalty is crucial.

ROELIF LOVELAND

It may surprise some people to know that Maze Nails was not always just a nail company. In 1848, founder Samuel Nesbitt Maze started a lumberyard along the edge of the Illinois River. Unsatisfied with the staining and streaking caused by the cedar shingle nails they had to sell, the

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Maze brothers secured a cut nail machine in 1886 and started making pure zinc nails. As the zinc nails began to take off, word spread about their new venture and soon other dealers arrived, insisting that the brothers make the nails available to them too, thus turning their lumberyard into a nail enterprise. In 1922, the brothers were making so many nails, they moved into the factory where the company still resides today.

“Maze Nails has always been a company filled with extremely capable people—in the factory, in the office and out on the road. They know what needs to be done—and they do it,” said Loveland, when asked if he ever felt the weight of running the business, being as old as it is.

“We’ve been hiring new talent to the company—including several sixth generation Maze family members— and they are meshing nicely with us ‘old-timers.’

“It’s always been our mission to keep providing quality made-in-theUSA nails—dependable, well-made nails that will do the job.”

Maze Nails has made a presence as one of the country’s leading nail providers, through the good and the hard times. By World War I, the company set its sights on the goal of creating an economical steel core nail, which provided dependable corrosion resistance and drivability.

The company also managed to keep itself afloat through WWII, when the country was experiencing a metal shortage.

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“Our buyers back then had to scrounge high and low for both steel wire and the zinc to galvanize the finished nails. We’ve purchased topquality steel from Keystone Steel and Wire for many decades—so I’m sure that being a loyal customer of theirs back then paid off during times of shortage,” Loveland explained.

The Maze men continued to push the company forward as a nail manufacturer, experimenting with electroplating, tumbler, and hot-galvanizing nails, and built a unique, fully-automated zinc coating system trademarked at Stormguard.

Today, over a century later, Maze manufactures nails for worldwide distribution. The Maze Lumber yard is still in business and is the oldest lumber dealer in the state of Illinois. The company has not only made a name for itself as a leading nail manufacturer, but also a loyal employer—and what makes them stay?

“A lot of our employees arrived here well before I started. We are a small but mighty company where every person makes a significant difference. Our people know that and it really brings out the best in them.

One of the things we love to do is we put customer compliments on display, and amazingly we get a lot of them. I think that’s huge in getting these guys to realize how important quality is. Also taking people through our mill, and giving them a chance to explain what they’re doing is really important to them. The feedback we get drives them to realize our business Building-Products.com

SINCE 1922: Merchant Magazine publisher Patrick Adams toured Maze Nails’ factory in Peru, Il., with president Roelif Loveland, the original windows still in tact. The building, which currently still resides at the orignial 1922 location, still serves as Maze headquarters today. Plans are in the works for a refurbishment for the 93-year-old facility.

is important.”

Like most businesses, the market downturn in 2008 affected Maze, and the company had to take measures to weather the storm.

“We ran into some scary times. We made some fairly significant changes in our staffing during the downturn— and got lean (but not mean). I also steadfastly believe that there is no other nail maker with the same extreme, high level of customer service,” Loveland said.

“It’s all a scary time. Business has never been so difficult. There’s been some anti-dumping against the Chinese. Our problem with that, while it sounds good and we generally support it, is the price of the Chinese nails is so low that even if they place 100% tariff on the Chinese nails, it doesn’t make any difference in our business.

“Times have definitely changed, but we just keep moving forward, produce the highest quality products we can, and stay close to our customers.

Our products continue to be a huge factor in setting us apart from the rest of the industry—both the quality of the products and the sheer variety that Maze can offer to a lumberyard.”

Despite the amount of competition in the industry, the company has been able to stay well connected with the marketplace and the needs of their customers.

Nails are a product that appears so simple, but with over 2,800 SKUs, the company is far from simplistic. Every single one is unique for a specific Building-Products.com

application, and Maze has a unique story in that it’s one of the last nail companies standing in America.

“We always like to keep our employees happy and excited. We want them to know how unusual it is that they’re an American nail maker and we’re still in business,” said Loveland when asked how he makes this work.

From the outside, it may look like we are competing with China but we really aren’t. They are the low end.

We strive for the high-end business and there are people who want the high-end product.

If there are 20 people buying nails at Home Depot, I might get one of them, maybe not any that day. But the ones who are going to get the good quality nails will pay good money for them and I can spread good money amongst our people.

We can’t compete with the Chinese and that’s really what drove a lot of the other nail companies out of business. They were trying to compete with the Chinese, and they would continue to lower their value, the product quality suffered immensely, and their margins were horrible. It’s almost a matter of putting blinders on. You’ve got to play your own game.”

Looking forward, Loveland is focusing on the quality of their product, making sure his customers as well as his staff are well educated and up to date with the latest industry news.

“We’re constantly working with the market to find the next need so we can

stay ahead from a product perspective. I believe that the construction industry will continue to use nails in both hand drive and pneumatic format for decades to come, so there’s plenty of opportunity for a quality, domestic nail maker like Maze.”

Educating the marketplace is also extremely vital to the business.

“That’s a big issue now because a lot of the labor is foreign, some don’t speak English, and the bridge of communication is not as sturdy,” explained Loveland.

“So if you have a situation where they’re getting hired to do a big siding job for a complex, he’s looking for the lowest priced siding, the lowest priced nails. He’s getting paid by the square, so he’s going for the lowest cost, and

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because of the communication barrier, it makes it more difficult.

“Our mission is to get to consumers, using our website as a tool that we’ve been constantly updating.

Any way that we can try to get to that eventual consumer is really good.

Unfortunately that’s the expensive route.”

As times have changed over the last decade, Loveland is working to make sure Maze is keeping up with the evolving industry, staying well connected with retailers and distributors.

“The main benefit of being on the phones all day and at dozens of trade shows is that Maze Nails is very wellconnected—and is regularly contacted by makers of building products that require new and unique fasteners.

We’re asked to design the most effective nails for their new materials—and that gets us a jump on the market.

We’ve got about 45 outside sales reps throughout the U.S. They are in retailers every single day, telling our story.”

As president and fifth generation to founder Samuel Nesbitt Maze, Loveland was destined to be a part of the business, but didn’t necessarily expect to be growing up.

“I got out of college with a degree in geology and there was a lot of opportunity in Texas. As I was putting out resumes that way, our advertising manager quit.

“I was lucky to have a dad who never put pressure on me. So when a job became available, I gave it a shot,” explained Loveland, tears welling up in his eyes.

OVER 100 YEARS ago, the Maze brothers were tired of the staining and streaking caused by the nails they had to use, driving them to invest in a cut nail machine, the start of Maze Nails.

“There are forks in life, and I happened to pick the right fork. It’s been an absolute pleasure. As we get older, we realize what’s important in life.”

When asked if he could offer one piece of wisdom to the industry, Loveland replied: “Keep your eye on the ball with what it is your customers need. Even if they don’t appreciate the quality at the time that they’re paying for it, they’ll

appreciate it 50 years from now when their siding looks beautiful, and their next-door neighbors have stains and streaks, wondering what happened.

“In a lot of ways, we protect people because they don’t know. We can’t know everything that goes on around us. We need manufacturers that can protect us. When you climb in your car, you trust that someone did a good job manufacturing that airbag, don’t you?”

PURE ZINC: When Maze started making pure zinc nails, it caught the attention of other dealers and word began to spread. The nails were favored primarily due to their strong protection and durability.

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Building-Products.com

MAnAGEMEnT Tips

By Stephanie Stern, StopWaste

Green purchasing:

4 steps to get started

CENTRAL HUBS, such as Quantity Quotes, connect green buyers to bulk suppliers.

P

URCHASING ECO-FRIENDLY building materials and supplies can mean long-term financial savings and a reduction of carbon emissions—a win-win for both consumers and the environment. But with so many choices, and so few centralized resources, it can be difficult to identify which products are really the best for your company.

Here are four easy steps to help you develop your own green purchasing best practices:

• Take stock of your current purchasing practices. To understand where you should improve, you must first understand what your organization purchases and where your money is going.

Review the items you are currently buying and their total costs, paying close attention to materials your company is most likely to replace and if they meet certain environmental and energy efficiency criteria. An easy place to start might be with energy-efficient lighting, including compact florescent lights or LED bulbs and light fixtures, or insulation.

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• Make comparisons between your current practices and green purchasing goals. Now that you’ve done your homework, it’s time to evaluate the gaps between where you are and where you would like to be. Talk to your suppliers and manufacturer reps. Ask them what makes their products sustainable. This will help you analyze what changes can be made in your purchasing practices.

As you compare current practices and ideal practices, you may reveal trickier aspects of meeting your goals with regards to both budget and demand.

• Identify products that satisfy your new criteria. Once you’ve determined what your company can accomplish, it’s time to dive into the array of products available to suppliers. This can be challenging, particularly because there are few central hubs that connect buyers to bulk suppliers.

Quantity Quotes (quantityquotes.net) is one such hub that makes finding and selecting green and energy-efficient products easy. The site allows buyers to make quick price comparisons between large quantities of green, Energy Star and WaterSense qualified products. It even provides a channel for buyers and suppliers to engage in direct negotiations for discounted prices. There are other options in the market as well.

• Draft an environmentally preferred purchasing policy.

After taking stock of existing products and materials, making comparisons and identifying products that are sustainable or green, it’s time to draft your policy.

Drawing up your action plan can be accomplished in a number of ways, depending on your company’s environmental goals. Perhaps a five-step incremental process makes the most sense for your budget, or you might choose to focus your efforts on one specific aspect of green building, such as recycled materials or energy efficiency.

There’s no need to reinvent the wheel. You can incorporate existing standards, such as the Energy Star label for energy-efficient products and the WaterSense label for water efficiency, and reference these in your policy.

Whichever way you decide to green your purchases, be sure to set specific goals that are both reasonable and measurable.

By using the above steps as a guide, as well as available online tools, you can get started on a path to creating your own environmentally preferred purchasing policy.

– Stephanie Stern is a program manager at StopWaste.

Building-Products.com

MARGIn Builders

By Rick Kapres, Versatex

Build trust, market share by sharing PVC trim expertise with builders

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F YOU’VE EVER

wondered whether distributor-sponsored demonstrations for builders are worth the trouble, just check in with Steve Kramer of Riverhead Building Supply or Joe Cracco of Modern Yankee Builders.

USING PVC trim for an exterior frame-andpanel system dodges the pitfalls of wood, such as joints and edges that could trap water.

(All photos courtesy Versatex)

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Recently we asked these two veteran professionals to talk about what each has gained from product-oriented training, and to illustrate their observations with stories about a specific class of products—exterior mouldings and trim made from extruded PVC. “It’s always a good idea to make sure customers know how things work,” said Kramer, a purchasing agent at the Calverton, N.Y.-based distributor. “Just from a standpoint of self-preservation,” he said jokingly, “we like to sell things that stay sold.

So it’s in our best interest to help people understand the product they have to install. Otherwise, we’re the first to hear about it if anything goes wrong.”

On the other hand, Cracco—owner of the Cumberland, R.I., design/build remodeling firm—says he appreciates being on the receiving end of product demonstrations. He recalled many installation demos, at JLC Live New England in Providence, R.I., and at the Remodeling Expo in Baltimore that planted solutions in his mind before he ever knew he’d need them.

“When you’re working with trim, you run into two kinds of challenges,” he said. “The first is pretty straightforward. You see places on a house where conventional trim materials get exposed to a lot of water, and tend to rot pretty quickly. The homeowner doesn’t want to hear about maintenance, so you look into alternatives.

This has grown into a major concern over the past several years, but early in the game I was prepared for it.”

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He said he remembered more than one distributor-sponsored demonstration introducing PVC trim, and so he already knew how it behaved when he spotted an opportunity to apply it.

“For example, we were taking the concept of a Shaker-style frame-andpanel wainscot and installing it outside the house, a situation that would never really work well using wood.

The joints and edges would trap water, and then you’d have swelling and leaking issues.

“Instead we built it from PVC components, and it was absolutely wonderful. After more than a decade you still have this impervious siding effect around three sides of a structure that’s held up to severe weather exceptionally well. It was actually very easy to build, even though the result looks like you spent a ton of time putting it together.”

The second type of challenge, he noted, can pop up after you’ve committed to PVC, and then find you have to execute a tricky piece of design. “We were working on a project that called for an arched moulding over a window. It looked good on paper, and with enough time and budget, a millwork shop could have assembled it out of wood.

“But could we get the same effect, working in the field, with PVC? Yes, we could. I remembered another demo that showed how, with a little bit of heat, you can do things with PVC that are impossible with wood.

(Continued on page 64) Building-Products.com

FEATURE Story

By Geoffrey Card, GPI Millworks

A new material world greets millwork industry

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T ’ S A FAST developing world. We live in an era of rapid technical advancement, particularly in the field of material science. What industry are you working in?

Twenty-five years ago you probably would have responded, “I am employed in the millwork, window and door industry, and design and fabricate products from wood.” Others from our industry would have answered “aluminum” or even “vinyl.” Today this would be inaccurate—with few exceptions we are no longer in a material-specific industry.

Some market-leading millwork manufacturers still promote their image as being wood products fabricators when in reality they use nonwood modern hybrid materials for a large percentage of their products.

Industry forecasters still tend to define market statistics and market share in terms of material types such as wood, aluminum, vinyl or fiberglass, which can be misleading.

This fundamental advancement in material usage is not confined to the millwork industry. Automobiles used to be almost exclusively constructed from steel; today, composite plastics, ABS, aluminum and other advanced materials are used in large volumes.

One of the most dramatic advancements has been in the aircraft industry.

The airframes of commercial aircraft have historically been fabricated from aluminum but Boeing is now leading the way forward by constructing the fuselage of the new 787 Dreamliner from high-tech plastic composites. In the immediate future you will be traveling in a “plastic” tube rather than an aluminum one!

What has driven this fundamental change in material use? In transportation, the driving factor (apologies for

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the pun) has been the need to save energy by making significant savings in the weight of both automobiles and aircraft.

The millwork industry in general has been influenced by many factors including energy-saving regulations from federally inspired organizations

FIBERGLASS PULTRUDED profiles offer similar advantages to vinyl plus added advantages for the construction of windows and doors.

(All images courtesy GPI Millworks)

such as the NFRC and specifically from consumers who increasingly demand products that do not rot and products that eliminate the need for regular maintenance such as painting and staining.

Structural codes are also being revised and products are required to withstand the worst that nature can impose. Compliance with all this demands the adoption of modern,

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high-performance materials with superior structural strength capabilities.

Modern efficient manufacturing methods have also demanded the adoption of more consistent modern materials.

