Lumber dealers, like builders, can be challenging to reach and succeed with because they usually buy through distributors or buying groups instead of directly from manufacturers.
If you want to reach the pro market, you need your product on the shelves of the lumber dealer. The pro market you’ll reach through lumber dealers is primarily smaller builders, remodeling and home repair contractors and builder sub-contractors. Few DIY’ers walk through lumber dealer doors.
Lumber dealers offer pros knowledgeable staff, product mix and the ability to get in and out with what they need to get the job done. They may also get job-site delivery from the lumber dealer.
You’ll find that lumber dealers vary greatly in size, format and number of locations. A few dealers, like 84 Lumber, have many locations and are probably large enough for you to sell them direct. The vast majority of dealers have one or just a handful of locations. In smaller markets there may only be one lumber dealer and it may even double as the neighborhood hardware store.
You mean profit for a dealer
Selling lumber accounts for about 40% of lumber dealers’ sales volume, but a lower percentage of their profit because the margins on lumber are very low. This creates an opportunity to show the dealer how selling your product increases his profit margin.
There are very limited opportunities to promote your product within a lumber dealer. The showroom is small and there is not a lot of space for point of sale. The most valuable spaces are the entry door, where you may be able to place a decal, or the order desk where you could display a poster, handout or countermat.
The yard has opportunities for large outdoor point of sale like banners on the fence or signs on the side of buildings.
The countermen in dealers are knowledgeable, but are often order takers. Do not count on them to sell your product, even with training or a spiff.
Instead, the dealers usually have outside sales people calling on builders to do take offs of their home plans and bid on an entire framing package. These outside sales people may be able to promote your product with the right education and support.
How to succeed with the lumber dealer
1. Determine your approach. Are you going to call on them directly or reach them through their distributor? You can also reach them through the many buying group and distributor shows. To be successful, you need to do more than just get an order and forget it. You should find ways to help the dealer sell their products through, which results in reorders and loyalty.
If you call on dealers directly who buy from a middleman, be sure to let the middleman know what you’re doing. You need to make sure he has your products in inventory and sees how you are supporting him, making it harder for a competitor to convert him.
2. Educate the dealer. While they probably won’t be a great salesman for you, they need to be knowledgeable enough to feel comfortable answering questions.
3. Support the dealer. Find out how he promotes his business and support it. Give ad materials to dealers who use printed advertising so it is easy to feature your products. Give them images, copy and even short videos to place on their websites. Suggest links that will make their sites more valuable to their pro customers. Make sure they are on the dealer locator page of your own website.
Give them some expertise. Have your internal or external marketing and online experts do an analysis of the dealer’s website, SEO and social media efforts.
You can also participate in his customer events. Most dealers have events at least once a year where you can meet the pros and promote or demonstrate your products.
Help Lumber Dealers Compete
The dealer’s biggest competitor is Lowe’s or The Home Depot. They have added contractor desks and outside sales people to call on pros. Help him compete. Big boxes get great manufacturer customer service at headquarters, but not as good as a lumber dealer can get on the local level. You can make that happen.
Big boxes have to be all things to all people. Help the dealer focus on an area and outperform the big boxes. Decks are an excellent example. Lumber dealers’ more knowledgeable employees can sell decks and deck components better than the big box. They can also be a deck contractor’s show room. The contractor can have customers look at deck displays at a lumber dealer without fear of losing the job to the big box installed sales group.
You can get some sales at lumber dealers simply by selling to their distributors, but if you want to maximize your potential, you need to commit to supporting dealers and not simply thinking of them as a small big box.