August, 2007

H.J. Opdyke Lumber: Frenchtown, New Jersey

Swimming Upstream in a Down Market- H.J. Opdyke Lumber has survived a flood—and market ups and downs—with attention to details and its customer.

By Cheryl Dangel Cullen

On Aug. 18, 1955, Frenchtown, N.J., was hit with a devastating flood. The "Great Flood” of 1955 washed away homes and businesses, including most of a small lumber company called I.L. Niece & Son. After the disaster, only a shell of the business remained. The owner asked his employee, Howard John Opdyke, if he wanted to take it over. Opdyke said yes.

That’s how it happened that the H.J. Opdyke Lumber Co. rose out of the floodwaters.

With the business came the acreage the company sits on today on the north side of Frenchtown. In 1958, the company relocated from the site of the flood to its present location and it has been on high ground ever since.

Jack Opdyke, the owner’s son, jokingly says that he started working in the family business when he was three. Officially, however, he joined the company full-time upon graduating from college in 1975 with a degree in business and accounting.

"I told my parents that I’d stay for a year and move on. I really didn’t know what I wanted to do. Now I love the industry and can’t imagine doing anything else,” says Opdyke, who has now been with the company for 32 years. He took over as president when his father passed away in 1979. His mother remained active with the company until her death in 1998, but it has been Jack Opdyke who has led the business through its most prosperous and challenging times.

Riding the Wave of Success

In 1975, when Opdyke came on board, the company was a small yard with four employees and anuual sales of $300,000. Today, the company has 72 employees and annual sales of $29 million.

Opdyke credits much of the company’s early growth to the building boom in the late 1970s and early 1980s. "We also took a very aggressive approach, going after customers and growth. We tried to focus on people. Anyone can have buildings, trucks, and forklifts. The difference between us and everyone else would be how we treated our customers. That would be the biggest thing moving us forward.”

And move forward they have.

In addition to the Frenchtown location, the company has two other lumberyards and a new design center, and to date, its growth has been by acquisition. In 1995, Opdyke bought a yard in Belle Mead, N.J., located near the center of the state. In 2005, the company purchased another yard in Boonville, located in upstate New York.

H.J. Opdyke Lumber Co. is somewhat of an anomaly because its locations are spread across the map. The Boonville, N.Y. location was a particularly unique acquisition, coming about at the request of a former employee who had left his Opdyke job of 20 years to move to upstate New York. The former employee learned of a small lumber company going out of business and informed Opdyke, his former boss, that the property would be sold at the sheriff’s sale. "We hadn’t looked to expand in that area, but this employee worked with us for a long time and we talked about it. In short, we bought it and opened it up two years ago this summer,” says Opdyke.

Staying Afloat in a Down Market

With each passing year, sales from a market that is 95% contractor-based and 5% retail and commercial—grew—at least until 2006. "We never had a year where we haven’t increased sales and profits until 2006,” says Opdyke. "[And] this year will be a real challenge for us in an overbuilt state. Not only is there a down market, but land in New Jersey is at a premium.”

"We will probably always have new construction to a certain degree. We’re just not seeing mega developments but instead, builders focusing on smaller developments and high-end homes,” Opdyke adds, noting that the sluggish market has prompted him to tweak his approach to business. "Builders need a lot of support, and we’re also looking hard at the remodeling base, which we’ve always catered to as well as new construction.”

To overcome the challenges of a down market with little room for new development, Opdyke has focused on his original approach to doing business—servicing the people. "We do relationship selling,” says Opdyke, who has an outside sales force of three generalists, a custom window specialist, three kitchen salesmen, and an employee who does nothing but stair and rail sales and installations. "We get to know our customer and sell based on that relationship, versus selling price or quality. Everyone says they have the best price or quality. That won’t make you stand out. Attitude is everything.”

Business-Saving Education

Customer education is another part of Opdyke’s master plan to relationship selling. To date, the company offers two ongoing educational programs, as well as providing in-house marketing assistance.

Better Builders Breakfasts.

Opdyke regularly sponsors off-site breakfasts that feature a guest speaker of interest to the profession. Interestingly, the programs are not product-related. Instead, Opdyke will invite a lawyer to talk about contracts or an accountant to speak on tax-related matters and record keeping. Speakers have also included an environmental scientist, building inspector, and architect. "One of the best-attended breakfasts was one where we invited an orthopedic surgeon to talk about injuries to carpenters—how to prevent them and what to do to protect your wrist, shoulders, and elbows,” Opdyke says.