The U.S. residential window and door market divides into two principle sectors—new construction and remodeling/replacement. As large as the new construction sector is, it is important to realize that the replacement sector has for many years been larger in terms of both product unit volume and sales value.

Homeowners are motivated to spend more on their window replacements than the builder could justify at the time of original construction.

Homeowners are motivated by energy savings, cost and inconvenience of regular maintenance (pride of ownership), sound reduction, and by comfortable living conditions, not to mention the value of their property. They will spend more for high-performing products that meet their requirements, and this motivates many of the industry changes to modern materials.

Today’s industry doesn’t generally design and manufacture all the multiplicity of components used in its products. All industries, including millwork and windows, work closely with component designers, manufacturers and suppliers. Component suppliers have been responsible for introducing many of the modern hybrid materials such as vinyl/aluminum door threshold, vinyl tray panels, fiberglass pultruded pre-assembled French door astragals, fiberglass reinforcing members, weatherproofing systems, extruded cellular door frame and window profiles, and more.

Demands from consumers for maintenance-free, thermally improved window and door systems drove the Building-Products.com

dramatic development of the vinyl (UPVC) markets in both Europe and North America. Vinyl window and door products were not generally designed and developed by specific window fabrication companies but grew from the vinyl extrusion industry who realized a market-driven opportunity, employed window and door systems designers and licensed regional manufactures to fabricate and market their products. Systems support was given in the form of lineal vinyl extruded material supply, technical training, technical manuals, product testing, and national marketing.

The residential vinyl window market share in the U.K. and Europe grew through the 1980s to exceed 70% of the market and in the U.S. in the mid1990’s rapidly overtook all other materials to dominate the residential markets. This growth was reinforced by a great deal of industry investment in the development of both material and performance standards for vinyl products principally by the industry members of American Architectural Manufacturers Association and by like organizations in other countries.

Even vinyl windows and doors have their disadvantages. Vinyl needs

Building-Products.com

COMPONENT SUPPLIERS have been responsible for introducing many of the modern hybrid materials such as fiberglass pultruded preassembled door astragals, designed much like this rendering of GPI MIllwork's all fiberglass Tastragal with double woolpile.

profile reinforcement for the construction of larger unit sizes. It also has a fairly high degree of expansion in hot climates. This is why the vast majority of extruded vinyl windows and doors are marketed in white-colored finish.

Solutions to this weakness are becom-

ing available with major advancements in the processing and pultrusion of GRP –fiberglass.

Fiberglass pultruded profiles have similar advantages to vinyl with two additional advantages for the construction of windows and doors. Firstly, profile to profile they have a section modulus (rigidity) on average of eight times that of the equivalent vinyl profile. Secondly, they are reinforced with thousands of glass strands which have no measurable expansion or contraction when subjected to extreme temperature variation.

The practice advantage of all this is that the window/door designer can eliminate the use of profile reinforcement and use very dark color finishes in the hottest southern climates.

The use of modern synthetic materials will continue to increase in our industry to everyone’s advantage. My forecast is that the adoption of pultrude fiberglass profiles and complete fiberglass product systems will dramatically gain market share over the next few years.

– Geoffrey Card works as a consultant for GPI Millworks, Atlanta, Ga. Reach him via www.gpimillworks.com.

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COMPETITIVE Intelligence

By Carla Waldemar

Spahn & Rose makes new home for the future

T

you can count on in today’s business world is that you can’t count on anything. So, change with the times or wave as the winners fly by.

Dubuque, Ia.-based Spahn & Rose had been founded by a couple of young go-getters back in 1904. A hundred years later, however, it was still operating on the same, long-ago outmoded site. But, change came knocking. Upon the sudden death of Chuck Spahn, for the first time in the corporation’s history, the new CEO and president selected was a non-family member. John Hannan had signed on with the company in 1991 and by 2002 had worked his way to the corner office.

Hannan proceeded to color outside the lines on occasion, viewing his outlook as “a little more aggressive in updating facilities.” (S&R owns 25 yards radiating from the corner of the Midwest where Iowa, Wisconsin and Illinois meet.)

“Aggressive” is an understatement for what that mindset led to—a dramatic change from the aged, unwieldy facility of 1904 to a brand-new mothership, in a new location and built from scratch.

It opened in April, but the planning had begun a good five years earlier: machinations almost as complex as the Invasion of Normandy. First off, it was important to document for the board the many factors that proved the project a sound decision: The 1904 site was hard to find, inconvenient to access, and far from any high-traffic retail area. No HE ONLY THING

FAMILY TRUST: CEO John Hannan looks over Spahn & Rose’s latest rebuild, in Dubuque, Ia.

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off-street parking. No room to expand to meet customers’ clamor for more choices. Its warehouses were separated by city streets and insufficient for demand, requiring leasing other off-site buildings. The city’s recent street improvements sacrificed direct rail access, eliminated access to loading docks, and imposed trucks’ weight restrictions.

Bottom line: inefficiencies were stunting growth in market share and customer service. Options? The choice was clear.

The first step, natch, was choosing a new site. (Even crossing the river into Illinois or Wisconsin was under consideration). Hannan hired an engineering firm to weigh in on the most efficient uses at potential locations, and conferred with the city of Dubuque about possible financial incentives. The winning site selected provides much greater visibility and access and adjoins retail operations that already drive traffic, including a busy supermarket.

Site? Check. Next up, design. Hannan and his team criss-crossed the country visiting other yards to gain input on what worked, what didn’t. The lessons they gleaned included how best to display products. “We learned that the best way was to make things look professional. Classy. We also learned we needed to have a wide variety of products right there inside the showroom, not merely in catalogs or on the Internet. We learned where to best position the sales staff within the showroom with easy access (answer: dead center), and to position items like millwork and cabinets around the perimeter.

“We also asked our staff for input early in the process.

For the outside, we showed them the architectural drawings with potential floor plan and loading dock. And for those working inside the showroom, evaluating how departments could interact. In hardware, what items to add and what size of a work area. We also showed the architects the photos we’d taken on our travels. Then the architects interviewed our employees as to their likes, dislikes, and needs.

“We got the engineers involved early as well, as to the best possible layout.” Engineers also helped with solutions that affected the environment. “The site contained a building that was not well-situated, so a local outfit tore it down, piece by piece, and re-assembled it elsewhere. We had the site’s concrete and asphalt excavated, crushed, and re-used as sub-base. Nothing,” Hannan proudly stresses, “nothing was hauled away.”

The new building operates on sensor-activated LED lights and the showroom not only sports solar panels to collect energy, but a huge computer screen indicating to the staff and fascinated customers just how much is being produced, moment by moment.

Building-Products.com

BEFORE & AFTER: Store went from standard (at left) to showplace (above).

Result: a new 72,000-sq. ft warehouse with Sunbelt racking to allow maximum storage space, six drive-thru lanes, and three loading dock bays. The new showroom, with 28,000 sq. ft. on the main floor and a mezzanine hosting badly needed offices and conference rooms for contractors and their customers and employee training sessions.

(Before? None of the above.)

“It’s easily the nicest, most professional showroom in our area,” Hannan can boast, going above-and-beyond not only with additional SKUs throughout, but consciously adding items to increase walk-in, retail traffic. “Lots of people thought we only served contractors,” he realized, then set about to change that perception. Pros do provide 70% of the mix, but Hannan realizes that “homeowners are driving a lot of the decisions. Now they can come in, get ideas, and talk to our people.”

And these homeowners love-love-love the star of the showroom, a complete 1,100-sq. ft. model home. “We built it as large as possible, to incorporate a wide variety of brands and colors, and it’s been a very effective selling tool,” he reports.

So has S&R’s building itself, and by savvy planning.

The exterior has become a marketing billboard, employing “many products we actually sell, like siding, stone, columns, and shingles. Down the line, if someone asks how Product X will look in five years, we can send him outside to see for himself.” Vendors, of course, are delighted with the showcase effect. “It shows them we’ll make a commitment to their product.”

And staff? “We started training well ahead of the openBuilding-Products.com

ing. We told them, ‘Expect a lot of new customers to walk in the door.’ (Pros at last have their own separate entrance, too.) We knew we needed to train our people to be prepared for the opportunity to gain a lot of new customers.”

And it’s working. Business is up 20% over last year, aided, also, by a smart publicity campaign leading up to the Grand Opening. “In our old store, we posted architectural drawings of the new building to build excitement in the community. We used teaser ads on radio, in print, and in our statement stuffers. And when the warehouse was completed, we held our monthly contractor lunch in that new location, plus gave them a tour of the new showroom under construction. That really got them excited!” he reports. The grand opening for the community featured a promotion offering a free grill with purchase of selected decking.

“That idea generated a lot of new business,” Hannan reports.

But you won’t catch him with his feet up on his desk.

The region’s big boxes and strong independents are breathing fire nearby. “What makes S&R better?” a reporter posed. Says the boss, “We have a larger number of experts in product knowledge and customer service. A larger inventory, due to our financial strength. A new showroom with nothing like it around. And,” underscoring all of the above, “a history. Being in business since 1904 adds credibility. They trust that you’ll do what you say you’ll do.”

So, what’s ahead? Perhaps yet another change. The company’s website states that Spahn & Rose prefers penetrating small markets. But, says the CEO with confidence, “going forward, that may change, too. We have plans and hopes for growth.”

Carla Waldemar cwaldemar@comcast.net August 2015

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FOREST Economics

By Paul F. Jannke

Lumber inventories point to market rebound

I

NVENTORIES ARE A key indicator of market balances. One of the most closely watched markers in the oil and gas industries, for example, is the weekly natural gas storage and the Cushing, OK ending stock reports. By contrast, information on the ebbs and flows of lumber stocks is largely lacking.

To get a sense for supply/demand balances, intelligence on stocks at two levels in the supply chain would be desirable: at mills, and between mills and final users.

Unfortunately, data collection of lumber stocks at the mill level is sketchy and, if done, tardily disseminated.

Mill inventories in Canada are compiled by Statistics Canada, but are reported with a lag of about two months.

In the U.S. South and Northeast, they are not collected at all. Only the Western Wood Products Association gathers mill inventory data in the West from a sample of firms which they publish weekly.

Data on stocks between mills and end-users are even sparser. Each month the Census reports inventories for “merchant wholesalers” including “lumber” (NAICS 4233). The data for March 2015 was released on May 8, but is of limited utility because the number is not differentiated by product (i.e., lumber, plywood, millwork etc.), nor given in volumetric measures. Rather, they are based on dollars unadjusted for price changes.

Within the industry most insights on inventory conditions are based on hearsay. Only Random Lengths attempts a quantitative description of retail stocks based on a subjective index of inventories supplied monthly by a sample of their retail correspondents.

For inventories between mills and end-users, the ideal means to get such data would be by way of regular statistical surveys. That being beyond my means, I have developed another way based on two measures: volume flows into and out of the distribution system.

The accounting framework to track and systematically update estimates of inflows and outflows is summarized in

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the table above.

The variables for outflows are compiled from the regular Census reports that track the economy such as housing starts, the average size of homes, value of construction put in place and so on. The weakest link is residential remodeling. Originally I used the estimates from the Harvard Joint Center for Housing Studies, but later supplemented those with data on remodeling permits compiled by Buildfax and monthly retail sales by “Building material and supply dealers” (NAICS 4441) reported by the Census.

For the usage rate in each of these sectors, I obtained Building-Products.com

estimates from various U.S. Forest Service and industry market tracking studies. Those factors can change and thus a check on their validity is that over several years encompassing a business cycle the grand total of estimated end use should approximate apparent end use (shipments plus net imports). To the extent that they significantly deviate, I adjust the factors periodically to bring the two into line.

I track inflows into the distribution chain from daily reports on Canadian exports into the U.S. and by projecting U.S. lumber shipments using proxies from weekly WWPA shipment data and rail traffic. The import estimates have an error range of less than 0.5% while the shipment variability, as compared to final WWPA tallies, is +/- 2.5% (chart 1). The current data I estimate are found in the weekly tables printed in bold face.

series represented by the shaded portion.

It illustrates a bulge in field inventories that began in late 2014 and continued into the first quarter, which offers insight for the market swoon in the first third of the year. It also shows that if the recent trend of production restraint is maintained and the housing recovery proceeds as we expect, then by June the inventory overhang should have corrected and returned to well within its historical range.

By way of contrast, the Random Lengths index is similarly shown:

Chart 3

Random Lengths Retailer Index – Range v. 2014/2015

Chart 1

Preliminary v. Reported U.S. Shipments

Validation of the estimates of the flux in stocks cannot be made since there is no systematic collection of such data. I have no illusions that the numbers would match point estimates from a comprehensive census if such were made but I believe they track the general trend in inventory changes. They have been helpful to me to gain insight into aggregate inventory fluctuations and certainly more useful than the repertoire of adjectives used by market journalists to describe the state of inventories as “lean” or “flush,” “tight” or “adequate,” etc.

Chart 2 borrows the technique from the Energy Information Agency to depict these derived inventory estimates in a historical context. The data represent inventories-to-end use (equivalent to inventory in terms of months of current sales). The recent year’s data are placed within the historical range of high and lows experienced for the

Chart 2

Inventory/End Use Ratio – Range v. 2014/2015

Bottom line: High lumber inventories in early 2015 led to weak pricing through April. Recent production curtailments and increased consumption has pushed inventories back to more “normal” levels. Consequently, we expect rising pressure on prices in the third quarter.

(The above analysis was taken from Henry Spelter’s Lumber Market Status and Trends (LMST), a weekly publication of FEA. In it, Spelter describes how Forest Economic Advisors estimates inventories, a very important indicator for market direction. For more information on subscribing to the LMST please contact David Battaglia at dbattaglia@getfea.com.)

– Paul F. Jannke is a principal of Forest Economic Advisors LLC (www.getfea.com), the premier source for North American wood products analysis and information. With 20 years’ experience studying lumber markets and providing reliable, insightful forecasts, he has become the industry’s top economic analyst. He is the author of FEA’s Lumber Advisor and Lumber Quarterly Forecasting Service publications.

Paul F. Jannke Forest Economic Advisors, LLC (978) 496-6336 pjannke@getfea.com Forest Economic Advisors, LLC (www.getfea.com) offers: • Monthly reports (a two-year forecast including demand, capacity, market conditions, and prices) • Quarterly longer-term forecasts (lumber, EWP/MSR, structural panels, particleboard/MDF, timber, wood biomass, market trends) • Weekly reports analyzing the spectrum of current market variables that affect lumber markets • Capacity reports on lumber, LVL, I-joists, PSI, LSL, plywood/OSB, particleboard and MDF • The industry’s most comprehensive historical database • Client research, consulting and speaking engagements

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Inspection Agency Opens for Western Treated Woods

Southern Pine Inspection Bureau has launched a new third-party inspection agency in the western U.S. Western Wood Services, a division of SPIB, is offering western treaters an option in inspection services for their residential treated wood products.

