Posting gains: in the quest for business growth, the ProSales 100 are busy scrutinizing market opportunities and focusing on sales efficiencies as the companies close on their heels continue to match their pace – The ProSales 100
Chris Wood
NAHB is forecasting 1.31 million single-family home starts in 2003–which is 48,000 units shy of the stellar peak reached in 2002, a year that went down on the books as the strongest since 1978. However, the projected dip has not quelled the analysts’ optimism about the overall strength of the housing market, and following this lead pro dealers large and small remain on the hunt for new customers and market opportunities far and wide. The race is now on to outmaneuver the competition, grab more lucrative builder accounts, and get substantial footing in the nation’s hottest market segments.
Once again topping the PROSALES 100 annual ranking of the nation’s leading construction suppliers, Raleigh, N.C.-based Stock Building Supply enjoyed modest growth in 2002 at 5.7 percent–and in the process managed to chum out nearly $2.6 billion in pro sales. Looking out toward the end of 2003 and beyond, Stock is preparing for more business expansion with the aim of remaining the nation’s front-runner. “Our goal over time is to achieve double-digit growth year after year, split evenly between acquisitive growth and organic growth,” says Stock CEO Fenton Hord, who feels that the market opportunities for pro dealers are impressive. “We see our overall [national] market share as about 2 to 3 percent,” says Hord. “In the markets we are in, we have approximately 8 percent of the total market, so there are significant opportunities for growth.”
When it comes to eyes on the upward growth curve, Stock isn’t alone. With gross sales increases topping 30 percent, Somerville, Mass.-based Beacon Roofing Supply (No. 9) and Avon, Minn.-based Lumber One (No. 94) had fast-paced years that led the pack (see Figure 4). While Beacon found success in specialty roofing distribution, two-unit Lumber One is more representative of the general LBM supply channel. Overall, 12 of the 20 highest growth companies on the PROSALES 100 operate 10 traits or less, and only five (including Beacon) have 25 units or more.
Lumber One controller Marty Laumeyer says his company’s successful strategy was to diversify the business and provide outstanding service to each market sector. “From retail sales, to contractor sales, land development, single-family, and multifamily construction, we try to fill niches that other suppliers are not interested in and then service them like crazy,” he says. Despite customer diversification, Lumber One also is quick to play the efficiencies card. With only 56 employees, the dealer squeezed $43.2 million in 2002 pro sales from its market. That’s an astounding $771,429 per employee, pushing the dealer to third when it comes to PROSALES 100 employee productivity (see Figure 5). Along with fellow newcomer to the rankings Shelter Products (No. 51), which cranked out $1.16 million per employee, Lumber One joins productivity mainstays like Woodinville, Wash.-based Matheus Lumber (No. 86), with $1.22 million per employee, and Petaluma, Ca.-based Golden State Lumber (No. 17), with $645,714 per employee, in raising the bar when it comes to revenue generation from the rank and file.
Making the Sales
For pro dealers looking to make similar revenue gains, the biggest opportunities may be found in the residential remodeling market, which is moving Mil-steam ahead. Total U.S. remodeling expenditures in 2001 hit $214 billion, up from $180 billion in 1999, according to Harvard Joint Center for Housing Studies’ re-tabulations of data from the U.S. Census Bureau’s American Housing Survey. And when future forecasts are released this month, many dealers serving the market are anticipating another strong showing for the sector.
“We think the remodeling market is critical,” says Ed Quinn, president of Gaithersburg, Md.-based TW Perry (No. 56), which ranked third in overall growth at 28.5 percent. From truck fleets to the makeup of TW Perry’s sales staff, all aspects of the company are influenced in some way by the remodeling sector, which constitutes approximately 55 percent of its total business. “You have to go with the service model,” advises Quinn, “and there are a lot of special orders, but the margins are great.”
Despite the remodeling and replacement/renovation boom, however, dealers on the PROSALES 100 still are getting the majority share of revenue from new construction (see Figure 6). When asked to break down market focus by percentage, as a group, the majority of their sales currently are to single-family custom builders (34 percent) and single-family production builders (22 percent). However, when looking at the PROSALES 100 on a company-by-company basis, each individual dealer on the PROSALES 100 tended to opt for a heavier concentration on either the custom markets or production builders, rather than splitting their business in more even percentages between these groups.