Breakfasts are typically more popular in the winter months, when Opdyke reports that they have had anywhere from 15 to 70 builders in attendance. The breakfasts are free to the builders and speakers appear free of charge. Most breakfasts are hosted at a restaurant that is mid-way between Opdyke’s two New Jersey yards. "The feedback has been great. A lot of people will say, ‘That was incredible. I don’t know of anyone who wouldn’t want to come to this.’”

The Opdyke College of Knowledge.

For more in-depth education, Opdyke’s College of Knowledge brings in industry professionals to educate builders in an intense, all-day session that is hosted off site. Recently, Opdyke brought in a remodeler from Arizona who talked about how to draw up contracts and how to track and account for jobs. This program is also offered at no cost to customers.

In-House Support.

Opdyke also has a marketing director on staff who will work with any customer if they need help creating flyers, newsletters, or door hangers. The company also has an attorney it works with who will help customers tweak their contracts.

Finding Room for Growth

By continuing these programs for customers, Opdyke hopes to both retain and build his sales. Acquisition is also part of his plan for future growth.

"The challenge is to find suitable locations at suitable prices to expand our business,” he explains, again noting that New Jersey now offers little vacant land. "In our state, it is not only land acquisition for our builders that is a problem, but expansion for our own business in a very populated state that is controlled by government regulations. We’re still open to acquisitions. But we manage our balance sheet very well, so if it isn’t a good acquisition, we won’t do it.”

Opdyke also sees opportunity in adding more installed sales. He currently has a solid program for stair rails and parts with one individual handling both the sales and the installations. Opdyke is just now venturing into installed doors, trim, and casings.

"That’s where I see our greatest opportunity with builders. I don’t want to compete with remodelers, but builders don’t want to buy the trim and hire a trimmer. They want one-stop shopping. By offering installation, we’re removing a problem for the builder. It isn’t any longer a question of ‘How much is it?’ Instead, they say, ‘I don’t have to worry about this anymore,’” he says. "Installing windows and things like custom stairs has had the biggest impact on our business and those are things we wouldn’t have thought of doing 10 or 15 years ago.”

Going Beyond Sticks

Selling more than lumber is where Opdyke sees the most opportunity. "The idea is to get into other areas than just sticks,” he says. Case in point, he recently opened a new design center that is primarily a showcase for kitchen and custom windows, located off site in Hillsboro, N.J. It is staffed during regular business hours, but is "open to builders virtually 24 hours a day,” says Opdyke, explaining that builders can bring customers through any time of the day or night by using a pass code, which allows them to use the space as their own office.

Opdyke spreads the word on his many offerings through several avenues including cable television advertising, which he targets to sporting events, car racing, and The Weather Channel. He will occasionally use an ad in a trade magazine, but doesn’t do a lot of print advertising. "We find that hands-on marketing, individualized to our customer, is better. We ask them, ‘What do you need?’ Mass marketing doesn’t work for us.”

Opdyke has had some success with marketing through the company’s web site, www.opdyke.com, which lets customers check the status of their orders, past invoices, and pricing. "They can also prepare their own quotes, but that isn’t that popular because I think they think that is our job,” he says, noting that he recently switched computer companies so that he will have the capacity to store customer information for an indefinite amount of time.

Given all the changes the company is implementing to better itself, it is virtually assured that the H.J. Opdyke Lumber Co. is building a solid reputation for itself that will be able to weather any future floods, whether they come from nature or the economy.

Sidebar: Builder Perks Cement Loyalty

H.J. Opdyke Lumber Co. has a sister web site called www.pro-opdyke.com, which is an Opdyke-created online directory of builders. Consumers who want to build a home or have an addition done can go to the site and look for names of referrals, which are classified in categories from remodelers and historical remodelers to new construction builders or deck installers.

Active customers who are current with their account can sign up to be listed. To get the word out, Opdyke has done a direct mail campaign as well as a fax blitz. "With the down market, we’ve had a lot of builders show interest in this added exposure,” he says.

Another perk for Opdyke’s customers is a Pro Bonus program, which allows builders to accumulate points based upon a percentage of their purchases. "By the end of the year, we have customers with several thousands of dollars worth of points that they can put toward a purchase. A lot of them will buy tools,” says Opdyke.

With more than 20 years covering the LBM industry, Cheryl Dangel Cullen is a writer based in Chicago.