Pro dealers point to challenges
Arlington, Va. -- Three operators of successful and growing lumberyards put their fingers on the pulse of the LBM industry and offered a prognosis for opportunities and challenges.
Speaking here at the National Lumber and Building Material Dealers Association Spring Meeting & Legislative Conference, all three panelists used the phrase "pent-up" to describe demand that softened during the harsh winter. Gary Farber, president and CEO of Gordon Lumber in Fremont, Ohio, said the weather situation could be viewed as "God letting us know he's still in charge." Sales at the six-unit dealer are off about 18% as a result of the cold and snow. But the company still expects to hit double-digit growth in 2014.
But there was plenty to talk about beyond the weather, and Farber and fellow panelists Jon Hallgren, of Curtis Lumber, and Greg Smith, of E.C. Barton & Co., delivered a wide range of observations on industry issues.
For instance, there's the increasingly difficult challenge of labor management.
"Finding quality, motivated employees is a real challenge," said Hallgren, Curtis Lumber's VP retail operations. Curtis Lumber is based in Ballston Spa, N.Y.
Others on the panel explained that their HR departments look to hire talent that can grow into increasing levels of responsibility, but many younger applicants "want it now," said Smith, who is chief purchasing officer for E.C. Barton, based in Jonesboro, Ark. "It's the microwave generation. They don't want to wait."
The panel discussion was organized by and presented to the NLBMDA's Manufacturers & Services Council Meeting held Monday. M&SC chairman Roger Dankel of Simpson Strong-Tie asked the group to describe their challenges.
One answer: the lack of consumer loyalty. "Tastes can change with a single tweet," said Smith, referring to the social medium of Twitter. "And that's hard to manage."
The lack of brand loyalty affects the cost of the house, also. Home buyers looking to cut 5% to 10% out of the cost of their final product will seem more willing to trade down in windows, doors and siding, said Hallgren. That's having a negative affect on delivery costs to sales ratios.
Hallgren also took up the flag of the Innocent Sellers Act, one of the NLBMDA's priority issues. He pointed to the steady irritation of asbestos fast-tracking lawsuits, in which "you're basically guilty until you can prove yourself innocent."
Asbestos products were sold decades ago, as required by various building codes. But still the lawsuits target home center companies who are completely innocent sellers. The reason: Lawyers follow the money. "There's nobody else left with money," Hallgren said.
Other regulatory issues of growing importance highlighted by the panel included:
• Online sales tax, or lack thereof, that allows online retailers an unfair advantage over brick-and-mortar retailers;
• The increasingly aggressive policies at the Operational Safety and Health Administration; and
• The overgrowth of workman's compensation rules.
And responding to a question about vendor-dealer relationships, the panel suggested supplier reps would be better served to ask more questions and listen to the needs of he individual yard, as opposed to selling from an agenda. And also, if a problem arises between vendor and dealer, the dealer panel pointed to the necessity of fast resolution.
The panel presentation and MSC meeting was part of the annual legislative conference that brings NLBMDA member pro dealers to Washington, D.C., to bring their message directly to their representatives in Congress.