While residential remodeling claims an average market share of only 6 percent, a comparison of the billions in available spending versus the lack of pro dealer attention has many in the industry rushing to grab remodeling revenue, including Stock Building Supply. “The repair/remodel sector is only about 10 percent of our sales, with the other 90 percent coming from single-family and multifamily new construction,” says Hord. “It’s a growth area we plan to focus on in the coming year or two.”
On the Heels
If this year’s survey results are any indicator, the PROSALES 100’s growth plans will be challenged hard by the next 25 suppliers ranked by pro sales, which are keeping the competitive pressure on the leaders (see Figure 7). Smaller revenue independents like Homestead, Fla.-based K & A Lumber, Medford, NJ.-based DuBell Lumber, and Grimes, Iowa-based Beisser Lumber are leveraging single-digit unit efficiencies with yard-level technologies and services to unleash a greater sales presence in their market. For example, with a 31 percent growth rate, Beisser Lumber would have tied Beacon Roofing Supply for the top spot on the growth leaders chart if Beisser had made the top 100 rankings list.
A three-unit dealer, Beisser recently computerized its in-house design and estimating departments to remove administrative burden from its sales reps. “It takes a capital investment, but it allows our salesmen to be out on the street selling,” says president Kim Beisser, who adds that the company has had good opportunities to add to its ranks of qualified and experienced employees over the past several years. “I can’t tout my people enough. That’s where the key is,” Beisser says. “Building on that base of experienced talent is one thing that we are always focusing on.”
To do that, Beisser rubs shoulders with the rest of the industry to offer a competitive compensation and benefits package to employees. When it comes to paying sales reps, Beisser joins the 22 percent of the PROSALES 100 that offer a straight salary to its sales team. The dealer also backs it with a performance-based pay scheme, which also is used by 18 percent of the PROSALES 100 (see Figure 8). Far more common, however, is a percentage commission on gross margin for reps, implemented by 47 percent of the group. In some cases dealers are more apt to wait for the money–21 percent use a percentage commission on collected revenue and gross margin, outpacing those dealers who pay commissions on billed revenue and gross margin (15 percent).
Indeed, waiting for the money seems to be modus operandi for 2003 and beyond. With political uncertainties joining an already sluggish economy, the market leaders interviewed herein are upbeat but also conservative. Moreover, according to revised NAHB estimates, single-family starts for 2004 might slip further to 1.28 million; however, many pros expect the market to remain solid into the foreseeable future. “Everything we have heard from a collection of trusted sources like the Harvard Joint Center for Housing indicates that the opportunity for starts to hold up is there,” Hord says, “and we’re hoping for another couple hundred million [dollars in sales growth].”
Figure 4
Chart Toppers
The 20 fastest-growing companies in the PROSALES 100.
Primary
business
Rank Company, location emphasis *
9 Beacon Roofing Supply, Somerville, MA S
94 Lumber One, Avon, MN L
56 TW Perry, Gaithersburg, MD M
18 Williams Bros. Lumber Co., Duluth, GA M
41 McCray Lumber Co., Overland Park, KS L
15 Lyman Lumber Co., Excelsior, MN M
35 National Lumber Co., Mansfield, MA L
86 Matheus Lumber Co., Woodinville, WA W
54 Honsador Lumber Corp., Kapolei, HI M
70 Home Lumber Co., San Bernardino, CA L
69 Spahn & Rose Lumber Co., Dubuque, IA M
55 Shelly Enterprises, Perkasie, PA M
11 Hope Lumber & Supply Co., Broken Arrow, OK M
52 Manning Building Supplies, Jacksonville, FL M
21 Bison Building Materials, Houston, TX M
79 Adams Building Materials, Winter Haven, FL M
40 Mill Creek Lumber & Supply Co., Tulsa, OK M
45 E.C. Barton & Co., Jonesboro, AR L
93 Barr Lumber Co., San Bernardino, CA L
26 Scherer Bros. Lumber Co., Brooklyn Park, MN M
2002 As percent 2002 2001
pro sales of total total sales total sales
Rank (millions) 2002 sales (millions) (millions)
9 $539.0 98% $550.0 $420.0
94 43.2 92 47.0 36.0
56 75.6 98 77.1 60.0
18 219.8 99 222.0 178.0
41 97.0 100 97.0 78.0
15 238.1 76 313.3 252.0
35 115.0 95 121.0 100.0
86 47.5 95 50.0 41.6
54 76.8 90 85.3 71.6
70 62.0 100 62.0 52.0
69 62.9 75 83.9 71.2
55 76.1 94 81.0 69.0
11 425.3 98 434.0 371.0
52 80.5 99 81.3 70.3
21 187.0 100 187.0 162.0
79 51.0 100 51.0 44.4
40 97.5 75 130.0 113.0
45 90.2 75 120.3 105.0
93 44.0 80 55.0 48.0
26 172.9 91 190.0 166.0
Percent Total number
change of locations
(2002 vs.
