While the percentage of the PROSALES 100 offering contractor services, installation programs, and manufactured product lines has remained fairly constant over the past few years, in the future these dealers anticipate that value-added offerings will grow at a healthy clip. Of the 70 percent of companies that now offer installed sales, for example, 25 percent envision that part of their business growing at a rapid pace in the next five years, while another 51 percent believe it will grow gradually during that period.
The response was similar for component manufacturing. Over the next five years, 23 percent of the PROSALES 100 anticipate these services growing at a rapid pace, while 50 percent see them gradually expanding as they look to open new facilities to capitalize on the growing builder demand for more bundled services. Dealers active in this area include Lezzer Lumber Co. (No. 77), based in Curwensville, Pa., which reported great success in converting builders to wall panels in 2003 and is planning to open a second truss and wall panel plant in another market this year. Additionally, Salt Lake City–based Burton Lumber & Hardware Co. (No. 45) expanded its component capacity by building a "mega facility" that combines truss, wall panel, and door manufacturing, along with a corporate headquarters, sales operation, lumberyard, and commodity reload, according to Steve Hawkes, vice president of operations.
The buzz this year definitely is centered on service with companies such as San Francisco–based BMHC (No.6) and Seigle's Home & Building Center in Elgin, Ill. (No. 27), helping to set new benchmarks by rolling out enhanced dealer-based construction services to builders. In 2003, BMHC expanded its construction services offerings with joint ventures in Florida and the Mid-Atlantic region, while Seigle's purchased one of its largest customers to expand within the Chicago market.
These examples are just the tip of the iceberg in a sea of value-added opportunities for PROSALES 100 dealers, but it's clear that the nation's largest construction suppliers are not charting new courses without concern for overall profitability. In this regard, expense reduction was noted as a top priority for the PROSALES 100, with 65 percent saying that it will become more important over the next five years. This joint focus on improving the bottom line while diversifying core competencies may be the winning combination that keeps the pro dealer market rolling full steam ahead in 2004.