“We are accredited for all the West Coast species. Our primary focus is on treated wood,” noted SPIB’s Steve Singleton. “Technically, the West Coast rules writing agencies (WWPA and WCLIB) are considered competitors; however, neither of them do treated wood inspections. So this is a new service for us in response to West Coast treaters expressing interest in SPIB.” It is accredited by both ALSC and IAS for the inspection and labeling of production under AWPA and ICC-ES programs, respectively, and is a member of WWPI. WWS has no plans to open an office in the West at this time. The work will be done by SPIB’s western region field representatives.

The division manager is Kim Merritt, who is based at SPIB’s

Pensacola, Fl., office. The SPIB laboratory will be utilized for all analytical services.

Nevada Losing True Value

Unable to find a buyer for his business, Gordon Johnston intends to shutter Carson City True Value, Carson City, Nv., by the end of the month, when his lease expires.

Johnston, 73, has operated the store for the last 16 years. It opened 45 years ago as a Coast to Coast Hardware franchise.

Johnston is also selling his interest in J’s True Value, Yerington, Nv., to his business partner—his son, who also manages the store.

Capital Buys James Plywood

Capital Lumber Co., Phoenix, Az., has agreed to purchase the assets of James Plywood, Salt Lake City, Ut. Capital will integrate the James Plywood operations into its own Salt Lake City location over the next few months.

The acquisition, expected to be completed by the end of July, will add such products as particleboard, MDF and plywood to Capital’s offerings.

Capital’s branch manager in Salt

Lake City, Tracy Madsen, said, “James Plywood and its founder Jim Archuletta have a stellar reputation in this market. We will do everything possible to continue to be responsive to the market’s needs accordingly.”

James Plywood has serviced retail lumberyards and industrial accounts in the Utah market with specialty hardwood and softwood plywoods, particle board, MDF and lumber products since 1989.

Eco Moves Oregon Operation to Port of Tacoma

Eco Building Products, Vista, Ca., has relocated its Salem, Or., coating operation to a larger, rail-served facility at the Port of Tacoma, Wa. The Port, according to Eco regional VP Nathaniel Bruce, has “been very accommodating of our planned need to expand. We were adamant that we have the facility laid out in a manner that when the time comes in early 2016 to add an automated line, we can simply bolt it down and go.”

A paint line is also in the final stages of assembly and should be up running by the end of the summer.

DEALER Briefs Builders FirstSource, Dallas, Tx., has received all third-party and governmental approvals required for its acquisition of ProBuild Holdings, Denver, Co., clearing the way for the deal to be completed by early August.

Orchard Supply Hardware

has opened a new 36,000-sq. ft. North Beach location near Fisherman’s Wharf in San Francisco, Ca. A grand opening was held Aug. 1-2.

Home Depot is buying mainte-

nance/repair

service

provider

Interline Brands, Jacksonville, Fl.,

for $1.625 billion.

Habitat for Humanity opened an 11,000-sq. ft. ReStore discount LBM outlet in Concord, Ca. Habitat has also found a new location in Jackson, Wy., to at least temporarily replace its local ReStore , which was gutted by fire in April.

In the meantime, the facility continues to collect donations to rebuild its inventory, although manager Dan Buchan recently resigned.

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Building-Products.com

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Withers Reopening NorCal

Wayne Withers has acquired the mothballed assets of NorCal Lumber, Marysville, Ca., and will restart the operations by the end of August.

Prior owner Don Miller, who founded the company in 1987, mothballed it in 2009. “They had every intention of reopening, but the economy didn’t cooperate,” Withers explained.

Fortunately, the site and equipment have been well taken care of, and should require only a few weeks of

updating to get up and running again.

The purchase included all assets, including real estate, machinery and the NorCal name. The 43-acre LBM distribution facility will produce wall panels, trusses, engineered floor systems, and pre-cut framing packages.

Withers, CEO of West Coast Framing, Milpitas, Ca., and formerly a VP with BMC and president of Golden State Lumber, will serve as president and CEO of NorCal, supported by Steve Smithers as chief operating officer and Dave Moon as VP-operations.

Capital Expands Denver DC

Capital, Phoenix, Az., has more than doubled the size of its Denver, Co., distribution operations by adding a contiguous nine acres with a 35,000sq. ft. warehouse to its existing sevenacre site and 36,000-sq. ft. warehouse.

The additional property will allow the company to expand its service model with products that serve the retail segment with the level of customization and responsiveness that they have been accustomed to receiving from Capital.

The Denver branch inventories a diverse product mix, including redwood, engineered wood products, fiber cement siding, western red cedar, spruce, pine, Douglas fir timbers, treated products, and composite decking and railing.

Services include daily delivery schedules, bar coding, special packaging, special milling, special pattern runs, and EDI capability.

SUPPLIER Briefs SRS Distribution, McKinney, Tx., has added a Roofline Supply & Delivery branch in Provo, Ut. Managed by Eric Thomas, the facility will service the southern Wasatch Front and Utah County, working closely with Roofline’s existing location in Salt Lake City, Ut. Capital Lumber is now distributing CableRail stainless steel and DesignRail aluminum railing systems from Feeney, Oakland, Ca., to dealers in California, Utah and Arizona, from its DCs in Healdsburg and Chino, Ca., and Salt Lake City, Ut. Capital has also redesigned its website, www.capital-lumber.com.

Midwest Floor Coverings, Salt Lake City, Ut., is now distributing DriTac’s flooring adhesives and tools across Utah, Colorado, Idaho, Wyoming and Nevada.

WC Tingle Co., Denver, Co., continues to be a DriTac distributor for Colorado and Wyoming.

CertainTeed Gypsum agreed to purchase drywall corner manufacturer Structus Building Technologies, Bend, Or. Calculated Industries, Carson City, Nv., acquired the Blind Mark line of magnetic electrical outlet locators.

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Building-Products.com

THInKInG Ahead

By Bethany Doss, Capital Lumber, and NAWLA Board Member and Anthony Luongo, Capital Lumber

EDI:

What it is and how it can help you

E

DATA INTERCHANGE (EDI) is the transfer of data from one computer system to another by standardized message formatting, without the need for human intervention, according to Tech Target. Simply put, it’s a way for businesses to exchange information such as invoices, purchase orders, etc., electronically.

While this may seem like a complicated process—and, to an extent, it can be—implementing an EDI solution can increase a company’s efficiency and profitability, as well as create more consistency and streamline administration processes in document communication and management.

LECTRONIC

Benefits

One of the biggest advantages of EDI is the efficiency it allows. Because transactions can be processed immediately, staff members save time on entering data manually.

This also reduces the chance for human error and the cost to send paper materials such as invoices, shipping orders,

Learn from Your Peers Join a NAWLA 10 Group

NAWLA 10 Groups are networking forums of about 10 members with like interests (from non-competing firms) who get together in an informal setting to connect about issues that they face and to reflect on how to positively impact their organizations and the industry.

Exploring EDI? NAWLA will be creating a 10 Group specifically for IT professionals. To learn more about NAWLA’s 10 Groups, visit nawla.org/page/10-Groups.

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etc., via postal mail.

In addition, EDI can enable more accurate accounting and inventory management, as well as help increase team productivity without increasing staff.

EDI also allows for the successful transfer of knowledge, providing consistency throughout the documents shared between trading partners. If an employee is out of the office or leaves the company, the knowledge stays automatic and operations can proceed as usual.

If you’re interested in working with a big box retailer, using EDI is basically a mandate. Through this technology, big boxes are able to control their costs and their pricing at a much higher level. And since the turnover within retail can be high, EDI ensures that the orders you’re receiving are accurate.

Implementation

When deciding to implement EDI software, it is important to decide what exactly you want to do with it.

Building-Products.com

A Special Series from north American Wholesale Lumber Association

EDI Quick Facts

More and more companies are trending toward using an Electronic Data Interchange (EDI) solution to improve productivity, increase profitability and position themselves as a more viable partner when working with big box retailers.

Here’s a snapshot of some EDI basics, if you’re exploring implementing this technology soon: • EDI can replace the mail prep process, as well as the sharing of information via fax and email.

• It can save on costs in the following areas and more: data entry by staff and the correction of human error, mailroom sorting, transportation/ freight expenses, printing, distributing and storing documents, as well as postage for mailing.

• There are a number of business documents that can be transferred electronically using EDI, but the most common ones are invoices and purchase orders. With most EDI software, you can customize to tailor to your company’s needs.

• Having an EDI technology solution can also help in improving relationships with customers because order information is readily available and accurate.

• Plan in advance when thinking about implementing an EDI solution. While this may seem like a three or four month process, it could take up to a year for implementation, depending on the complexity of the system.

• Ensure you have a network of professionals or friends you can reach out to in order to troubleshoot any issues that arise with the EDI solution.

• While EDI creates ease of document management and communication, there can be some complexities that come along with it. Having a thorough understanding of the technology will be very helpful throughout the process.

How do you want to use it? Do you want a custom solution? Will you use an outside vendor? How complex in your tracking do you need to you get?

No matter the specifics in how you’ll use it, there are two main things you need to consider: implementation time and your troubleshooting network. If you’re planning to do a major EDI implementation with a customer or supplier, it could take between nine to 12 months. Yet

Building-Products.com

don’t let the timeframe scare you away. If EDI is something you need to do in the next two years, start planning now. The more you are ahead of the game, the better off you’ll be.

It’s also important to make sure you have people in your distribution network who have gone through the implementation process. Though EDI is beneficial to an organization in many ways, it does come with its challenges. There are some complexities when implementing a solution and though the technology is simple, in theory—it’s taking data from one system and putting it into another—the templates, forms and testing process can get pretty complicated.

Having people you can troubleshoot with—people who have possibly experienced the same issues—can make a difference in easing the overall process. Capital Lumber uses a third-party company for its EDI solution for this reason—it’s helpful to have EDI specialists to reach out to as a resource when something goes wrong.

Our Perspective

For us, using EDI has given us access to new opportunities with big box retailers. In the past, you’d have to call on someone and remind them that you have a particular item. Now, since your whole price book is available electronically, it’s easy for them to see, and if they want to find something, they can. We’ve started to sell different products and different opportunities to customers that had never been considered before.

EDI is giving companies the chance to not only increase efficiency and save money, but to differentiate themselves in order to gain more opportunities and improve relationships with partners.

– Bethany Doss is business manager for Capital Lumber, Healdsburg, Ca., and a member of the North American Wholesale Lumber Association’s board of directors. Anthony Luongo is a business systems analyst at Capital’s headquarters in Phoenix, Az.

About NAWLA

NAWLA (North American Wholesale Lumber Association) is the association that delivers unparalleled access to relationships and resources that improve business strategy and performance through sales growth, cost savings, and operational efficiencies for wholesalers and manufacturers of forest products and other building materials that conduct business in North America.

Learn more about how NAWLA can help your business at www.nawla.org.

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Suitor Eyes US LBM Holdings

Buyout firm Kelso & Co is in negotiations to acquire US LBM Holdings LLC in a deal that could value the building materials distributor at around $1 billion, including debt. So far, Kelso has outbid other private equity firms in the auction for the company.

US LBM was created by BlackEagle Partners LLC in 2009 as a platform to acquire building material distributors and currently owns more than 20 LBM companies, with 160 locations.

CONTRACTORS attending a training session in one of RDI’s mobile classrooms can sign up for RDI’s new benefits program.

RDI Launches Rewards Program

Railing Dynamics Inc. is rolling out RDI Pro, a new program that offers installers/contractors rewards, offers and sales and marketing support.

Contractors sign up for the program on the company’s website, upon visiting one of RDI’s “mobile classrooms.”

The program allows contractors to earn rewards back on eligible purchases, which can be applied to pay for marketing items, co-branded ads, or to RDI Pro Gear from the RDI’s website.

Since 2012, RDI has been touring the East Coast with two customized 20-ft. trailers, offering training via product samples, displays, video loops, and other promotional/ educational materials.

Rayonier Purchases Oregon Lands

Rayonier has purchased about 18,000 acres of timberlands in northwest Oregon and southwest Louisiana in two separate transactions from BTG Pactual Timberland Investment Group.

Known as the Scappoose parcel, the Oregon property consists of about 5,600 acres of timberland tributary to domestic and export markets in the northwest corner of the state, near current company holdings in southwest Washington.

Purchased for $34 million, the property complements the age-class profile of the company’s Pacific Northwest timber holdings and contains merchantable inventory of about 102,000 tons. An estimated 95% of that is highvalue Douglas fir and is comprised of about 88% operable lands. The property is expected to improve the company’s sustainable yield by approximately 35,000 tons per year.

The Louisiana property, known as the King parcel, consists of about 12,200 acres of southern pine timberland.

The property was purchased for $25.5 million and contains merchantable inventory of approximately 560,000 tons.

The land is expected to improve the company’s sustainable yield by approximately 45,000 tons per year.

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SALES & MARKETING SPECIAL SECTION SALES

REWARDS

STRATEGY

James Olsen Sales Culture

LEADERSHIP

SOCIAL MEDIA

Shelly Smith Adams Marketing Plans

MARKETING WEB Heather Crunchie PR

ADVANTAGE VALUE Bob Loew SERVICE Supplier Selection

LOYALTY Renee Labbe Trend Forecasting

RELATIONS

STRATEGY

Dr. Rick Grandinetti The Basics

RELATIONS TEAMWORK

In a crowded and noisy marketplace, the best way to get ahead is by improving your sales and marketing strategies.

RESULTS

Here, eight experts provide tools you can immediately use to: • Develop a Sales Culture • Fine-tune Your Marketing Plan DIFFERENTIATE • Capitalize on Free PR • Choose the Right Suppliers STRATEGY • Use Future Trends to Lead the Market • Business Basics to Avoid • Deploy Simple Sales Drivers • MaximizeLEADERSHIP Profits thru Variable Pricing

Alex Goldfayn Revenue Growth

Mike Limas Variable Pricing

SALES & MARKETING SPECIAL SECTION James Olsen on Sales Culture

How to build a sales culture

B

sales culture pays huge benefits.

Strong sales cultures attract talent, lower turnover, increase longevity, decrease time to profitability for new hires, and deliver a higher profit per employee.

A large Canadian producer that churns out millions of board feet a day will operate its sales team differently than a sawmill that makes three truckloads of hardwood lumber a day. An office wholesaler with five branches running 20 salespeople per branch will operate differently than a fourman shop in northern Maine.