Rank 2001) 2002 2001
9 31.0% 65 60
94 30.6 1 1
56 28.5 3 3
18 24.7 15 15
41 24.4 8 8
15 24.3 13 13
35 21.0 3 3
86 20.2 2 2
54 19.1 6 6
70 19.2 3 3
69 17.8 26 26
55 17.4 10 10
11 17.0 31 27
52 15.6 13 13
21 15.4 7 7
79 14.9 5 5
40 15.0 26 19
45 14.6 55 53
93 14.6 6 6
26 14.5 10 10
SURVEY BASE: PROSALES 100 * L=Professional dealer/lumberyard without
manufacturing; M=Professional dealer/lumberyard with manufacturing;
S=Specialty distributor; W=Wholesale distributor
Figure 5 Raking in Sales
The top 20 PROSALES 100 companies ranked by
sales per employee.
Primary 2002
business pro sales
Rank Company, location emphasis * (millions)
86 Matheus Lumber Co., Woodinville, WA W $47.5
51 Shelter Products, Portland, OR W 81.2
94 Lumber One, Avon, MN L 43.2
70 Home Lumber Co., San Bernardino, CA L 62.0
17 Golden State Lumber, Petaluma, CA M 226.0
89 Arlington Coal & Lumber Co., Arlington,
MA L 46.2
87 Uresco Construction Materials, Kent, WA L 47.0
36 National Lumber, Warren, MI M 110.0
11 Hope Lumber & Supply Co., Broken Arrow,
OK M 425.3
7 Bradco Supply, Avenel, NJ W 824.5
9 Beacon Roofing Supply, Somerville, MA S 539.0
54 Honsador Lumber Corp., Kapolei, HI M 76.8
53 Universal Supply Co., Hammonton, NJ S 79.7
84 William M. Young Co., Wilmington, DE M 47.7
4 ABC Supply Co., Beloit, WI W 1,410.8
57 F.E. Wheaton & Co., Yorkville, IL M 75.5
47 Livonia Building Materials Co., Livonia,
MI S 88.2
83 Jaegen Lumber & Supply Co., Union, NJ L 47.8
19 Parr Lumber Co., Hillsboro, OR L 205.2
28 Moore’s Lumber & Building Supplies,
Roanoke, VA L 159.5
2002 total 2002 pro
number of sales per
Rank Company, location employees employee
86 Matheus Lumber Co., Woodinville, WA 39 $1,217,949
51 Shelter Products, Portland, OR 70 1,160,000
94 Lumber One, Avon, MN 56 771,429
70 Home Lumber Co., San Bernardino, CA 90 688,889
17 Golden State Lumber, Petaluma, CA 350 645,714
89 Arlington Coal & Lumber Co., Arlington,
MA 75 616,000
87 Uresco Construction Materials, Kent, WA 85 552,941
36 National Lumber, Warren, MI 225 488,889
11 Hope Lumber & Supply Co., Broken Arrow,
OK 933 455,841
7 Bradco Supply, Avenel, NJ 1,825 451,781
9 Beacon Roofing Supply, Somerville, MA 1,200 449,167
54 Honsador Lumber Corp., Kapolei, HI 185 415,135
53 Universal Supply Co., Hammonton, NJ 195 408,718
84 William M. Young Co., Wilmington, DE 120 397,500
4 ABC Supply Co., Beloit, WI 3,600 391,889
57 F.E. Wheaton & Co., Yorkville, IL 195 387,179
47 Livonia Building Materials Co., Livonia,
MI 235 375,319
83 Jaegen Lumber & Supply Co., Union, NJ 130 367,692
19 Parr Lumber Co., Hillsboro, OR 560 366,429
28 Moore’s Lumber & Building Supplies,
Roanoke, VA 436 365,826
* L=Professional dealer/lumberyard without manufacturing; M=
Professional dealer/lumberyard with manufacturing; S=Specialty
distributor; W=Wholesale distributor
SURVEY BASE: PROSALES 100
Figure 6
Counting Customers
Average customer base of the
PROSALES 100 by market segment.
