Startup abandons its LBM delivery model
Palo Alto, California-based BuildClub had big plans to disrupt the building products distribution model with an on-demand job-site building-product delivery service.
The Silicon Valley startup company last year boasted of a 258 percent in its reach, expansions into Boston, Chicago and Miami (where it promoted 2-hour delivery), and a 300 percent gain in revenue since 2021 — plus plans to launch in 15 cities in 2023.
Now comes plan “B.”
The company has a shifted to a pricing tool. It’s new website proclaims “Shop Home Depot and Lowe’s smarter with an AI copilot.”
“We’ve shifted from our original on-demand product delivery service to a model that we believe is more scalable, profitable, and most importantly, useful to our 77,000 registered customers,” wrote BuildClub founder Stephen Forte in a May 17 update. “Our focus has turned to developing cutting-edge digital tools that are tailor-made for the building materials market.”
BuildClub did not immediately respond to HBSDealer’s questions regarding the shift.
When the company announced its expansion a year ago, there was skepticism among LBM dealers that an on-demand building products delivery startup could compete with experienced players.
“I would welcome [BuildClub] to try and come into this market to get business,” wrote Joe Marino, president of Freedom Materials in Laurel, Maryland. “What he will find is that most of us can and have been doing same-day deliveries for years now; and at prices that are substantially lower than what he is offering. We also have boom trucks and flat bed trucks with Moffetts which have far more capabilities than a small flat bed truck shown in his pictures.”
Marino added that for contractors in a competitive market, in would be hard to justify a premium of 20 percent to 30 percent for same-day delivery.
Another industry veteran questioned BuildClub’s original mission of becoming “like Amazon Prime for building materials.”
“Who really wants to be the Amazon of commodity building materials,” wrote Jim Inglis, of Inglis Consulting, and a former Home Depot top merchandise executive. “There is a reason that Amazon is not a factor in commodity building materials.”
BuildClub’s new venture involves a browser extension that analyzes selected items at The Home Depot and Lowe’s stores nationwide, and alerts users if a lower-price item is found. The company’s web site also says it compares prices between Home Depot and Lowe’s.
The company’s newest pitch: “Imagine being able to find the lowest prices on building materials city wide with just a few clicks, or uploading your blueprints to get an instant quote for the materials? That's what BuildClub is all about.”