All segments of the lumber industry will need strong sales cultures to survive and grow in all markets. Below are six areas to build your sales culture on.

UILDING A STRONG

Picking Sales Leaders

Individual sellers will sell. Sales leaders will help you grow your sales culture. The classic sales culture mistake is to give the leadership role to the best salesperson. Your best salespeople often will be great leaders/mentors/coaches, but just as often then won’t. Choose leaders based on leadership qualities not merely sales qualities.

Guidelines for finding your sales leaders: • Don’t be in a hurry to designate a sales manager. The leaner the better. Your natural leaders will assert themselves. Many of my most successful clients have one leader and 40 salespeople.

• See who does it for free. Many want the title or the money associated with the job, but they don’t really want to lead, mentor and coach. Watch for those who do leadership work because that’s who they are.

• Ask for volunteers.

• Make it tough. Make sure your team knows all the activities required of sales leaders. A major point to make is that leadership work is not commissioned based. If the conversation starts with, “I’d be better off spending my time selling,” you have achieved your objective. Make it (leadership work) tough enough to keep away the title/money seekers. These attributes can be great for sales, but by themselves do not constitute a leader.

• Make sure your sales leaders are judged by the overall team performance.

• They should be a good to great salesperson. If they’re weak, your team will be weak. Your leaders don’t need to be the very best, but they should be among the very best.

Making It Public

Daily public posting of sales numbers keeps your sales team focused. Post the numbers in a prominent place—the kitchen, breakroom or the wall behind the coffee pot work.

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There are two kinds of numbers: effort numbers and results numbers. We post both sets of numbers to reward results and activities. Sales management is activity management. Effort numbers include the number of outbound phone calls, time on the phone, number of appointments, and number of proposals written and delivered. Results numbers include the number of orders, sales dollars, profit dollars, and new clients signed.

Posting both sets of numbers daily and publicly will help build your sales culture. All team members will know who is doing what. Effort numbers are very important to your new hires and to your veterans. Most new hire victories will be in the effort column. Veteran leaders will shine in the effort column. Posting also helps you to focus on and manage to what is important for the team.

Celebrate and recognize sales excellence often and publicly. Salespeople are competitive. They love contests.

Salesperson of the month. Salesperson of the section. Make sales teams. If you have 30 salespeople, match your number one with number 30, number two with 29, etc., and make a competitive game for a month or a quarter. New customer sign-up contest. Direct the contest to the activities you want to encourage.

Spur-of-the-moment contests are good. The next order— $20 cash. Next new customer order—$50 cash! If the whole office hits X amount of orders today, we’ll meet for Building-Products.com

pizza right after work.

Reward excellence. Set yearly goals for super achievers and reward them with something special. A weekend trip for them and a guest to a resort hotel. These incentives can be lavish or frugal as long as they are special. These kinds of traditions build a competitive sales spirit within your organization. People want to be recognized.

The Hiring Process

• Hire slow, fire fast.

• Test them. There are many personality tests available.

Caliper is one that I have used with success. There are certain personality aspects that are common in great salespeople. These tests are worth the investment. They will help you confirm your gut instinct or give you a guide on an enigmatic prospect.

• Involve the whole team. Use your current crew. They know what it takes. Some will be better judges of talent than others, so keep track of their opinions. This will create a buy-in from your group.

• Three to four meetings. Get your potential hires in a social situation—lunch or dinner.

• If they start to miss work or show up late, nip it in the bud now. Showing up late or calling in sick is not a good sign, especially early in our relationship with our new hire.

Do not let it continue; put this type of person on a very short leash and see tip #1.

Compensation: Clear, Fair & Simple

My brother says, “There are two types of companies; the kind that want to pay salespeople and the kind that don’t.”

The clearer, fairer and simpler your compensation plan, the more it will inspire your sales team. Too many compensation plans are written to cover potential problems. They are too complicated. They try to cover all contingencies instead of inspiring the sales team. Sales management will cover contingencies when they arise. If you cannot explain your compensation in less than four sentences, you need to re-write it.

Here are two examples of poor compensation programs: Company #1 30% on first 100K of profit generated 35% on the next 50K of profit generated 40% on everything beyond 150K So far so good. This is easy to understand. Here’s the catch. Since some highly motivated, insightful and hardworking salespeople were able to make over $1 million in commissions, the company decided that after X amount of profit, the compensation paid to the salesperson would go back down to 30%!

The problem, culturally, is the message this rule sends.

We don’t want to pay you. We think you’re overpaid. We think you’re not so intelligent. This company wastes an opportunity. Not many salespeople will be in the $1 million per year range, but they will inspire many below them to try to be a $1 million a year salesperson! Kicking this salesperson in the shins sends the message to the sales team, “Sell, but not too much.” Bad message = bad culture.

Building-Products.com

Company #2 I worked with this company for two years. No one in the organization could explain their compensation program to me, not the CEO, GMs, nor the successful salespeople within the organization. There were five categories and several nuances within each category that needed to be calculated before arriving at a sales compensation number. In reality, it was a salary plus (subjective) bonus.

One of the most experienced salespeople told a new hire, “Don’t sell too much this year because you will have to sell against it next year.” The salespeople knew that the compensation program was deliberately vague. This creates a culture of “Let’s sell as little as possible, for as much pay as we can” from the sales team and the opposite—“Let’s pay them as little as possible for as much as we can get out of them”—from the management side.

These cultures do not attract or retain high level sales talent. Their teams will be made up of salespeople who will put up with compensation that is not clear, fair and simple.

These cultures are self-fulfilling. They create mediocrity.

Two examples of good/clear compensation: Company #1 30% for first 100K in profit generated 35% on next 50K in profit generated 45% on every profit dollar beyond Company #2 Base salary $2,500 a month 10% on all profit dollars with 12% margin 12% on all profit dollars with 15% margin 20% on all profit dollars with 20% margin, etc.

Both of these systems have nuances, but the base compensation is clear, fair and simple. Most importantly, this kind of compensation attracts and retains top salespeople.

These programs are “limitless;” the sky is the limit.

Philosophically, if you see salespeople as a necessary evil, your culture and compensation will reflect that. If you see your sales team as money-making partners in your business, your compensation and your culture will reflect that.

Training

Sales cultures constantly train and reinforce their values and skill sets. Early training is a must. Role play and listening to and critiquing of taped calls are very effective.

Building a sales culture can begin quickly, and will bring quick results. A strong and lasting sales culture will take time, energy and focus.

James Olsen is the founder of Reality Sales Training, Portland, Or. After 20 years in sales with Nike, North Pacific Lumber, and Forest City Trading, in 2001 James started his own sales training business, devoted to helping companies and individuals achieve rapid sales growth. Contact him at james@realitysalestraining.com.

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SALES & MARKETING SPECIAL SECTION Shelly Smith Adams on Marketing Plans

Devising a cohesive marketing campaign V

IRAL, GUERILLA,

undercover marketing… these are all terms that you are familiar with and implement in your business, right? Don’t worry.

No need to rush out and buy a marketing dictionary. I’ve been working in the marketing field for close to 20 years now and some of these terms were new to me, too.

With lots of strategies out there to pick from, how do you decide which is best for you and your company?

We can make this a lot simpler than it sounds. While these fancy terms sound interesting, what is really needed is just a good ol’ fashioned plan—a marketing plan. This plan can be as simple or complex as you would like it to be. However, the most important factors in making your marketing plan, strategies and campaigns is to create a deliberate, purposeful marketing message that is cohesive and consistent.

So what does that mean? Over the years, I’ve handled marketing campaigns for many companies—some successful and some, well, not so successful. However, with each campaign, I’ve learned more about how to lessen the chance of an unsuccessful campaign and guarantee a successful one. What I’ve found is that the best-made marketing plans are always created with thought and purpose and kept consistent throughout.

It is important to be deliberate about creating a cohesive message. This message will be carried throughout every marketing piece, including ads, direct mail campaigns, a website, and even through your own company staff. What most companies don’t think about is that EVERYTHING leaves a message or impression, whether it’s intentional or not. So make it intentional! When creating your message, put yourself in your customer’s shoes. We often forget to consider what it’s like to be a customer of our own company. Remember that we are customers of many places. Take a moment to recall some experiences you’ve had with companies. Think about the bad and the good. Think about how you want your customer to feel after reading an ad or visiting your website or speaking to an employee. Little things make a BIG difference! Remember that a consistent message will filter through all of these channels.

We all remember the tagline, “Fly the Friendly Skies.”

That sounds great to me! When was the last time your flight experience was that friendly? What about “I’m Lovin

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It!”? I’m not sure I was thinking that the last time I ate fast food. A tagline is easy to come up with. However, you must embody the meaning of that message in EVERY aspect of your marketing and EVERYTHING you do is part of your marketing! All it takes is one contradiction to defeat your marketing efforts. Think about that waiter’s rude attitude that made you never want to go back to your favorite restaurant. All of those positive prior experiences ruined by a single person, on just one day! It’s because marketing really is about communicating—communicating the value of your product or service in the effort to increase sales.

Keep it consistent and restate it. You’ve created your marketing message and it’s ready to go. Now keep it consistent and use it throughout all of your marketing efforts.

There is an old marketing adage called the “Rule of Seven.” It states that a prospect needs to see or hear your marketing message at least seven times before they take action and buy from you. In today’s noisy world, it’s more than seven times. Customers are already being bombarded by all kinds of messages. If you continually vary yours, it will just get lost in the crowd. Again, consistency in message and frequency is the key.

If you remember only three things, remember that in order to create a powerful marketing campaign, (1) you must be deliberate in your message, (2) keep the message consistent, and (3) carry it through all efforts, marketing and otherwise.

Marketing must be an ongoing process in order to be successful. It’s about communication. So, be sure that you are communicating the right message, every time to your potential customers and you’ll find results that are measured by increased sales, loyalty and referrals!

Shelly Smith Adams has a near-20 year career in consumer marketing campaigns and strategies, working with some of the leading publishers in the U.S. Her specialty of unifying go-to market efforts into an integrated strategy has been used by organizations ranging from startups to multi-national corporations. Contact Shelly Smith Adams 526 Media Group her at sadams@building-products.com.

Building-Products.com

SALES & MARKETING SPECIAL SECTION Heather Crunchie on PR

6 ways to convert your expertise into free publicity F

OR MANY SMALL,

single-location lumberyards, having a dedicated public relations person just isn’t in the cards—or the budget. And even those that do have a marketing team member often find that person stretched between many roles.

Still, PR outreach beyond traditional ads and co-op dollars can be a powerful tool to increase your company’s brand recognition in the community. And, fortunately, there is much PR to be gained simply by leveraging your hardearned expertise—by converting your know-how and observations into content that can be shared by you, your company, and the media.

Develop a Topic List

Start by making a list of topic areas in which you and your colleagues are experts. Perhaps it’s exterior design trends, closing the sale, or more efficient installation techniques? Perhaps you follow local housing statistics? Or maybe you’ve observed stand-out projects completed by customers?

This is often the hardest step, but you’ll soon find the ideas flowing as you consider the advice you give to customers each day, share the lessons you’ve learned over the years, and observe the buying habits or opinions of your customers and the community.

Be the Local Expert

Flexing your know-how with a byline or quote in the press will keep your company’s name front and center while also alerting potential customers to your expertise and leadership. Get to know your local newspaper editors or community bloggers and offer yourself and your team up as home improvement resources.

Perhaps the paper needs a monthly column with how-to tips or product trend reports, or maybe they’re just looking for new sources for upcoming articles on home design and local buying habits. Either way, let them know you have in-house experts ready to go and provide them with topics and potential story ideas.

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Be the National Expert

Many small yards are reluctant to share their ideas and triumphs with trade publications for fear that competitors will find out—but in reality it’s likely that your competitors already know.

Reach out to editors at national trade and association publications (most of them list their contact information on the publication’s staff box or website) with success stories, novel business approaches, and case studies, or offer up your unique building expertise. For example, perhaps you have figured out a more efficient way to schedule deliveries or have supplied a particularly challenging project.

If you’re featured or quoted, be sure to share the article with customers, such as on social media and in casual emails or a company newsletter, to increase your clout.

Start a Blog

Not having much luck with local papers? Create your own editorial platform with a company blog on your website or through a plug-and-play application such as WordPress. Plan weekly content on key topics for your audience and engage your in-house team to contribute occasional posts with how-to advice, seasonal tips, showcases of new product offerings, photo albums of customers’ projects, observations on local housing trends, etc.

Share links to your posts on social media and in emails/enewsletters to customers, and share with local and national editors for consideration for reuse in their publications. Do your manufacturer partners have e-newsletters?

Let them know about your blog content for possible inclusion in their upcoming editions.

Blogs take some work, but if you have strong expertise to share, good content can bring traffic to your website while showcasing your team as local industry experts.

Work with Manufacturers

Even if your company doesn’t have the bandwidth to conduct extensive marketing, chances are your vendor partners do—and they’re eager to leverage your story for Building-Products.com

mutually beneficial marketing.

Communicate with your vendors’ marketing teams and let them know about interesting projects where their products are being used or unique ways you’re selling their products.

For example, when our client Weyerhaeuser contributed an article to this publication on events for women, it included real-life examples from dealer customers, providing those yards with publicity while requiring minimal time expenditure. For another manufacturer, we showcased innovative business approaches of builder and dealer customers in short videos used in national advertising and PR campaigns.

Be an Expert on LinkedIn and Houzz

Jumping into social media can be a bit scary, but LinkedIn and Houzz offer some of the lowest barriers to entry, as well as some of the biggest opportunities to share your knowledge directly with those who need it. As an individual, follow industry LinkedIn “groups” and weigh in with advice when discussions skew toward topics in which you specialize. As a company on Houzz, search for discussions in your areas of expertise (perhaps “entry doors”) and contribute answers or advice to consumer questions.

Your industry expertise is hardearned—use it to your company’s advantage by converting it into shareable, useable content. With each byline, mention, or contribution, you’re racking up yet another view of your company’s name and helping to position it as a key community resource.

Heather Crunchie is co-principal of C Squared Advertising (www.csquaredadvertising.com), a fullservice marketing firm specializing in the building products industry. Contact her at heather@csquaredadvertising.com.

Heather Crunchie C Squared Advertising

Building-Products.com

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SALES & MARKETING SPECIAL SECTION Robert Loew on Supplier Selection

Choosing the right suppliers W

dealers, distributors and manufacturers see their businesses as separate, they aren’t.

Increased dealer/distributor sales benefit both the dealer/distributor and the manufacturer. All get more orders.

There are two types of manufacturing suppliers: order takers and partners. The kind of manufacturer you distribute for has a measurable impact on your margins and profitability. Partners do business differently in four areas: integrity, empathy, loyalty and value. There’s an easy, one-question test to determine if a manufacturer is a good fit: ask, “How does this benefit my business?”