Single-family custom builders 34%
Single-family production builders 22%
Other 14%
Multifamily builders 8%
Consumers 7%
Commercial builders 7%
Residential remodelers 6%
Commercial remodelers 1%
Building materials dealers 1%
Note: Table made from pie chart.
SURVEY BASE: PROSALES 100
Figure 7 The Next 25
Primary 2002 As percent
business pro sales of total
emphasis * (millions) 2002 sales
101 K & A Lumber, Homestead, FL M $40.3 96%
102 Beisser Lumber, Grimes, IA L 39.8 98
103 Century Everglades Lumber,
Miami, FL M 38.4 80
104 DuBell Lumber, Medford, NJ M 38.2 85
105 Standale Lumber & Supply
Co. Inc., Grand Rapids,
MI M 38.1 95
106 Carter-Lee Lumber Co.,
Indianapolis, IN M 37.8 80
106 Simonson Lumber Co., St.
Cloud, MN L 37.8 90
106 JT’s Lumber, Middletown, RI L 37.8 90
109 Louis J. Grasmick Lumber
Co., Baltimore, MD M 37.5 80
110 Hammond Lumber Co.,
Belgrade, ME M 37.4 68
111 Sterling Lumber and
Investment, Westminster,
CO M 35.7 85
112 Douglas Lumber, Kitchens &
Home Centers, Smithfield,
RI L 35.6 90
113 Associated Truss & Lumber
Co., Sunnyvale, TX M 35.1 90
114 Dunn Corp., Daytona Beach,
FL M 34.3 97
115 Tri-County Building Supply,
Pleasantville, NJ L 34.2 95
116 Fagen’s Building Centers,
Wexford, PA M 32.4 99
117 Dartmouth Building Supply,
Dartmouth, MA M 32.1 95
118 Crosslin Supply Co.,
Smyrna, TN L 31.5 85
119 Crenshaw Lumber Co.,
Gardena, CA M 31.0 100
120 J.C. Snavely & Sons,
Landisville, PA M 30.6 90
121 John’s Lumber Co., Mt.
Clemens, MI L 29.7 90
122 Mead Lumber Co., Columbus,
NE M 27.6 60
123 Lee Lumber & Building
Materials, Chicago, IL M 27.4 80
124 Fullerton Lumber Co.,
Minneapolis, MN L 27.2 80
125 Clay Ingels Co., Lexington,
KY W 26.2 57
Percent
2002 2001 change
total sales total sales (2002 vs.
(millions) (millions) 2001)
