Shrink to fit

fD,qcr rN rHE ony, Fullerton .l-ll-umber-launched in 1882 in Mitchell, S.D.-owned over 130 lumberyards in the Upper Midwest, mostly small-town operations located by the railroad tracks that sold everything from coal to chicken feed.

But as the company rolled into its third generation, Robert Fullerton II, more of a businessman than the preceding sticks-and-plywood guyswas of the mindset that less equates to more. In line with modern times, he started divesting the smaller yards and concentrating on consolidation, the better to be armed apainst the onslaught of the big boxes and in tune with customers' changing demands.

The current economic downturn hastened the regrouping. Outstate yards were sold in order to buy down debt and navigate the storm. The bucks to be had were no longer to be found in tiny operations in the likes of Yankton, Ia. Those days were over. Fullerton sharpened its focus by concentrating on a strong core of four stores in the l2-county area rimming the Twin Cities' urban center: two locations to the east in Osceola and Ellsworth. Wi.. and two to the west in Watertown and Glencoe, Mn. (plus headquarters in Plymouth, a suburb of Minneapolis).

The days of d-i-y are over, too: Today, Fullerton has upped its revenue by focusing strictly on its pros: builders, developers, remodelers. And it's paying off.

Sales manager Mike Simon also realigned the outposts' outlook. No longer does each general manager run his own location as an independent kingdom sans working with his colleagues. Used to be, says Simon, one store's driver would speed past another Fullerton store enroute to a delivery. Now, the items are rolled out of the closest operation, while the originating store's salesman still retains credit for the sale.

And there's no need for showrooms anymore, either. They've been replaced-updated-by iPads, one to a store, to carry to the customer ("He doesn't need to come to us anymore") to display all available products with the mere touch of the screen. Similarly, smartphones and GPS devices also allow instant tracking, which thrills builders waiting at the jobsite. Soon, even drivers and forklift operators will be equipped with these bells and whistles, too. "Our industry is slow to embrace (that kind of) technology" says Simon, " but you've got to think: What's important to our customers? They need information quickly in order to be better at their own business."

Speaking of showrooms-or lack thereof-another new "showroom" is the Volvo station wagon of a salesper- son working, say, on a kitchen remodel. She simply loads choices of cabinets, or whatever, into her car and drives them to the customer who's mulling over a project, explaining all the options and walking her through the steps right in her own home.

Staff training has undergone a massive change of direction, too. The typical product-knowledge sessions are just table stakes. What Fullerton provides is actual training in sales skills, such as communicating, attitude, and negotiating.

"When times were good, you just took their order," Simon says. "Now, you need to prospect and to network. As the industry changes, clients expect more from you, like problem-solving, better service-not just the best price. Sure, the salesmen had to struggle to change, but they've learned how to better reach their customers; they're going to trade shows, joining builders' organizations, getting leads via Keystone, pulled permits, going to the jobsite. By visiting the Parade of Homes venues, they discover who's building what, and where. Then they investigate those potential customers, do research, asking 'Tell me what you need!' They're forming ties, not only with realtors, but also folks that do insulation, concrete, framers-a whole platform of avenues. And we've formed new relationships with our vending partners, such as Boise Cascade and Marvin, so our salespeople can visit their plants. lt keeps us on the cutting edge."

And are these salespeople committed? You bet. Once they reach a certain sales level, they're rewarded with a free pick-up truck (and l3 ofthe present 16 already are driving that carrot.)

Negotiating discounts for quantity buying for all four locations is a bonus, agrees president Dave Walock. But that doesn't mean each facility blindly follows in lock-step. "Certain customers want specific products, so you defer to what your customer is looking for," he says. "One custom builder wants only the best, wainfree lumber, premium quality, while another is a market strategist doing a subdivision where price is an issue. You've got to look for the sweet spot. And you've got to look for the whole package: If you're not selling him cabinets, why not? All of a sudden, we become extensions of them. And that's why we'll make ten deliveries to a single site if we have to, if the builder needs it."

Customers are completely different, store-to-store and day-to-day, from the ag guy building a pole barn to someone putting up a small office building or an airplane hangar. There's the firsttime homeowner, the remodeler, the builder of upscale custom homes, those working on multi-family buildings or assisted living projects. Says Walock, "lt's everyone from an ag customer in overalls to the builder-as-businessman in a suit and Range Rover. So our challenge is to coach salespeople with the skills to talk to all that, from the higher-volume, business-minded fellow to the small remodeler, one-on-one.

"The biggest piece of our pie," he reports, "is new homes for the firsttime buyer. We did 65 last year and probably 75 this year. Most are in the $500,000 to $750,000 range, but many are in the $350,000 to $450,000 market, too. Lots of activity for single homes, and for multi-family homes, too. We just did a 12O-unit building in Plymouth and have three more onboard. However, it's the remodeler who remains a challenge. You've got to understand the cost of doing business-maybe a delivery of a single item: Can you make money on that?"

Well, one certain way to make money go further is to require, as Fullerton now does, that all managers wear multiple hats. "The day of the general office help are over," Walock testifies. "Everyone has cross-training. And all do some part of the buying-lumber, OSB, shingles, insulation, exterior doors."

With Fullerton now ensconced on stronger footing, Walock takes a break to look at the larger economy. "House sizes are trending smaller," he says, "due to the cost of land as well as mindset. People are buying both in the exurbs and inner-city infill. When the economy was at its worst, builders shed spec homes and land to save money. Now, in 2013, they've nothing to show. But banks are willing to lend again, with very attractive interest rates, so builders are starting to step up. People are gaining confidence, and home values are starting to appreciate. Are their margins better? Yeah, a little. But land will be the spoiler, so we have to wait to grow our own [margins]. Are we there yet? No, but we're gaining good mileage!

"And we've got staying power. The Fullerton family has owned the company for over 130 years, and they have attained a balance between being community partners and being a business. It's not all about the numbers and the dollars, but a balance, and a very clear sense of a family business-how we operate, our culture."

And, yes, that's matriarch

Marna Fullerton, age 79, still at her desk at the front of the store. Talk about commitment!

Carla Waldemar cwaldemar@comcast.net