Over the past two years, Kent, Ohio-based Carter Lumber's installation services business has more than doubled, says that pro dealer's installed sales manager, Erick Carter. He credits some of the gains to wood-framed hotels and other commercial projects, which now account for 40% to 50% of Carter's total installed sales income. The lion's share of the rest comes from new residential construction, in which Carter Lumber serves as a de facto subcontractor, doing projects such as installing all of the windows for a subdivision.
But the generally weak new-construction market also has led Carter Lumber to do something else: Accept more remodeling installations for categories like roofing, siding, windows, doors, and some painting. The dealer avoids giving the impression it's competing for those jobs with its contractor customers, says Carter, by hiring them to do the work.
With homebuilding still on the ropes, most pro dealers have sought new avenues for their installation services. Many dealers are less averse than they once might have been to installing products for homeowners, even if by doing so they brush up against The Home Depot and Lowe's, whose installation programs target remodeling and repair jobs. But, as with Carter Lumber, they're struggling with whether to participate in remodeling projects as installers and risk alienating remodeling contractors who shop their yards.
It appears that few dealers want to walk that tightrope, regardless of how soft the new-home construction market is now. Builders FirstSource, whose lumberyards in nine Southeastern states generate about 20% of their revenue from installed sales, continues to focus almost exclusively on installing for multifamily and large production builders, says Morris Tolly, the Dallas-based dealer's senior vice president of operations.
Other dealers are choosing to mothball their installation programs rather than create conflicts with pro customers by bidding on remodeling jobs. "We've taken the position that we don't want to take business from our customers," says Rod Wiles, marketing director for Hammond Lumber, with nine locations throughout Maine. The nine-yard Kuiken Brothers, based in Fair Lawn, N.J., has "almost phased out of" installation, says millwork manager Dan Hughes. "Homeowners are squeezing contractors for prices we couldn't touch with our own crews," he says. Homebuilders "are doing most of the work themselves right now."
Bellevue Builders Supply in Schenectady, N.Y., installs framing, roofing, siding, interior doors and trim, insulation, kitchens, and drywall, all for new construction. It has found more work lately from multifamily projects of anywhere from eight to 200 units, says Bellevue's president, Greg Gaskell. "The [new construction] market is certainly down, but there are opportunities out there," he says. And when it comes to windows, Bellevue will only install them as part of a new house's framing package, and it stays away from single-window installs because, says Gaskell, that's mostly a remodeling project.
