Put Lumberyards to Work

By Walt Stoeppelwerth. Today's remodeling customers often research products on the Internet before or during their projects. But they also go to home centers, which feature kitchen and bath vignettes. Today's clients still want to touch and feel most products before making a buying decision.

Showroom opportunity

For this reason, remodelers need a retail showroom to satisfy their customers, although for most, a full-scale showroom is not cost effective. What can fill the gap? Lumberyards and supply houses.

It would benefit lumberyards to develop relationships with as many remodelers as possible and then provide them with a showroom selection center for as many products as needed. This could lead to installed sales situations, which would benefit both smaller remodelers and consumers looking for a contractor.

Bathrooms, for example, offer an excellent market opportunity. At this time, The Home Depot and Lowe's are both staying away from bathroom remodeling, but the market for bath remodels is strong, particularly in those 35 million homes built between 1946 and 1975, most of which have small and few bathrooms.

If lumberyards really want to partner with remodelers, their showroom selection center should not be confined to kitchen and bath products but should offer as broad a range of building materials and components as possible. Providing contractors with this sales tool would cement the relationship between the vendor making the product and the remodeling company specifying it. Lumberyards, of course, should reasonably expect to benefit by actually making those sales.

Business skills training

Most lumberyards don't offer training for remodelers. They believe contractors don't need it. Except for the top 5% to 10% of remodeling firms, they're wrong. While quality contractors understand, for instance, a 50% to 67% or higher markup over direct cost or a 100% markup for the handyman business, the majority of contractors still charge 15% to 20% markup. Training owners in the economics of running a business would eliminate this problem.

That training approach must also cover all the basic operating systems in residential construction, such as preconstruction conferences, the collection of monies due, writing change orders, pre-completion punch lists, and certificates of satisfaction. Manufacturers -- who will likely bear the training expense -- will also want to train remodelers in selling and using their products and services.

Lumberyards are in a unique position to train contractors about the differences between remodeling and handyman services. Educating remodelers in the nature of the handyman business will also provide lumberyards with installers for handyman-type products they carry, such as ceiling fans.

Spreading tech

While the top 10% to 20% of the remodeling universe will be able to make changes without help -- or already have -- the remainder will not. No entity is better situated to bring technology to remodeling contractors than the lumberyards they buy from. The reason's simple: As lumberyards start using technology to help manage their operations, they'll find the entire system awkward, or unworkable, unless they can extend this to their contractor customers. This means they must take the initiative to provide those customers with software, and maybe even hardware. The savings in reducing transaction costs alone will pay for the software. It follows that the lumberyard must also provide training in estimating, lead management, Quick Books Pro, CAD, and scheduling.

--Walt Stoeppelwerth is a publisher of management and estimating information for professional remodelers. (800) 638-8292; [email protected]; www.hometechonline.com.