HILE SOME

INTEGRITY

“Earn your success based on service to others, not at the expense of others.” – H. Jackson Brown Jr. Partners have integrity, communicating openly and honestly. They think like you do and put your profitability in the forefront of their actions. It’s safe to talk about things like margins with them, because conversations are confidential. Partners see themselves as part of your team. They see your success as a part of their own success, not mutually exclusive.

How does this benefit my business? Integrity is the foundation of trust. Collaborative supplier partnerships based in trust, support profitability, and growth. Why? Because your time is spent growing the business, as opposed to checking up on a supplier.

EMPATHY

“Walk a mile in my shoes.” – Joe South Partners demonstrate a genuine interest in your company by asking questions and listening. Instead of selling you products‚ they bring opportunities and work with you to achieve results. Their goal is obvious: to understand your concerns and know your business as well as you do. Partners are constantly finding and suggesting new ways to grow your profitability. They might, for example, show you how to put your yard’s waste factor back into margin percentage (and into your pocket) with an optimization program.

How does this benefit my business? Internal innovations drive profitability by putting results within your control.

Imagine cutting waste to less than 1%—could you eliminate one entire position and the overhead?

LOYALTY

“An ounce of loyalty is worth a pound of cleverness.”

– Elbert Hubbard

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Partners don’t sell directly to your customers, offering you a couple of percentage points back to make up for it. They value your relationship and help you build relationships with your customers. Partners have customer-focused ideas to make it easy to buy from you (e.g., marking product for length, pre-cutting required holes, or labeling product to match the layout). They view your feedback as opportunities to innovate: matching their new products with your challenges.

How does this benefit my business? Spending your time competing for customers vs. implementing ideas to connect with them—which is time better spent?

VALUE

“Price is what you pay. Value is what you get.”

– Warren Buffet Partners create additional value by helping you differentiate your business. Support-based education and training are standard. They willingly train your sales and technical employees about the market, not just their products.

Partners see your challenges as their own. Solving your customer challenges are as important to them as they are to you. Their first priority: solve them as quickly and painlessly as possible. Resolving your customer’s concerns, first‚ the order details with you, second.

How does this benefit my business? Partners understand and know how to help you create internal and external value beyond their products. Often, it arrives as intuitive support when you need it the most: with human capital.

“Quality and price” aren’t the competitive advantages they once were. Today, everyone has quality products and low pricing. Value is the new competitive edge. Partners deliver value—value that is often invisible, existing beyond products, orders and programs. Choose as if the success of your business depended on it.

Robert Loew is a longstanding member of the LBM community, with a 360-degree expertise in sales and distribution of engineered wood. He is managing director of Metsä Wood USA, specializing in the manufacture and distribution of high-end Nordic timber. Contact him at robert.loew@metsagroup.com.

Bob Loew

Metsä Wood USA

Building-Products.com

SALES & MARKETING SPECIAL SECTION Renee Labbe on Trend Forecasting

By Alex Goldfayn

Capitalizing on consumer trends ahead of the curve Q

UICK TEST: What do these three things have in common? A bathtub brand begins radically altering the shape of its freestanding product range, a kitchen cupboard manufacturer introduces a “digital” drawer, and an air conditioning company announces that it’s now in the business of roofing.

To answer this question, please allow me to side track temporarily.

One of my favorite things in the whole world happens every Sunday, typically between the very ordinary hours of 2:00 and 5:00 p.m. It sits in the back of my mind all week long, the unwavering promise of forthcoming wonder and inspiration, like the series finale of an HBO hit. It never disappoints, it never loses my interest, and it never fails to produce within me a feeling I absolutely love: awe.

This semi-obsession is attending open houses. If you’ve ever done this, you may have experienced such feelings a time or two yourself. And if you’ve ever attended a decent amount of them, you undoubtedly know the oh-so-subtle difference between a house that merely checks all the necessary boxes and one that opens your mind to a whole new sense of living your day to day that feels like pure ease and pleasure.

Spoiler alert: that subtle difference is not price point.

I can’t describe in enough detail the amount of times I’ve visited two similarly advertised homes—on the same day, in the same neighborhood, with the same number of bedrooms and bathrooms, with the exact same list price— and come away with two vastly diverse impressions. So what gives? What could possibly account for such a gap?

It’s a subtle thing really, hard to pinpoint at first.

Perhaps it’s a master bathroom you keep looking at and thinking, “I love this”—even though it’s much smaller than the other master baths you’ve seen so far. Or a pantry you can’t help imagining your future self foraging through. Or

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the special way the treeline in the backyard conceals the footpath to the garage.

You could call each and any of these things The Art of Thoughtfulness—the care taken by architects and developers to truly consider the various elements of a home. And such care is anything but typical. It’s not the consideration of such things as the ideal number of bedrooms or the preferred size of the great room, but rather of enriching the lives of its inhabitants.

But while understanding the habits and needs of a homeowner is an integral part of the upfront design process, doing it well is often no mere act of observation.

It’s an ever-evolving blend of social science, measured analytics, and predictive modeling.

And it happens to be my job.

As a consumer foresight strategist, my role for the last 16 years has been to help designers of everything from aprons to automobiles make such “thoughtfulnesses” the Step One in their creative processes. It’s my responsibility to look two years ahead, five years ahead, even 10 years ahead and identify how the future consumer will change in behavior—so that designers in turn can be ready with the right products and the right time.

Like a radical new bathtub shape. Or a digital drawer.

Or a breathable roof made by an air conditioning company.

For a lot of projects, arriving at such product ideas begins by finding connections between seemingly unrelated things. For example, we know from several research sources (including the United Nations and the World Health Organization) that within the next 10 years, more than 80% of the global population will be living in cities. If that’s true, we can of course expect land values and shortages in such regions to rise. Developers will fully utilize residential density per regional zoning codes to maximize Building-Products.com

revenues, and homes will continue to get smaller and closer together.

Naturally, for the inhabitants of such homes, this increased density means less privacy. So privacy becomes a commodity. The job of the architect and developer, then, becomes to sell the sense of perceived privacy via the designs they erect.

Seems simple enough a task. Yet when we span the 10-year horizon we see more than just shifts in urban density. We know from numerous data sources that an increasing number of U.S. workers are freelance-based or entrepreneurial—experiencing a greater amount of flexibility in their daily calendars. For those workers who are employed full time, we know an increasing number of companies are attempting to attract and retain skilled employees with flexible work hours, no vacation policies, and relaxed “attendance” requirements.

And no matter how flexible the work schedule, an exponential number of companies and apps are increasingly competing to handle anything and everything one may need—from picking up dry cleaning to paying the valet to getting groceries. All of these things add up to more of one very special thing: freedom.

So what does that have to do with residential housing products, you ask?

Great question. Translating increased privacy while simultaneously assisting in the perception of increased freedom can seem like polar opposites. But therein lies the type of ongoing challenges that developers,

architects and their suppliers must rise up to meet. For those who do, homebuyers will be rewarding.

Freedom is not a simple thing, but loosely translated it can mean increased openness, expansiveness and greater ease of accessibility to outdoor areas. Yet privacy would mean the exact opposite: increased hidden-ness, and less visible connection to the outside world.

The first impact can be witnessed for the windows industry. Freedom would mean more windows, greater amounts of light, and maximum light exposure. Yet privacy would mean less visibility from the outside in.

The translation: window budgets will shift to account for larger windows… which will in turn need to be more strategically placed… which will in turn result in alterations in planning documents. A large rectangular living room window, for example, horizontally placed high on a wall near the ceiling, would offer an exceptional amount of light yet shelter the inhabitants from the wandering eyes of passersby or too-close-for-comfort neighbors.

Freedom vs. privacy impacts a great number of design elements within a home. Windows and window treatments are obvious, but landscaping and courtyards also become reconsidered. And then of course there are other consumer-driven outputs that impact home design, like behaviors we’re calling “home-sharing,” “single-servers,” and “app-support,” to name a few.

Regardless of the which future behaviors are anticipated, or how those behaviors are subsequently translation in the functionality and aesthetics of a home, these types of conversations are proving more and more necessary to stay competitive.

The bathtubs, the digital drawers, and the A/C roofing are all parts of a new type of dialogue that architects, developers and suppliers need to have if they want to meet the quickly shifting needs of increasingly design-savvy consumers. Like a form of design insurance, understanding the needs of consumers is paramount. But translating them is critical in this changing marketplace. Allowing trend forecasting to influence your business in everything from inventory, to sourcing new product lines and training staff training can help you stay ahead of the competition.

Renee Labbe is a consumer foresight and design strategist with 16 years experience providing predictive intelligence to hundreds of the world’s most recognizable brands. Her company, Broadside Studios, specializes in analytics & insights-based design forecasts for the architectural industry. Contact her at renlab@me.com.

Renee Labbe Broadside Studios

C&E LUMBER COMPANY 1 1/2” to 12” Diameter in Stock.

SPECIAL QUOTES

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SALES & MARKETING SPECIAL SECTION Dr. Rick Grandinetti on The Basics

Five business basics to immediately flee from W

Examples of perceived value are: faster delivery, better terms on payment (2, 3% net 10), immediate problem solving, impeccable service, provide potential customers for your customers, make it seamless to conduct business with you. Bottom line: What is your company so good at you cannot be ignored?

with organizations for 26 years, I have witnessed something just short of remarkable. This observation is so simple, yet advanced. A company will flourish and dominate the marketplace when it learns, applies and improves upon these simple business basics. I remain baffled by those who believe business is complex and intricate.

To further illustrate this point, the following are the top five opposite statements of successful business basics: HILE WORKING

1. “Our industry is unique and has its own problems, and we are not like any other company or any other industry.”

Wrong! It doesn’t matter what you manufacture, sell or service; every organization has the same problems.

Ultimately, the majority of problems will start and end with your employees.

2. “Our products are the best, we buy the best raw materials, and we buy from the best vendors.”

Wrong again. Most, if not all products, look alike; there are very few exceptions of product differentiation.

3. “Our customers are loyal, they are our customers, we earned them, and they won’t leave us for the competition.”

Strike three. I am sure your customers will be loyal when they are buying from you; however, your customers experiment with the competition, and your customer is constantly thinking: “What have you done for me lately?”

Most organizations that have failed have this in common: they take their longterm customers for granted.

4. “People buy on price, our customers want the lowest price. That is the main reason why they buy.”

This statement is true only 7% of the time. U.S. News & World Report research indicates that less than 7% of the purchases in the U.S. are on price only. The other 93% are looking for a fair price and perceived value, if they cannot find value in their purchase then it defaults to price.

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5. “Our employees are just that, employees. All they want is to put their eight hours in and go home, they just care about the paycheck.”

Wrong once again. If your employees don’t care about their work or their company, it shows in their work, problem solving, production and innovation. This ultimately bleeds over to the customer.

Keep in mind, “A customer will never love a company unless the employees love it first.” If your employees work as though they cannot wait to get the heck out of work, your customers will feel the same way.

If employee morale is poor and indifferent remember this: “You cannot build a house on a broken foundation.”

With the indifference from your employees, cracks will form in your organization’s foundation and ultimately lead to the demise of your company.

The antidote is simple. Do and act the opposite of the above five business basics statements.

Lastly, companies that thrive in any economy preform the basics better than their competition. They prosper by out-servicing the competition not out-spending them.

Dr. Rick Grandinetti has designed, produced, coordinated and conducted thousands of seminars and keynote speeches, and has authored educational programs and two books, including Succeed Inside the Box, Guaranteed. Contact him at rick@succeedinsidethebox.com.

Dr. Rick Grandinetti Succeed Inside the Box

Building-Products.com

SALES & MARKETING SPECIAL SECTION Alex Goldfayn on Simple Sales Drivers

By Alex Goldfayn

The million dollar question I

WAS AT THE Minneapolis airport waiting to board my flight home, and went to buy a cup of coffee.

The young lady at the counter took my order and then asked if I would like a bottle of water with that.

What a great question! I’m getting on an airplane, of course I want a bottle of water! It’s a smart, opportunistic and highly valuable question. “Do they teach you to ask that question,” I asked.

“Yes, it’s a part of our training,” she replied.

“How many people buy a bottle of water?”

Without hesitating, she replied, “Almost everyone.”

Guess how much the bottle of water cost? Five dollars!

My coffee’s price was $3.

Now, consider the immense power of this single question: it nearly triples this coffee shop’s revenue. My order went from $3 to $8. It took the seller two seconds to ask. It cost nothing to implement.

The customer (me) was quite happy at the seller’s suggestion, because it helped me, and I was happy to pay for it.

In fact, I would have bought the bottle of water elsewhere before getting on the flight. But this woman behind the counter saved me the time of making that extra stop. I was grateful at her suggestion. One helpful question for nearly triple the revenue.

What is your version of this question? What is your bottle of water? I can answer the first question, but only you can answer the second. Here’s your version of “would you like a bottle of water with that”: Did you know we also do (or make) x, y, or z?

My clients dubbed this the “did you know question.” Of all 22 techniques that I implement for my clients, this is one of the two most effective ones. The did you know question can grow your business by 15% annually, starting with the moment you start asking it. Here are three ways you can implement this at your firm: • Just like the coffee shop counter lady, all customer-facing people can ask the did you know question to every customer—in person or on the phone. Look at what they’re buying and ask if they need something complimentary.

• Add the did you know question to every email you send. You can type it into the body of the email, or…

• Add the question to the signature of all your emails.

Do this company-wide, for everyone sending emails.

Consider all of the different products and/or services your company sells. Your entire product catalog, and the

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total range of your services. That’s 100% of your offering. What percentage do you think the average customer is aware of?

I’ve studied this among my clients. The average customer’s awareness of all that they can buy from you is about 20%. That means people cannot buy 80% of what you make or do. Even if you’ve told them you do something, it doesn’t mean they’re consciously aware of it!

Think about this: your customers enjoy doing business with you, that’s why they keep coming back. They buy things from you which they find valuable and helpful. Which is why they’ve been with you for years.

They need other things you can sell them. In fact, chances are they’re already buying those things from others. They’d like to buy these things, or services, from you, and you would like to sell it to them, but none of it can happen because your customers are simply unaware of what they can buy from you! It’s almost tragic.

We solve this problem by asking the very simple and straight forward did you know question. Let’s assume you have five customer facing people at your company who interact with customers, by phone and email, a total of 50 times per day each. That’s 250 interactions per day, or 1,250 per week, or 62,500 communications per year.

Since we’re adding line items or options to an order with this question, let’s assume that 10% of all did you know questions result in an order (my clients average about 20% success rate, but let’s be conservative). And let’s assume the average line item is $300, but use your own numbers.

