LBM exec embraces a local focus

Indianapolis -- Gary Nackers has a front-row seat on the ups and downs of the many markets for building materials, as well as trends flowing through independent lumberyards around the country.

As VP lumber and building materials for Fort Wayne, Indiana-based Do it Best Corp., he's a proponent of local focus and business diversity.

The 75-strong LBM team at Do it Best Corp. -- professionals who've lived through recessions and recoveries, Nackers says -- is structured to facilitate sales, but also supply information. "Our position is not necessarily to go for the sale, but to give them the right advice," Nackers told HBSDealer. "We'll look at what should we be doing for the next 30 to 45 days -- should we be stocking up or just maintaining current levels."

The building material buyer in 2015 faces a more complicated environment than in previous years, particularly in OSB and lumber. Nackers listed a number of factors for this uncertain pricing environment, including the impact of exports to China, improved efficiency of mills and labor issues. An overall wet spring and summer delayed building projects, he added. And with a lack of skilled labor in various parts of the country, catching up will be a challenge.

"With lumber, usually you can look at cyclical trends and history," Nackers said. "But we've been off that pattern."

Adding to industry uncertainty, the Softwood Lumber Agreement between the United States and Canada expired Oct. 12, and it will be another 12 months before a new agreement can be put in place. It's unknown how the absence of duties will play out on lumber coming into the United States, he said.

At the same time, the industry is seeing new waves of consolidation through mergers, acquisitions and private-equity investments. Nackers position is clear: Bigger is not always better -- local is better. "The independent dealer that knows his market and knows his customers can generally provide better service," he said. "The independents can win in those markets."

One area where independents are finding opportunity is in the ancillary businesses of installed services and manufacturing. In fact, the market has rarely been more receptive, given labor shortages.

It wasn't too long ago when these businesses "were scrutinized with real concern as possibly taking business away from the core contractor customer," Nackers said. "But right now, they're solutions that customers need."

Business diversity plays a role in many high-performing lumberyards, he said. The repair and remodel side of the business represents another opportunity, especially as the economy improves, homeowners reinvest in their dwellings and houses continue to age. His advice: "Understand the repair and remodel business," which involves different products and services.

Other opportunities for high-performing lumberyards include rental and industrial commercial. In general, diversity is a powerful weapon in the independent's arsenal -- and that includes hardware and walk-in customers.

"When the housing market was booming, a lot of folks ignored the retail side of the business," Nackers said. "Quite a few have gone back to it, and it diversifies their business. Increasingly, diversity is important to success."