At BMC, anniversary of a merger
It’s been about a year since BMC acquired Stock Building Supply.
“With a lot of work still taking place behind the scenes, the success to-date of our combination is apparent in our numbers,” said CEO Peter Alexander, in the company’s third-quarter earnings call.
Net sales soared and net income rose in the third quarter, a quarter distinguished by the expansion of its ReadyFrame “whole house solution,” and progress on the technology front, said Alexander.
ReadyFrame grew 43% over last year's third quarter to $28.6 million, representing about 3.5% of total company revenue. With recent entries into the Washington, D.C.-Manassas, Virginia area and Raleigh, North Carolina, it’s now available in the company’s entire footprint of major markets.
In an interview with HBSDealer, Alexander called ReadyFrame a solution to the pressing labor problem faced by BMC customers.
“Most important to us, ReadyFrame provides a solution to the builder that is beyond just selling a product,” he said. “We’re fixing a labor problem for them. And that’s pretty unusual for a lumber dealer to be talking about solving a solution like that.”
Under the proprietary ReadyFrame system, lumber is cut to precision by computerized saws, automatically labeled and delivered to the site to be assembled. At BMC, the program is fine tuned to the point where “We can guarantee the dimensions to a 16th of an inch,” he said.
Another frontier for BMC is ecommerce, a program in its early stages that has launched in 14 markets,
Described as a “user-friendly 24/7 online access to our extensive product offerings with customer-specific pricing and real-time inventory tracking,” the ecommerce program provides options for customers. Prices are tailor-made based on credit history, payment history, purchase history and other factors.
There’s also an important benefit to BMC from the e-commerce initiative – actionable insights.
When a contractor searches the site for a product, that creates leads for the outside sales force.
“It complements the sales force,” Alexander told HBSDealer. “It’s not a competing, cannibalizing business.”
E-commerce is a sweet spot, but it’s going to take a couple years to develop into a significant part of the business, he said.
“It’s still a belly to belly business,” Alexander said. “The customer comes first. However the customer wants to do business, that’s the way we’re going to do it.”