It started with the catalogs. Associated Building Supply (ABS) had stacks of them in its stores, describing a slew of windows, doors, hardwood flooring, and even lavatory fixtures. It was too much to absorb and, owner Chris Cole believed, too complicated to sell.
So Cole took action. But he didn't do what many folks would have done–focus on the big-selling items while not letting go of the rest of the stock. Rather, starting a few years ago, he began tossing out just about every product except Jeld-Wen windows. At the same time, he restricted who he sold to and how he operated.
In theory, having fewer options leads to fewer sales. In fact, Associated Building Supply posted a 46% increase in sales in 2008, to just over $7 million. And in the first half of this year, over a period in which single-family housing starts dropped 40% from the first six months of 2008, Cole says ABS' sales have held steady.
"I truly believe in being expert in your product, and multiple lines create multiple confusion among your sales reps," Cole says. "We get a lot of feedback from our customer base that says 'You guys know what you're talking about.' In this line, we're the go-to people.
"The other big advantage I've found is that when you have 35 different manufacturers, the customer thinks it's the spiff of the day that you're going to push," Cole adds. "With us, we're going to dance with the one that brought us. People think, 'You're growing and doing well, so that must be the right product for me.'"
We Do Sales. Today, the only windows you'll find in ABS' five showrooms across California are from Jeld-Wen. It doesn't carry any inventory, as all its sales are custom orders. And 11 of ABS' 15 employees are salesmen. It's been thinking of hiring more.
"A lot of my model is based on asking 'What can people do better than me?'" Cole says. "If they can do it, I don't."
Cole also believes that by focusing almost exclusively on just one product–windows–and just one brand–Jeld-Wen–he can build the kind of sales clout that gets him top-level service from the manufacturer despite being a relative piker in the LBM dealer world. "When you're not carrying 25 different brands, you tend to get their ear," Cole says of Jeld-Wen. "They really listen when we have a problem."
"We've been training our people for years to look past the low-hanging fruit, look high up in the tree," Cole adds. "Those conditions prepared them to be hunters and not gatherers. The starts are down, but the starts are still there, especially in the higher end of the marketplace. In a sense, with a $20 million home you can build in more [high-quality products] these days because the materials are cheaper."
Wood windows provide up to four-fifths of ABS' revenue, and 95% of those wood window sales are Jeld-Wen products. ABS also shops Jeld-Wen's aluminum and vinyl brands, aluminum windows by another manufacturer, and a sprinkling of products from Marvin and others, particularly for sliding and other specialty doors.
Born "pretty much" in the basement of Cole's home in 1993, ABS has grown into a set of showrooms that serve both Southern and Northern California: Anaheim, Calabasas, Burlingame, Los Gatos, and the headquarters in Oxnard. He's hunting space now for another spot in northern California.
But while Cole is proud of how those showrooms look–he particularly likes the newest one, in Los Gatos, southwest of San Jose–he also dismisses them as "closing facilities."
"Our sales reps are pressed to stay out in the field," he says. "If we can identify an opportunity, we go after it. ...We pay [reps] extremely well for the industry–treat them more like partners. They probably get more dollars of net profit than I do. It's performance based, but very lucrative."
Clean and Painless. Cole pushes his sales reps to be able to assess the customer's needs and determine the right mix of products–ABS products, of course–for the task. "The consumer has an almost insurmountable task if they walk in and try to figure out what they want," he says. "It's a case of champagne taste and beer budget. We try to make this as clean and painless as possible. We like to go out, meet the people, understand who they are and what they want to accomplish, and do a proposal."
Cole then keeps track of the reps' performance with a system that compiles sales entries as they occur statewide. "In real time I can see our P/L and balance sheet, what's our bid log, what's coming off the back side," he says. "I look at it on a daily basis, and the sales reps do the same. ... As long as the numbers are there to support the growth and the sales reps feel safe, that's how I know we're successful."
He believes he has increased his odds for success by avoiding installed sales ("Our business is 90% pro, and we don't want to interfere with the bread and butter") or keeping inventory. ABS has neither trucks nor forklifts. Rather, it insists its vendors be able, on their own or through a distributor, to deliver their products directly to the job site.
"This business isn't about being general practitioners; you're talking here about being neurosurgeons," he says. "We're not going to morph into an operations company. I'm sales focused."
What's to come? More growth, Cole says. "Sales are definitely tracking where they need to be," he says. "Our ongoing efforts now are recruiting the brightest and the best. Bloodletting creates opportunity for skilled people. We don't have yards; we have intellectual property."