With surprising regularity, ProSales gets letters congratulating us for writing about some small dealer instead of–in the opinion of these letter-writers–lavishing all our attention on big LBM operations. These letters vex me because I want to think ProSales strives to cover dealers of all sizes. I have made it a point during my travels to call on smaller dealers at least as often as I do on members of the ProSales 100. And for every ProSales 100 member that we've written about since January 2006, this magazine has cited three pro dealers from the lower ranks.
Still, even we feel that's not enough, and this month's cover story represents one part of our effort to cover the entire spectrum of dealers. "Less Is More" (page 57) gives lessons from four lumberyards that are holding their own against big boxes and LBM giants. Some of their success comes from old-fashioned hustle. As Allen & Allen's CEO, Buzz Miller, puts it: "If you find good people and bust your ass and take care of the customer, there is always a place for the independent."
That's good advice, but I believe there is another key to the independent LBM dealer's future success: getting connected.
For far too long, it seems, lots of small pro dealers have thought of themselves as Marlboro Men–self-reliant, manfully stoic, often reclusive, and tending to look within the yard for solutions whenever a problem arises. Occasionally that can lead to innovations, such as the trim holder invented by a worker at Professional Builders Supply, but too frequently it results instead in mediocre solutions and stale ideas. I wonder, for instance, how much money dealer CEOs save by buying their own lumber rather than by relying on a buying co-op. Is that really the best way to use your time? How often do you really beat the people who spend 100% of their time on this job?
Marlboro Men also tend to believe that hard work can overcome just about any problem. That's an admirable outlook, but it's a dangerous notion as well, for in today's world of round-the-clock service and just-in-time delivery, it's impossible for any one person to heave and hustle enough to meet demand.
Instead, I believe many independent dealers need to re-examine the parts that collectively make up their operations and decide which are vital and which can be outsourced. You don't need to go as far as the business consultant who once told me his idea of a perfect company was "One employee and a brand"–with virtually everything being outsourced. Still, do you really need to have a payroll person on your staff? And how about handing off debt-collecting duties to an agency? Conversely, have you avoided upgrading the yard's computer system because computers are a mystery to you?
Second, small dealers need to work on ways to share their data with partners. Letting others know electronically about the orders you've received not only speeds up service but also helps reduce errors, quells uncertainties, smoothes out production cycles, and strengthens bonds between manufacturers, dealer/distributors, and builders. The big dealers already are investing in data systems that will make such cooperation possible. Smaller dealers usually don't cater to that production builder crowd, but they deal with many of the same manufacturers as the ProSales 100 members do, so opportunities from that end likely will be the same. And on the other end of the chain, the rise in special orders that many small dealers handle also will put a premium on a dealer having good Internet connections at the very least.
There's a human element to getting connected, too. As the cover article makes clear, dealers stand to gain immeasurably by talking with their peers at association meetings, roundtables, and distributor shows. And of course, by reading ProSales you're learning about some of the smartest, most innovative folks in the business.
"If I have seen further," Sir Isaac Newton once wrote, "it is by standing on the shoulders of giants." Get some help up and see how your perspective changes.
