In a housing market that continues to wallow in the doldrums, some LBM dealers have found that add-ons like hardscaping materials–pavers, retaining wall systems, and natural stone–can bring in customers and dollars.

ROCK SOLID: Trends in outdoor living and landscaping find some LBMs adding hardscaping materials to their offerings, bolstering their bottom lines. Customer demand is driving some dealers to expand their product lines, and the continuing strength of the outdoor living trend is fanning dealers' and customers' interest in these products.

Homeowners will add whole great rooms–spaces incorporating living, dining, and cooking areas–in 2008, according to a survey of American Society of Landscape Architect members. If that prediction bears out, it translates into greater sales of patio pavers and stone.

Ideal Concrete Block Co. vice president Joe Burgoyne has a vested interest in the hardscape market. The family-owned company in Westford, Mass., has supplied concrete block and building materials to customers since 1923. In 1974, Burgoyne's father began selling an interlocking concrete paver under license from a German company, convinced that this was the next generation of paving materials. He was right; in the 1980s, Ideal Concrete transitioned from concrete block and building materials to hardscaping.

Over the past 30 years, Burgoyne has found more interest from lumberyards that want to add hardscaping products to their lineups. "When we started selling landscape products to the lumberyards in 1975, they thought they should sell only lumber," says Burgoyne. "Little did they realize that we all had the same customers walking in the door."

Family-owned Broadmoor Landscape Supply, just south of San Francisco, was an early adopter. In 1990, as home centers moved into his area, sucking up his customers and eating into his profits, owner Ted Schlosser steered Broadmoor into hardscaping. Broadmoor still sells construction materials such as brick and concrete block, but landscaping products constitute 60% of its offerings. That part of the business grew about 5 percentage points in 2007, and Schlosser foresees continuing growth in the category, which for Broadmoor includes natural stone, pavers, retaining wall systems, fencing, and decking.

Schlosser is always on the lookout for new products to add to his line. He attends regional garden shows and surfs the Web, trolling for new materials to entice his customers. Sometimes he learns of a product just "talking to a guy who knows a guy who knows a guy."

Schlosser buys bulk material regionally, but some of his natural stone and gravels come from Mexico and China. Popular with his customers is a pale aqua-green pebble that he buys from Indonesia for $1,000 a ton.

Schlosser says that the freight on many landscaping materials can be higher than the cost of the materials themselves, but he doesn't see that as a deterrent as long as he can recoup the cost in the price point and make a profit.

For LBM dealers interested in offering hardscaping materials, there's wisdom in other dealers' experience with these products. For instance, block and stone take up a lot of space, and it was the lack of that resource that led Dixieline ProBuild in San Diego to get out of the hardscaping market two years ago.

"To be frank, there's not a lot of margin in the product, and when space is at a premium, it's going to be lumber all the time," says Steve Cogdill, Dixieline's brick, block, concrete, and decorative stone buyer. "Some of the lumberyards, which have more space and cater more to the consumer than we do, probably do very well."

Dealers familiar with hardscaping materials say they are easy to handle. "It's a palletized product most of the time, and similar equipment is used to deliver the goods," says Ken Guisinger, general manager of Canby Builders Supply in Canby, Ore.

Schlosser notes you don't need to baby stone and block. "Landscape material can sit outside for a year, impervious to the weather," he says.

Moreover, hardscaping is a product people want. "Ten, 15 years ago, we were educating the public about retaining walls; they didn't know anything about it. And when we told them the price, they ran like their hair was on fire," says Todd Fassnacht, general manager of the Henry Bierce Co., a masonry supply house in Tallmadge, Ohio. "Now people come in and say, 'Where are the retaining wall blocks, do you have the ones that do this or that, and what colors do you have?' " he says. Price is no longer a flash point, either, Fassnacht notes.

In East Hampstead, N.H., East Coast Lumber & Building Supply's general manager Thomas Hampton found hardscaping to be a profitable add-on–at least until other companies, like Landscapers Depot ("It's just huge in our area") started targeting those commodities. "Our core market is lumber, but we add to it things that sell," he says. "When someone else moves into it, we drop it."

While heavy competition in the landscaping segment caused East Coast to retrench in that market, Hampton says: "This is definitely a viable product line for LBM dealers to get into. Block is a great add-on, but you have to have people who understand it and can talk to the contractors knowledgeably."

Hampton notes that the product is inexpensive, "and you can make a decent margin in it. It's a simple product to deliver; you pick up four pallets, and you're done," he says. "Lumber is a lot harder to load. But now everybody in the world is jumping into this, and the market has changed a lot."

Guisinger of Canby Builders Supply has found hardscaping to be profitable to his business. "We have stayed with our line and have added to it as the demand has grown," he says. Recently, he added Western Interlock to his block lineup, which offers many different colors and finishes of block for paths, patios, and walls. Block and pavers account for about 2% of Canby's products, and Guisinger is projecting a 20% increase in the hardscaping lines for 2008.

Dave Slifer found that in his small but affluent market, it was easier to find new product than new customers. Hardscaping is a good fit for both Wehrungs Lumber & Home Center in Ottsville, Pa., and its customers, says Slifer, who is vice president. It entered the hardscaping market about eight years ago (the company sells E.P. Henry products), and Slifer found the more he offered his customers, the more they wanted.

"Folks are using their backyards as vacation spots," says Slifer, who's been talking to E.P. Henry about doing prepackaged fire pits. "It's no longer a little 8x10 patio. It's a quarter-acre patio."

–Kate Tyndall specializes in garden and lifestyle reporting. She lives in Washington.