Franklin Building Supply in Idaho once was like many pro dealers when it came to purchasing merchandise.
“It was pretty much every yard for itself,” says Franklin CEO Rick Lierz, meaning that each of its 12 locations had its own team of buyers.
What changed over the past year was the promotion of longtime yard manager James Dowen to the new position of vice president of purchasing and vendor relations. The stores retained their buying teams, but Lierz says the group has come together to buy from fewer vendors. “We’re focusing on leveraging our buying power and getting everyone on the same page,” he says.
Dowen is also charged with making sure the yards are buying framing materials—Franklin’s single biggest inventory need—using its pricing and demand projection system properly. Franklin is hardly alone among pro dealers that have rethought how they buy products.
Most dealers now lean toward centralized purchasing, partly to control cost. However, in the wake of a recessionary winter that froze supply-chain relationships, dealers are also rediscovering the importance of distributors and buying groups in bolstering their inventory control and margins.
84 Lumber’s purchasing has been centralized for decades. The 30 to 35 buyers at its Eighty Four, Pa., headquarters set programs and negotiate vendor contracts on behalf of the dealer’s more than 250 locations nationwide. Half of those yards have access to rail sidings, so 84 can make big purchases from mills at favorable prices and redistribute wood products efficiently without using reloads.
“Size matters in lumber, and that’s our sweet spot,” says Mitch Wagner, 84’s purchasing director.
Even a decentralized operation, such as Guy C. Lee Building Materials, whose eight North Carolina yards buy and rebuy independently, occasionally does group purchases of commodities. “I’d like to see us do more of that,” says Brian Strickland, general manager of the dealer’s Shallotte, N.C., location.
Strickland took over that yard’s buying responsibilities when his purchasing manager was out temporarily due to illness. Even after the manager returned, Strickland kept his hand in the buying process. “I’m enjoying it and having fun,” he says.
A dealer’s buying hierarchy can vary markedly from company to company. R.P. Lumber’s president and owner, Robert Plummer, still purchases commodities for the company’s 51 yards in Illinois and Missouri with assistance from director of purchasing Dave Matthews, who buys ceilings and skylights.
R.P. has four buyers at its Edwardsville, Ill., headquarters, and its stores can rebuy and make special orders “but need to communicate with the home office,” says Plummer, so deliveries can be coordinated.
In Casco, Maine, Hancock Lumber’s inventory and operations manager, Dave Chapais, negotiates lumber and building material programs and visits each of Hancock’s seven full-service yards at least every two weeks to make sure their general managers are getting what they need. Four purchasing managers support Chapais, as do two millwork specialists who also buy for Hancock’s window and door showroom.