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Supplier-Side Remodeling Economics
Leah Thayer / daily5 Remodel / September 18, 2013
In the late 70s, a young man with a tiny contracting business ran into some financial problems. His work consisted mainly of decks, fencing and repairs, so he wasn’t exactly a major client of his lumberyard, Truitt & White, Berkeley, Calif. But he reached out to his contact there and explained the situation: A customer hadn’t paid him and he was in a pinch, “so would I be willing to work with him?” remembers Mark Pearsall (right), now general manager and vice president of sales and marketing at the 67-year-old building materials dealer.
Pearsall gave the young contractor a chance, “and we’ve been rewarded with his loyalty ever since. He went on to build that little business into one of the most significant in the Bay Area.”
There it is: Mutually beneficial reason #1 for remodeling contractors to open up to their local lumberyards and other suppliers — and to share not just their immediate ordering needs, but also their long-term goals, short-term challenges and generally best efforts to welcome suppliers as members of their satellite teams.
“A lot of people get into this business on a shoestring, without very sophisticated financial backgrounds,” said Pearsall. “We want to be their partners. We want to take the time and really understand what they’re up against. The better we can serve them, the better we all do.”
Here are a few means to that end.
Drop the guard
From his office in Boise, Idaho, Rick Lierz (below) sees an endlessly friendly and accommodating horizon laid out by pro-oriented suppliers for remodelers. The biggest roadblock? Contractors who “struggle to trust our advice because they’re suspicious that in some way we’re trying to take advantage of them.”
Give trust a chance, said Lierz, president and CEO of Franklin Building Supply, with 17 locations in Idaho and Nevada. “It’s not about us making money on their backs. It’s about us making money together.”
Understood that many remodelers are still nursing wounds from the downturn, and are skittish about ever letting control out of their hands again. So are many suppliers. And now, in the mutually dependent ecosystem in which both business types operate, “we live and die by the philosophy that we’re here to help our customers make money.
Truitt & White’s Pearsall agrees. Remodelers comprise about 80 percent of his company’s business, and “I want them to rely on me for everything they do. If they’re struggling, we want to take the time and understand what they’re up against.