That’s $1,875,000 in new business. But if you hit the average, you’d be at $3.75 million in new business. And if your average line item is $1,000, you’re at $12.5 million!

See how this works? Just like selling water with coffee.

What’s your bottle of water?

Alex Goldfayn is a market strategist, consultant, coach and speaker for companies that are looking for dramatic growth and increased revenues. His latest book is The Revenue Growth Habit: The Simple Art of Growing Your Business by 15% in 15 Minutes Per Day. Contact him at alex@evangelistmktg.com.

Alex Goldfayn

Evangelist Marketing Institute

Building-Products.com

The The

MERCHANT MERCHANT

Magazine Magazine

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Building Products Digest

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Building-Products.com August  Products Digest Building-Products.com August 2015 2015  Building The Merchant Magazine  65 45 BPD and The Merchant Magazine – Official Publications of NAWLA

SALES & MARKETING SPECIAL SECTION Mike Limas on Variable Pricing

The AA, BB, CCs of pricing optimization of simply using A, B, C or D, rankings are AA, AB, AC, AD, BA, BB, etc.) The quadrant is based on two axes: buying behavior on the x-axis and profitability impact on the y-axis. The value for each area is based on a set of variables. For instance, profitability factors include delivery costs, will-call orders, returns, and days past due. Using the quadrant helps separate dependable A and B customers from those with sporadic buying behavior or chronically late payments.

Changing Behavior

THE QUADRANT reflects a customer’s profitability and relationship with your business.

V

ARIABLE PRICING is gaining a lot of attention. Everyone wants a system that can crunch data and spit out a magic number.

But chasing a magic number misses the real value of the process. Pricing optimization is not just a software function or calculation. It’s a powerful managerial tool. More specifically, it’s a strategy for improving profit by changing behavior. And when done correctly, it helps provide better service to your customers.

Learn Your AA, BB, CCs

Pricing optimization starts with customer stratification.

Many businesses only use gross sales to rank accounts as A, B, C or D. But not all “A”s are created equal. For instance, an A customer with a lot of returned items and late payments may not be very profitable. The stratification process accounts for these “hidden costs.” It provides a more comprehensive picture of your customers and their impact on your bottom line.

Stratification plots customers in a quadrant. (So instead

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Customer stratification doesn’t just show which accounts are most profitable; it shows how to make them more profitable. It’s similar to looking at a class’s test results. The overall grades don’t reveal much, but reviewing the test questions can pinpoint which students have problems with spelling and which have problems with grammar. Likewise, a customer’s AB or CD rating only tells you so much. The stratification process, however, breaks out specific factors. When you know what areas to target, you can respond more effectively.

The goal of pricing optimization, after all, isn’t to charge the highest price, it’s to make the highest profit. To really improve profitability, you likely need to change the behavior of both customers and your sales reps.

Change #1: Account Management Consider this (highly simplified) example. Acme Lumber has two customers: Jay Construction and Haas Builders. Both have a profitability ranking of “C.” But if we dig into the specific variables, we can see they have different issues.

Jay

Haas

Orders per Stop

B

B

Lines per Order

D

B

Returns

B

D

TOTAL RANKING

C

C Building-Products.com

Jay Construction usually has just a few items per each order. Haas Builders, on the other hand, makes a lot of returns.

This information gives Acme’s sales reps a strategy beyond “sell more.” If the reps can help Jay’s Construction consolidate deliveries and Haas Builders improve order accuracy, it would reduce the cost to serve each company. Those accounts would become more profitable, even if their sales didn’t increase.

This doesn’t just benefit Acme. If these customers improve their ranking and move into a higher quadrant (say from BC to BB), they may be eligible for better pricing. It’s a win all around.

Change #2: Policy Updates If a particular variable causes problems across many customers, an account-by-account response may not be sufficient. It could suggest the need for company-wide changes. For instance, if “returns” are a problem for the majority of Acme’s customers, Acme may want to solve the underlying reasons for returns, add a service charge, or change its return policy.

Change #3: Resource Allocation Stratification also provides insight about about employee performance.

Identifying which reps are most profitable can help make decisions about assigning accounts. Instead of going by seniority or sales volume, assign your most profitable people to the most profitable customers. You can also evaluate “star” reps and look for behaviors that other team members can adopt.

Pricing

Once a business stratifies their customers and performs a similar process with their items, they can calculate optimized prices. Exactly how a business uses optimized pricing is up to them. Some may decide to lock down prices, while others may allow reps a bit of flexibility on AA-BB accounts.

A third possibility is to use optimized prices as a goal, and reward reps when they near their target.

While owners and managers are Building-Products.com

CUSTOMER PROFITABILITY is calculated using a range of variables.

excited about the potential of pricing optimization, sales reps are less thrilled. The stratification process may reveal some A and B accounts aren’t very profitable and should be charged more. Reps aren’t going to be happy about raising prices on their “best” customers and may feel like they are gouging good accounts.

Help reps understand that prices stem from both the products and services you provide. Extra attention and handholding represent real costs. It consumes time and money to constantly update orders, process returns, and wait for late payments. You shouldn’t gouge customers, but it’s okay to charge what you’re worth.

It processes huge amounts of data, runs complicated formulas, and delivers more precise answers. It’s a powerful tool, but it’s still just a tool. It doesn’t know customers, understand goals, or enforce policies. Without active participation, software can’t improve your profitability any more than a FitBit can improve your waistline. Instead of searching for magic numbers, businesses should use pricing optimization as a springboard for greater change.

Going Forward

Some people see pricing optimization as the rise of the machines, with software poised to take the jobs of hapless sales reps. This scenario couldn’t be farther from the truth.

Pricing optimization is an extremely hands-on process. It demands deeper conversations about pricing strategy.

It prompts businesses to consider the “how” and “why” of their decisions.

Software is tremendously helpful.

August 2015

Mike Limas is vice president of DMSi Software (www.dmsi.com), Omaha, Ne. He has over 25 years of experience as a CPA and CFO/COO of service, technology, and building products manufacturing operations. Reach him at mlimas@dmsi.com.

Mike Limas DMSi

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FAMILY Business

By Wayne Rivers

How non-family execs view your business

A

speech, a gentleman came up, introduced himself, and asked if I might have a few minutes to talk privately. He is a senior vice president for a family business, and, having listened to my remarks, he wanted to share his personal observations. Boy, did I get an earful! The reason I want to share his insights is that they apply to so many family enterprises, and as a family business advisor, there is a “teachable moment” here.

FTER A RECENT

ownership and employment. In addition, family members continually question and second guess decisions made by others, and that’s in direct violation of what’s stated in our company values and what the norm in most businesses is.

You may not always agree with decisions, but, once they’re made, everyone has to get on board.

Q2: How does the business run in general?

A: Pretty well. Two years ago we got a vice president of human resources, and that’s been a great hire. We also added an operations guy who’s been driving lean in our organization. Without him, we wouldn’t be discussing the future or succession planning at all.

We’ve grown the company’s size by three times since I’ve been aboard—mostly through acquisitions. The new acquisitions don’t necessarily share our core philosophy of keeping the customer first, and we’ve got some work to do on bridging the cultural gaps. Even with the new senior managers we’ve hired, we still need talented people!

That’s our biggest weakness. But, all things considered, the company does pretty well.

Q3:

run?

This particular business is a manufacturing company owned equally by six brothers and sisters. Four work actively in the company, and two do not. All six are over 50 years of age. Assuring him that our conversation would be private, confidential, and that none of his remarks would be attributed to him, the VP and I sat down and shared a drink. I then asked him a series of questions, which he answered with blunt honesty.

Q1: How do you view the place where the family and the business intersect?

A: There’s a lack of clarity between what constitutes 48

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From your point of view, how does the family

A: The family will bellyache about each other and vent to me, but they will not address their issues directly with each other! Seems like everyone is afraid of being the bad guy. In addition, they are too nice! They don’t hold each other as family or the employees accountable. They’re way too compassionate with employee termination decisions.

Your comments about having the right people on the bus and the wrong people off; no way that works here. For example, the CFO is overloaded and never finishes his projects. He always says, “I’m working on it…” The family won’t hold him accountable.

Q4: What does a typical family blowup look like?

What triggers it? And what is the effect on the employees and morale?

Building-Products.com

A: They argue in front of others; it might go from two

of the siblings to all of them. In person, in private, on conference calls… Some of the siblings withdraw, and some never let a matter drop. They bicker over day-to-day stuff; they argue, and then, because this is normal for them, I guess, they get over it. The problem is all this drama gets pushed out to the rest of the organization while the family tries to act like nothing ever happened.”

Q5: What’s next for business and family succession planning? What does future ownership look like?

A: There is no clear next-generation family succession.

That’s something management is discussing; the owners need to get serious about their succession planning.

Q6: What are your frustrations as an executive working for a family business?

A: It takes six months to make a decision! Usually that’s because the siblings don’t agree. I can make decisions only when it’s convenient. The family retains veto power.

Q7: What dangers do you see for both this family and this business?

A: I don’t know how the company is going to perpetuate itself. Some of the owners are workaholics, and some are all about family. None of the next generation is in the business yet, and there’s a five to 10 year learning curve just to begin to understand what we do.

Building-Products.com

The family hasn’t decided whether to sell among themselves or try and sell the company to outsiders. A big danger is that we could lose key people due to the lack of clarity on succession and the slow response time on key decisions.

Q8: It can’t be all that bad! Why do you stay?

A: The family are great people. They would give you the shirts off their backs. I have lots of freedom to do my job—unless I make a decision they feel they need to take back! I have great job security, the compensation is good, and I get plenty of time off. At my previous employer, I was treated like a number and not a person. I guess the niceness and compassion I was complaining about earlier is also a good thing in some ways.

Okay, I know what you’re thinking. This is a statistical sample of one in a universe of hundreds of thousands of nonfamily managers employed by family-owned companies. Don’t kid yourself! In our experience, the frustrations, dangers, and dissatisfactions discussed by this supertalented person are not the exceptions; they are the rules.

Three key areas of focus for improvement in almost all family businesses are improving decision-making capabilities, holding people accountable, and planning for both ownership and management succession.

– Wayne Rivers is president of The Family Business Institute, Inc. (www.familybusinessinstitute.com). Reach him at (877) 3262493 or wayne.rivers@familybusinessinstitute.com.

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MOVERS & Shakers Scott Nelson has been appointed CEO of Rosboro, Springfield, Or., succeeding David Weza, who is now chairman. Richard Babcock replaces Nelson as CFO. Nate Jorgensen, ex-Weyerhaeuser, has been appointed EWP marketing mgr. for Boise Cascade, Boise, Id. Scott Sunday, ex-Boise Cascade, has been named director of purchasing & sales for Idaho Pacific Lumber Co., Boise, Id. Byron Beck has joined the sales team at Thunderbolt Wood Treating, Riverbank, Ca. Josh Dean has been named sales mgr. of Rough & Ready Lumber, Cave Junction, Or. Ed Cunningham is production mgr.

Rick Pully, ex-Illinois ToolWorks, has joined Screw Products Inc., Gig Harbor, Wa., as VP of sales.

Jeannie Frank has transferred from Spenard Builders Supply, Sitka, Ak., to ProBuild, Gig Harbor, Wa., as assistant general mgr.

Fred Lampher, ex-McKillican American, is now in operations with Spellman Hardwoods, Phoenix, Az.

Brad Wilson, ex-OrePac, was named purchasing and inventory mgr. for Building Solutions, Bend, Or. Ken Wilcox is new to specialty hardwood plywood sales at Timber Products Co., Springfield, Or. Jay Smith has joined Good Earth Power AZ, Flagstaff, Az., as senior forester.

Darrin Moorcroft has been promoted to plant mgr. for Sierra Pacific Industries, Centralia, Wa. Brad Gould is now plant mgr. in Burlington, Wa., and Steve Carey in Keystone, Ca. Skip Sorich has retired after 12 years as windows territory mgr. in Oregon.

Leonard Greer, Tom Renolds, Steve Carrillo, and Andrew Lesser, all ex-Bridgewell Resources, are new to Wood Brokerage International, Lake Oswego, Or., specializing in industrials.

Mike Mahoney, sales, Ganahl Lumber, Laguna Beach, Ca., transferred to the Los Alamitos, Ca., branch.

Kirk Nichols, ex-BlueLinx, is now VP of sales–Americas for Metsä Wood.

James “Mike” Branson, exWeyerhaeuser, has been elected to the board of directors at Forest2Market, Charlotte, N.C. Bowen Smith is retiring after 14 years on the board.

Tate Morgan is new to Owens Corning, as Portland, Or., roofing sales mgr.

Julia Fitzgerald has been appointed chief marketing officer for its CPG Building Products’ AZEK and TimberTech brands.

F. Timothy Reese, ex-Trex, is the new president and CEO of Mikron Industries, Kent, Wa. Michael H. McGarry, president and COO, PPG Industries, Pittsburgh, Pa., has been elected to the board and will add the title of CEO, effective Sept. 1. Current CEO/chairman will Charles E. Bunch will continue as executive chairman.

Andrew Werfelmann is new to North American Wholesale Lumber Association, helping to organize the 2016 Leadership Summit.

Lois Commondenominator is the new accountant at Mungus-Fungus Forest Products, Climax, Nv., report co-owners Hugh Mungus and Freddy Fungus.

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Building-Products.com

SoCal Hoo-Hoo

Building-Products.com

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Photos by The Merchant Magazine

SOUTHERN CALIFORNIA Hoo-Hoo Club drew a small but mighty crowd to its summer golf/dinner meeting July 15 at the San Dimas Canyon Golf Course, San Dimas, Ca. Following golf, speaker David Koenig, editor of The Merchant Magazine, shared the magazine’s history and vision. [1] David Tait, Bryan Callaway, Betsy Bendix. [2] John Pasqualetto, Shawn Knight, Larry Bollinger. [3] Joe Lozano, Sean Larson. [4] Scott Middaugh, Don Kavert, Tony Campbell. [5] Pat McCumber, Jeff Donaho, Mark Davis. [6] Doug Willis, Javier Rodriguez. [7] Craig Larson, Danny Sosa.

INDUSTRY Trends

By Rick Duncan, Spray Polyurethane Foam

Spray polyurethane foam answers call for ZNE

M

ANY LEADING builders now employ and promote significant eco-conscious building practices. Energy efficiency, energy generation, water conservation, resilient materials, life cycle measurements and recyclability are just some of the considerations of today’s builders.

Additionally, major U.S. corporations have established green standards for the real estate they inhabit, while end-

users have come to expect and demand energy saving homes and workspaces.

