February, 2007

Fresh Opportunities

By Rick Schumacher

During the booming housing market, many building material suppliers viewed remodelers as more trouble than they were worth. After all, in the midst of a booming housing market, why would any LBM dealer divert resources from flatbed-sized orders to pickup-sized orders?

Now fast-forward to 2007. New housing starts are down in most areas, with many builders sitting on unsold inventory. For dealers focused exclusively on new residential construction, this isn’t good news. Meanwhile, residential remodeling continues to chug along—and the dealers who serve remodelers are moving inventory.

While individual remodeling jobs may be small, the overall opportunity is enormous.

According to the latest data from the Harvard Joint Center and the Department of Commerce, the remodeling market has nearly doubled in size in the past decade—from $149 billion in 1995 to $280 billion in 2005. With an overall market that big, remodelers clearly represent a fresh opportunity for LBM dealers who put forth the effort that remodelers require.

To help you get your share of this large and growing market, we turned to Qualified Remodeler magazine and its editor-in-chief, Patrick O’Toole. With QR’s status as a preferred publication of both the National Association of the Remodeling Industry (NARI) and the NAHB’s Remodelor’s Council, QR is clearly in tune with remodelers. And with more than a decade of experience working with builders and remodelers, Patrick has the experience to help you understand this booming portion of the marketplace.

While I’m on the topic of fast-growing categories and specific customer needs, I’m pleased to introduce a new columnist this month, Bob Heidenreich.

With deck season just around the corner, what better time to introduce a monthly article devoted to selling the deck project? Bob is the owner of The Deck & Door Store in Apple Valley, Minn. As a deck builder who was unsatisfied with the service and product selection he found at existing yards, Bob decided to create his own bona fide lumberyard.

With his unique insights into the specific needs of deck builders, Bob plans to share strategies and tactics to help you better serve your deck builder customers. Even if you don’t sell decks to homeowners on an installed basis (the focus of this month’s column), you’ll find insights that will transfer to many sales situations. We were impressed enough by his innovative ideas to name Bob an Entrepreneur of the Year and to put him on the cover of our January 2007 issue. You can read more about his fascinating journey there.

So as we roll into 2007, where does the current uncertainty in the housing market leave you?

Yes, the new construction market is down and business-as-usual is undergoing significant change. But remember that demand from remodelers and deck builders is alive, well, and even growing.

If you’re not already paying attention to—and devoting resources toward—serving these markets, it may be time to tap into some fresh opportunities.