These stakeholders, along with states and municipalities, have begun to push sustainable building practices even further, fueling the zero net energy (ZNE) movement. The movement describes a move toward buildings with zero net energy consumption. The energy consumed by a zero net energy structure is roughly equivalent to the amount of renewable energy generated on the same site.

With buildings traditionally consuming a major amount of the total fossil fuel in the United States, they are significant greenhouse gas contributors. Thus zero net energy structures are viewed as an important step in the reduction of carbon emissions as well as our overall dependence on fossil fuels.

In July 2014, California began the revision process to the 2016 version of Title 24, the state’s energy efficiency building codes. These codes are designed to move all new residential construction to ZNE by 2020, and all new commercial construction to ZNE by 2030. Though aggressive in nature, these goals are achievable with proper design implementations and accessibility to high performance building products.

Because of California’s proven ability to influence the other 49 states to enact environmental regulations, it is widely believed the same trend will occur with ZNE. Thus it is likely that the ZNE movement will sweep the nation, eventually becoming a mandatory building practice in many regions.

Achieving ZNE with Design and High Performance Materials

ZNE: Because the design of a zero net energy building focuses on energy efficiency, insulation and air-sealing and becoming an all-important piece of the total solution.

(All photos courtesy SPFA)

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Because the design of a ZNE building focuses as much on energy efficiency as it does on energy generation, insulation and air-sealing is an all-important piece of the total solution. With ZNE structures, you simply cannot afford to provide less than a total seal of the envelope. While there are a handful of product options available for sealing the structure, most are multi-product solutions.

An alternative, spray polyurethane foam, or “SPF,” is a single-source solution whose ability to insulate, air and water seal, as well as control moisture throughout the structure, is increasing its role in the ZNE movement. SPF Building-Products.com

works well as a solution for unvented attics, roofing, walls, ceilings and floors, providing high performance in energy efficiency while reducing the need for multiple products.

High-performance attics and wall systems are a key focus of energy efficiency, as they make significant impact in the reduction of peak cooling and heating demands in the building. As a thermal insulator, SPF forms in place and fully adheres, almost completely eliminating the cracks and gaps that encourage the escape of conditioned air. The material may be installed in a continuous layer, eliminating thermal bypasses typically found with cavity insulations and has one of the highest R values of all insulation options available in the marketplace today.

As a roofing solution, SPF acts as both a protective roofing solution as well as an insulator for low-slope roofs. The performance of insulation is measured through a variety of key factors—moisture control, air leakage, health, safety, durability, comfort and energy efficiency—and SPF scores exceptional marks in all categories.

While other combined product solutions may also achieve zero net

Building-Products.com

energy and have been included in some ZNE projects, spray polyurethane foam has continued to grow in its role in ZNE structures. SPF’s combined attributes and performance make it ideal for use in ZNE construc-

tion and will likely influence its use in a majority of ZNE projects.

– Rick Duncan is technical director of the Spray Polyurethane Foam Alliance.

Reach him via www.sprayfoam.org.

HIGH PERFORMANCE attics and wall systems make significant impact in the reduction of peak cooling and heating demands in the building.

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NEW Products

Hammers that Hang in There

Safe and Stylish Glass

Dewalt’s Brushless SDS Hammer is powered by a brushless motor that provides 2.1 joules of impact energy, and is optimized for chipping work and drilling diameters of 1/2” or less.

The rotary hammer is designed for comfortable use with less vibration felt by the user at the handle, and is ideal for use in concrete drilling applications.

An LED with 20-second delay provides visibility in dimly lit space. A retractable utility hook allows the tool to be hung from belts, ladders, carts, etc.

Masonite’s new Exterior Decorative Glass collection is designed to complement architectural styles.

Along with aesthetics, the line meets a range of homeowners’ needs, including those who want privacy textured glass.

The nine glass designs use elements such as wrought iron and textured glass to achieve Craftsman, traditional, contemporary and other architectural styles. All of the glass styles can be ordered to satisfy Energy-Star requirements.

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simplify

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Building-Products.com

WHAT YOU WANT. WHEN YOU NEED IT. Dimension Lumber Treated Products Domestic

Timbers Green & K.D. Export

Stylish Metal Paneling

Wilsonart has added new additions to its Decorative Metals Collection. The 14 new designs feature aging tones and heavily textured patterns with distinct and striking characteristics.

The company has reconfigured the material makeup, manufacturing the new collection like a laminate, making the metals easy to fabricate.

The designs range from simple and smooth to textured and intricate.

 WILSONART.COM (800) 433-3222

Frames That Fix the Problem

The ODL Evolve frame in FiberPro material provides superior rigidity and eliminates bothersome squeeze-out through the use of a compression foam tape seal, allowing for easy removal of the frame when damaged doorglass occurs The system reduces scalloping, corner flare, and warping, and frames are paintable and stainable.

With the auto-aligning and self-seating screw-hole plugs, problems associated with traditional, hard-toinstall sinking screw hole plugs are eliminated.

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Building-Products.com

Manke Lumber Company is familyowned and has been serving the needs of the lumber industry since 1953. We take pride in milling and stocking quality lumber in a full range of commodity sizes and larger dimension timbers. We also answer your market needs for a wide variety of treated lumber products.

Our forest products are milled from carefully harvested Northwest trees ready for distribution to you—on time and at the right price.

Located in the Port of Tacoma, we have ready access to deep water shipping, rail heads or trucking terminals for longer haul loads. Manke operates its own fleet of trucks and is at your service for straight or mixed loads by truck, rail or sea.

We manufacture primarily Douglas fir and western hemlock, including • 2x4 thru 2x12, Lengths 8-20’ • 3x4 thru 3x12, Lengths 8-26’ • 4x4 and wider, Lengths 8-26’ • 6x6 and wider, Lengths 8-26’ • 8x8 and wider, Lengths 8-26’ • Timber sizes up to 12x12

Manke Lumber Company Call 1-800-426-8488

1717 Marine View Dr., Tacoma, WA 98422

Phone 253- 572-6252

Fax 253-383-2489

www.mankelumber.com August 2015

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Frosty Screws

GRK Fasteners’ line of White Cabinet Screws blend perfectly with white cabinet frames without the need for sticker covers.

Their unique design avoids binding and reduces the risk of damaging both the screw head and cabinet material.

All heads are powder-coated for added durability, avoiding the loss of coloring as they are driven in. The screws have a unique design that avoids binding and reduces the risk of damaging both the screw head and cabinet material.

Avalon Aluminum Railings

by Dynamic Railing Systems feature strong, durable, powdercoated, rust-proof aluminum preassembled railing panels.

Available in three colors (white, gloss black, satin black), they include complete pre-built panels and easy-install brackets.

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Reliable Railing

(800) 488-7245

Insulated Headers

Metsä Wood’s Master Header combines two high performance materials into a one-piece, dimensionally stable, structural LVL header offering high speed installation and an R-value of 20.

Lightweight, easy to cut and install, it meets the newest International Energy Code requirements.

 METSAWOOD.COM (810) 824-4890

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Building-Products.com

High-Performance Windows

Fast-Acting Grinders

Simonton Windows Reflections 5500 collection is a highly customizable replacement window line, allowing customers to select from operating styles; exterior, interior and hardware color; and glass and grid options.

The line comes with an advanced locking system that secures the sash at multiple points with easy-touse crank handle.

Its classic beveled frame design is said to complement any style of home.

 MILWAUKEETOOL.COM

 SIMONTON.COM (800) 746-6686

Milwaukee Tool’s new cordless braking grinder stops accessories in less than two seconds with a rapid stop braking feature and kickback-reducing clutch, while delivers up to 10 times longer tool life.

To increase comfort and reduce fatigue during extended use, an anti-vibration handle reduces vibration, while an extremely thin body design delivering optimized balance to rest easily in the users hands.

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Packed Inland event confirms continued industry growth

S

PIRITS WERE HIGH at the Inland Lumber Producers’ 32nd annual golf tournament, as hundreds of industry professionals gathered July 16-17 at the Coeur d’Alene Resort, Coeur d’Alene, Id. The event featured the tournament, a golf “horse race,” and BBQ at Hayden Lake Country Club. Guests enojyed breakfast and lunch mixers at the resort’s Lakeview Terrace, which brought opportunities for networking and family fun.

After guests enjoyed a cocktail cruise to the closing banquet, Potlatch Corp.’s Bob Mai presented awards to the tournament winners, amid high hopes for an improving industry.

(More photos on pages 60-63) LAKE VIEW: Guests enjoyed a boat ride on Lake Coeur d'Alene. (L-r) Joesph Buttice, Gage Holland, Sean Coughlin, Dan Jensen, Terry Johnson, Taylor Bradish.

MASSIVE CROWDS followed the golfers from hole to hole in the Horse Race event, during which teams were eliminated one by one until only one remained. First place winners Mason Anderson & Luke Wenner won $200 gift cards, sponsored by Idaho Forest Group. Lynn Wood & Travis Vezina placed and took home $150 gift cards, courtesy Merritt Bros. Jack Henderson & David Clutterham showed, winning $100 cards, courtesy Blue North Forest Products.

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Building-Products.com

INLAND LUMBER PRODUCERS Photos by The Merchant

INLAND LUMBER Producers Association’s annual golf tournament (continued from page 60) gave industry leaders a chance to network and share about each other’s businesses. [1] Ken Koenig, Ricky Palmiter. [2] Noah Devorshak, Jason & Mary Jacobson, Jean &

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Steve Wilson. [3] Brinley, Katie & Cody Peterson, Bri & Erick Sykora, Allen Knieper, Sammy Saunders. [4] Garth Williams. [5] Robert Beeler. [6] Erol Deren. [7] Mason & Wendy Anderson, Dawn & Mark Rau. [8] Sheri & Rick Northrup, Amber Dunham. [9] Marc

August 2015

Brinkmeyer. [10] Mike Henley, Anton Ruhdorfer, Jenny & James Mortimer. [11] Paul & Cynthia Walden. [12] Bruce Tays, Pat Miller.

[13] Scott Atkison, Leslie & Chris Pease. [14] Angela & Kris Breuing, Jill & Joe Angelo.

(More photos on next three pages) Building-Products.com

INLAND LUMBER PRODUCERS Photos by The Merchant

INDUSTRY GETAWAY (continued from previous pages): [15] Larry Schmedding, Steve Sprenger. [16] Terry Johnson, Harris Gant.

[17] Mark Dutton, Gale Theroux. [18] Bobbie & Dennis Buttice. [19] Mike & Jennifer Henley, Paul Owen, Lori Spilker. [20] Greg Netzley, Building-Products.com

Peter Howe, Kent Marks. [21] Mike Flynn, Mike Theberge. [22] Kevin & Carly Dodds, Jim & Sue Shelton, Joe & Tasha Buttice, Howie Halcomb. [23] Jamie Hursh, Mark Mitchell. [24] Michele Mitchell, Howard Raff. [25] Boyd Bower, Ron Tiller, Kurt Batey. [26] Sheila, Tom

& Juanita Beeler. [27] Scott Elston. [28] Dave Cochenour, Kevin Lang, Ken Koenig. [29] Dave Stokes, Matt Beymer, David McKinney.

[30] Barry & Linda Schneider. [31] Dan Seid, Terry Baker.

(More photos on next two pages)

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Photos by The Merchant

INLAND LUMBER PRODUCERS

GOLF TOURNAMENT awards (continued from previous pages) were presented by [32] Potlatch’s Bob Mai during the closing banquet. [33] Merchant Magazine publisher Patrick, Olivia & Shelly Adams. [34] Shenell & Grant Phillips, Katie Bradish, Joe LaBerge, Carly Dodds. [35] Rhonda Melton, Mike Hull. [36] Matt Hamilton, Anita & Jared Denney. [37] Ali & Jim Murray, Rhonda Milton, Marty Wilson, Dave Bourne, Steve Roberts. [38] Matt Vaughn, Bill Hetland. [39] Aaron Babcock, Heath Hutchison, Russ Hobbs. [40] Derek & Bridget Dryden. [41] Chery & Bob Lackey.

[42] Ron Hanson, John Bransetter. [43] Dan Mandeville, Mary Jo Nyblad, Frank Peterson. [44] Bob Mai. [45] Mike Flynn, Mike Theberge. [46] Tyson Sunds, Tom Lund. [47] Brad & Karyn Schneider. [48] Teresa Kimball. [49] Elaine & Reid Schooler.

(More photos on next page)

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Building-Products.com

INLAND LUMBER PRODUCERS Photos by The Merchant

INLAND GOLF (continued): [50] Jack Donovan, Timi & Ryan Leggett, Troy Wilharm, Julie Shiflett, John Wagenhofer. [51] Dennis & Bobbi Buttice, Pat & Dave Tripp. [52] Gunnar & Marjie Brinck, Don Graver. [53] Ron Liebelt, Todd Gallant. [54] Ashley Boeckholt, Michael Moulton. [55] Matt Hamilton, Erick Sykora, Cody Peterson. [56] Leianne & Carter Stinton.

[57] Susie & John Malloy. [58] Tracey & Justin Badraun. [59] Gina Pearsy. [60] Laurel & Chuck Casey. [61] Evelyn Currie, Jim Vandergrift. [62] Linda Elliott, Ron Enyeart. [63] David Slaughter, Jake Kimball, [64] Dawn Cochenour, Kelsey Kline.

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PVC Trim Expertise (Continued from page 14)

We were already using an industrial heating blanket to curve PVC decking into outdoor stair treads. So we softened up an appropriate length of

moulding and passed it up to the carpenters on the scaffolding. They held it in place with their hands and a few well-placed Cortex fasteners until it cooled off, and in a few minutes we had a curved trim piece that fit just perfectly. All we had to do was take it

CURVED TRIM such as on these windows and pergolas is now possible with cellular PVC.

888-807-2580 Bend, OR

www.pelicanbayfp.com DISTRIBUTION LOCATIONS Colton / Fontana / Modesto / Salinas / Stockton, CA PRODUCTS & SERVICES Framing Lumber / Pallet Stock / Industrial Lumber / Softwoods Hardwoods / Cedar / Fencing / Decking / Redwood Custom Cut Stock / Treated Lumber / Tile Battens 3-Hole & Slotted Vents / Custom Cutting / Remanufacturing Heat Treating / Fire & CCA Treating

“Focused on the future with respect for tradition”

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down, miter it, and then fasten it in place permanently.

“In both cases,” Cracco said, “without the kind of exposure that distributors and manufacturers offer at trade shows and local events, we might have been scratching our heads instead of getting the job done.”

“Glad we could help,” said Kramer. “Whatever material you’re demonstrating, it’s crucial to have an expert installer who can answer questions, make sure all the installation details are covered, and then open up some new possibilities. When we produce the Riverhead Building Show, for instance, we know that at this point builders know the basics—what PVC trim is, and how it’s going to perform. So now, instead of the question, ‘What can’t we do with it,’ we’re ready to answer the question, ‘What else can we do with it?’”

– Rick Kapres is VP of sales and marketing for Versatex Building Products, manufacturer of Versatex brand cellular PVC exterior trim materials and systems, such as trimboards, sheet, bead board, soffit, and moldings and prefabricated corners. He can be reached via www.versatex.com.

PST is located in Weed, CA, the historical heart of the West’s timber country, ideally situated on Interstate 5 to service all of California and the Western U.S. • NatureWood® brand ACQ treated products • Advance Guard® brand Borate treated products • TSO (Treating Service Only) available.

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Building-Products.com

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www.reellumber.com Building-Products.com

Dale Bohannon. [4] Nathan & Lynn Osborne. [5] Mark Michie, Lisa Rains. [6] Charles Bohnhoff, Charlie James. [7] Marty & Randy Porter.

[8] Kyle, Kathy, Chris & Bill Fitzgerald. [9] Heidi & Stephen Ondich. [10] Alan & Dana Arbiso.

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t Reel Lumber Service, we supply domestic and foreign hardwoods.

Our products and services include: • Hardwood Lumber & Pine • Hardwood Plywood & Veneers • Melamine Plywood • Hardwood Moulding (alder, cherry, mahogany, MDF, maple, red oak, paint grade, pecan hickory, white oak, walnut, beech) • Milling (moulding profiles, S2S, SLR1E, SLR2E, & resawn lumber) • Woodworking Accessories (appliques, ornaments, butcher blocks, corbels, etc.)

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ur products are widely used in interior finish carpentry, furniture, cabinetry and hundreds of industrial and manufacturing applications. We stock a complete line of complementary products to complete virtually any woodworking or millwork project.

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Photos by Cliff Robbins

LOS ANGELES Hardwood Lumberman’s Club chartered a sunset dinner cruise for members and guests. The yacht sailed out of Newport Beach, Ca., on June 27. [1] Jim & Tracey Gaither, Kit Rohm, Dan Bohannon. [2] Walter & Joyce Ralston. [3] Gary Swaner, John Mortati,

ASSOCIATION Update Mountain States Lumber & Building Material Dealers Association during its upcoming fall conference will fete member Scott Yates, Denver Lumber, Denver, Co., who is being installed as chairman of the National Lumber & Building Material Dealers Association.

MSLBMDA’s event takes place Oct. 28-30 at The Broadmoor, Colorado Springs, Co. West Coast Lumber & Building Material Association has booked Ken Wilbanks to address “Creating a Culture of Excellence in All Aspects of Your Organization” at its annual convention Oct. 14-15 at Mandalay Bay Convention Resort, Las Vegas.

Also on the agenda: golf, opening reception and products expo, new NLBMDA chair Scott Yates on “Watching Your Backs in Washington, D.C.,” and Greg Brooks on “Dancing with Elephants: Emerging Opportunities in a Changing Industry.”

Los Angeles Hardwood Lumberman’s Club is hosting its annual Alan Bohnhoff Memorial golf tournament Sept. 3 in Yorba Linda, Ca. Western Hardwood Association is celebrating its 60th anniversary during its annual convention Aug. 18-21 at World Forestry Center Portland, Or. Tacoma-Olympia Hoo-Hoo Club’s next board meeting is Sept. 23 in Tacoma, Wa.

IN Memoriam W. Ray Williams, 97, retired vice president for Kimberly-Clark Corp., died July 8 in Redding, Ca. A graduate of Northwestern University, he joined the U.S. Navy in 1941. During World War II, he received graduate business training at Harvard and served in both the

CLASSIFIED Marketplace Rates: $1.20 per word (25 word min.). Phone number counts as 1 word, address as 6.

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Deadline: 18th of previous month. Send ad to david@building-products.com or Fax 714486-2745. Make checks payable to 526 Media Group.

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Atlantic and Pacific theaters during as a supply and cargo officer.

At the end of the war, he joined the company’s Wisconsin headquarters as a financial officer. He was appointed general manager of its forest products division and relocated to its Anderson, Ca., lumber and paper operation in 1962. He was promoted to corporate VP overseeing all timberland and wood product operations in the U.S., before retiring in 1976.

Wayne Vance Derricott, 75, owner of Islands Park Builders Supply, Island Park, Id., died of natural causes July 22 in Macks Inn, Id. He and his wife, Marie, purchased the business in 1972.

David Charles Clapp, 61, former lumber salesman with Max Ker & Son Lumber Co., Idaho Falls, Id., died July 18 in Idaho Falls.

He joined Ker in the mid-1970s as a truck driver, later moving into sales during a second stint with the company. He stayed on until his battle with multiple myeloma forced him to retire in the late 2000s.

Gerry Van Leeuwen, 66, global wood products consultant, died July 3.

He began his career in 1972 with Sauder Industries in moulding and door sales, moving to lumber sales with its Whonnock Industries division (International Forest Products, Vancouver, B.C.) in 1979. He was promoted to general manager of Interfor’s four whitewood mills in 1987.

In 1998, he joined Wood Markets (R.E. Taylor & Associates), becoming a key contributor to most of its publications and studies.

John Leber, 70, president and owner of Swanson Bark & Wood Products, Longview, Wa., died July 10 from injuries sustained in a workplace accident two days earlier.

Workers were constructing a retaining wall on top of a soft sand, when the wall collapsed, burying Leber under two 3,000-lb. concrete blocks. It took about 15 minutes to free his body using a crane. He was rushed by helicopter to a medical center in Vancouver, Wa. A U.S. Army veteran of the Vietnam War, he purchased Swanson Fuels in 1994 and renamed the business to reflect the new product lines he expanded into.

Building-Products.com

DATE Book Listings are often submitted months in advance. Always verify dates and locations with sponsor before making plans to attend.

California Construction Expo – Aug. 13, Long Beach Convention Center, Long Beach, Ca.; www.calconexpo.com.

Western Hardwood Association – Aug. 17-20, annual convention, World Forestry Center, Portland, Or.; (360) 835-1600; www. westernhardwood.com.

Mountain States Lumber & Building Material Dealers Assn. – Aug. 20, Western Slope golf tournament, site TBD; (800) 3650919; www.mslbmda.org.

Ace Hardware Corp. – Aug. 20-22, fall market, Chicago, Il.; (630) 990-7662; www.acehardware.com.

Black Bart Hoo-Hoo Club – Aug. 21, clay shoot & BBQ, Black Point Sports Club, Petaluma, Ca.; www.blackbarthoohoo181.org.

ADVERTISERS Index Arch Wood Protection [www.wolmanizedwood.com].........Cover I Boise Cascade [www.bc.com].......................................................56 BW Creative [www.bwcreativerailings.com]................................54 C&E Lumber Company [www.celumber.com] .............................41 Capital Lumber [www.capital-lumber.com]..................................22 CMPC USA [www.selex.cl] ...................................................Cover II Collins Products LLC [www.collinsco.com] ..................................5 Fasco America [www.fascoamerica.com]....................................28

Orgill – Aug. 27-29, fall dealer market, Ernest N. Morial Convention Center, New Orleans, La.; (800) 347-2860; www.orgill.com.

Fiberon [www.fiberondecking.com].......................68A-B, Cover III

Pacific Northwest Association of Rail Shippers – Sept. 15-16, fall meeting, Cedarbrook Lodge, Seattle, Wa.; (503) 656-4282; www.pnrailshippers.com.

Hoover Treated Wood Products [www.frtw.com]............10A-B, 11

National Association of Women in Construction – Sept. 2, annual convention, JD Marriott, Indianapolis, In.; www.nawic.org.

Los Angeles Hardwood Lumberman’s Club – Sept. 3, Alan Bohnhoff golf tournament, Black Gold Golf Course, Yorba Linda, Ca.; (626) 445-8556; www.lahlc.net.

Eko-Las Fair of Forestry – Sept. 3-5, Janow Lubelski, Poland; ekolas.mtp.pl/en.

San Diego Home Show – Sept. 9-11, Convention Center, San Diego, Ca.; (888) 433-3976; www.acshomeshow.com.

Fontana Wholesale Lumber [fontanawholesalelumber.com].....57

Huff Lumber Co. [www.hufflumber.net] .......................................24 Humboldt Redwood [www.getredwood.com] ........................25, 59 Jones Wholesale Lumber [www.joneswholesale.com] ..............15 Kelleher Corp [www.kelleher.com] ...............................................13 Keller Lumber .................................................................................56 Kop-Coat [www.kop-coat.com] .......................................................7

BC Wood – Sept. 10-12, Global Buyers Mission, Whistler Conference Center, Whistler, B.C.; (877) 422-9663; www.bcwood.com.

Manke Lumber [www.mankelumber.com]....................................55

Western Red Cedar Lumber Association – Sept. 10-12, Cedar Summit, Whistler Conference Center, Whistler, B.C.; (877) 4229663; www.bcwood.com.

Mid-Columbia Lumber [www.mcl-ewp.com] ................................51

Horizon Distribution Inc. – Sept. 11-13, annual market, Sundome, Yakima, Wa.; (800) 541-8164; www.hdiretail.com.

Hoo-Hoo International – Sept. 11-15, annual convention, Hilton Airport/Mall of America, Minneapolis, Mn.; paul.boehmer@ weekesforest.com.

Composite Panel Association – Sept. 13-15, fall meeting, Hyatt Regency Coconut Point, Bonita Springs, Fl.; (703) 724-1588; www.compositepanel.org.

True Value Co. – Sept. 18-20, fall market, McCormick Place West, Chicago, Il.; (773) 695-5000; www.truevaluecompany.com.

North American Wholesale Lumber Association – Sept. 21-24, Wood Basics course/Executive Management Institute, Oregon State University; Corvallis, Or.; (800) 527-8258; www.nawla.org.

Tacoma-Olympia Hoo-Hoo Club – Sept. 23, meeting, La Quinta Inn, Tacoma, Wa.; (253) 531-1834.

Forest Products Society – Sept. 23-25, window & door symposium, Forest Products Laboratory, Madison, Mi.; (770) 209-7257; www.forestprod.org.

Jensen Distribution Services – Sept. 23-25, fall market, Spokane Convention Center, Spokane, Wa.; (800) 234-1321; www.jensenonline.com.

RISI – Sept. 28-30, North American conference, Intercontinental Hotel, Chicago, Il.; www.risi.com.

Forest Products Society – Sept. 28-30, introduction to sood science & forest products course, Mississippi State University, Starkville, Ms.; www.forestprod.org.

Construction Specifications Institute – Sept. 30-Oct. 3, annual convention & show, St. Louis, Mo.; www.constructshow.com.

Building-Products.com

MCL Engineered Wood [www.mcl-ewp.com]...............................51

Norman Distribution Inc. [www.normandist.com].......................57 North American Wholesale Lumber Assn. [www.nawla.org] .....33 Nu Forest Products [www.nuforestproducts.com] .....................49 Pacific States Treating [www.pacificstatestreating.com]...........64 Pelican Bay Forest Products [www.pelicanbayfp.com]..............64 Pennsylvania Lumbermens Mutual Insurance [plmilm.com] .....37 PPG Architectural Coatings [www.ppgac.com]...........................23 Quattro Post [www.quattrotimber.com] .......................................50 Regal Ideas [www.regalideas.com]...............................................53 Redwood Empire [www.redwoodemp.com].................................43 Reel Lumber Service [www.reellumberandhardwoods.com].....65 Reliable Wholesale Lumber [www.rwli.net] .................................17 Roseburg Forest Products [www.roseburg.com].............Cover IV Simpson Strong-Tie [www.strongtie.com]..............................34-35 Swanson Group Sales [www.swansongroup.biz] .........................3 Synergy Pacific Engineered Timber [www.quattrotimber.com].50 TruWood Siding [truwoodsiding.com] ...........................................5 Universal Forest Products [www.ufpedge.com]..........................39 August 2015

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FLASHBack 60 Years Ago This Month

A s we look back to August 1955, construction was booming and The Merchant had established itself as the premier publication of the LBM industry, with new construction that year expected to reach a record-breaking $41.8 billion.

That summer, the country welcomed the birth of Disneyland, one of America’s most beloved theme parks. In all, lumber companies in the region supplied 3.5 million bd. ft. of wood products for the park’s construction. An old Los Angeles mansion with its wood paneling, stained-glass windows, and crystal chandelier, supplied much of the

interior of the Delmonicostyle Swift’s Red Wagon Inn, and other portions of Main Street buildings.

The Merchant dedicated a section in its August issue to inform its readers of the 160-acre theme park, not knowing that the fledgling 1,000-worker operation would turn into today’s 500acre resort with 28,000 employees—itself just a fraction of a global empire.

The park’s construction helped push Southern California building permits in the first AUGUST 1955 issue of California Lumber Merchant spotlighted White Brothers, even then a venerable producer of quality hardwood millwork. Today, the company continues offering both hardwood and softwood moulding from its mill and showroom in Oakland, Ca.

FUTURE HAPPIEST PLACE ON EARTH: When Disneyland opened in Anaheim, Ca., 3.5 million bd. ft. of lumber went into the construction for it.

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six months of the year above the billion dollar building mark for the first time in history. Permits just in Orange County nearly doubled their 1954 totals.

• Also this month, the Douglas Fir Plywood Association introduced the craftboard cartop carrier as “something really new in a merchandising idea—simple, useful and one that takes the dealer’s name home with the customer.”

The car top was designed for the lumberman or hobbyist to carry large and small panels of plywood on top of their car without damaging the car’s finish.

• In June of 1955, the Western Fir Plywood Manufacturers Association unveiled a permanent memorial in the forestry building in Portland, Or. The memorial contained the first panel of fir plywood manufactured 50 years prior for exhibit at the Lewis and Clark Exposition, and was hailed as “a great and fitting tribute and a permanent reminder of an industry which has grown from this small panel to becoming a keystone in the economy of the Northwest.”

Building-Products.com

What is the only composite decking and railing brand that: •

Has manufacturing plants on both the west and east coasts?

•

Makes a capped, four-sided, WPC deck board with two usable faces?

•

Has the most complete product line-up?

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Introduced the first co-extruded composite railing?

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Has both capped WPC and PVC decking approved for use in CA WUI zones?

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Offers a 5-year labor warranty for accredited builders?

It might surprise you.

Find out inside.

LOOK INSIDE

Working for you.

Teresa Clark Engineered Wood Shipping Supervisor, 12 yrs.

Engineered Wood Products Real Wood Siding www.Roseburg.com 800.245.1115

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