101 K & A Lumber, Homestead, FL $42.0 $39.0 7.7%
102 Beisser Lumber, Grimes, IA 40.6 31.0 31.0
103 Century Everglades Lumber,
Miami, FL 48.0 54.0 -11.1
104 DuBell Lumber, Medford, NJ 44.9 40.1 12.0
105 Standale Lumber & Supply
Co. Inc., Grand Rapids,
MI 40.1 36.0 11.4
106 Carter-Lee Lumber Co.,
Indianapolis, IN 47.3 44.1 7.3
106 Simonson Lumber Co., St.
Cloud, MN 42.0 37.8 11.1
106 JT’S Lumber, Middletown, RI 42.0 44.0 -4.5
109 Louis J. Grasmick Lumber
Co., Baltimore, MD 46.9 44.5 5.4
110 Hammond Lumber Co.,
Belgrade, ME 55.0 53.0 3.8
111 Sterling Lumber and
Investment, Westminster,
CO 42.0 42.0 0.0
112 Douglas Lumber, Kitchens &
Home Centers, Smithfield,
RI 39.6 38.6 2.6
113 Associated Truss & Lumber
Co., Sunnyvale, TX 39.0 39.0 0.0
114 Dunn Corp., Daytona Beach,
FL 35.4 35.3 0.3
115 Tri-County Building Supply,
Pleasantville, NJ 36.0 34.0 5.9
116 Fagen’s Building Centers,
Wexford, PA 32.7 55.3 -40.9
117 Dartmouth Building Supply,
Dartmouth, MA 33.8 32.5 4.0
118 Crosslin Supply Co.,
Smyrna, TN 37.0 37.0 0.0
119 Crenshaw Lumber Co.,
Gardena, CA 31.0 32.0 -3.1
120 J.C. Snavely & Sons,
Landisville, PA 34.0 34.0 0.0
121 John’s Lumber Co., Mt.
Clemens, MI 33.0 34.0 -2.9
122 Mead Lumber Co., Columbus,
NE 46.0 44.0 4.5
123 Lee Lumber & Building
Materials, Chicago, IL 34.2 33.6 1.8
124 Fullerton Lumber Co.,
Minneapolis, MN 34.0 32.0 6.3
125 Clay Ingels Co., Lexington,
KY 46.0 44.0 4.5
Total number
of locations Total
number of
2002 2001 employees
101 K & A Lumber, Homestead, FL 1 1 150
102 Beisser Lumber, Grimes, IA 3 3 80
103 Century Everglades Lumber,
Miami, FL 3 3 225
104 DuBell Lumber, Medford, NJ 5 5 140
105 Standale Lumber & Supply
Co. Inc., Grand Rapids,
MI 3 3 130
106 Carter-Lee Lumber Co.,
Indianapolis, IN 2 2 135
106 Simonson Lumber Co., St.
Cloud, MN 8 8 140
106 JT’S Lumber, Middletown, RI 3 3 135
109 Louis J. Grasmick Lumber
Co., Baltimore, MD 1 1 55
110 Hammond Lumber Co.,
Belgrade, ME 7 6 230
111 Sterling Lumber and
Investment, Westminster,
CO 9 9 160
112 Douglas Lumber, Kitchens &
Home Centers, Smithfield,
RI 1 1 123
113 Associated Truss & Lumber
Co., Sunnyvale, TX 1 1 170
114 Dunn Corp., Daytona Beach,
FL 6 6 145
115 Tri-County Building Supply,
Pleasantville, NJ 5 5 130
116 Fagen’s Building Centers,
Wexford, PA 6 6 209
117 Dartmouth Building Supply,
Dartmouth, MA 1 1 102
118 Crosslin Supply Co.,
Smyrna, TN 4 4 115
119 Crenshaw Lumber Co.,
Gardena, CA 1 1 51
120 J.C. Snavely & Sons,
Landisville, PA 3 3 165
121 John’s Lumber Co., Mt.
Clemens, MI 2 2 115
122 Mead Lumber Co., Columbus,
NE 18 18 260
123 Lee Lumber & Building
Materials, Chicago, IL 4 4 145
124 Fullerton Lumber Co.,
Minneapolis, MN 13 13 151
125 Clay Ingels Co., Lexington,
KY 3 3 125
Total number
of sales people
inside outside
101 K & A Lumber, Homestead, FL n/a 3
102 Beisser Lumber, Grimes, IA 7 9
103 Century Everglades Lumber,
Miami, FL 5 15
104 DuBell Lumber, Medford, NJ n/a n/a
105 Standale Lumber & Supply
Co. Inc., Grand Rapids,
MI 15 14
106 Carter-Lee Lumber Co.,
Indianapolis, IN 5 16
106 Simonson Lumber Co., St.
Cloud, MN 20 5
106 JT’S Lumber, Middletown, RI 15 14
109 Louis J. Grasmick Lumber
Co., Baltimore, MD 6 2
110 Hammond Lumber Co.,
Belgrade, ME 50 11
111 Sterling Lumber and
Investment, Westminster,
CO n/a 6
112 Douglas Lumber, Kitchens &
Home Centers, Smithfield,
RI 17 12
113 Associated Truss & Lumber
Co., Sunnyvale, TX 5 15
114 Dunn Corp., Daytona Beach,
FL 5 20
115 Tri-County Building Supply,
Pleasantville, NJ n/a 8
116 Fagen’s Building Centers,
Wexford, PA 16 17
117 Dartmouth Building Supply,
Dartmouth, MA 6 11
118 Crosslin Supply Co.,
Smyrna, TN 4 13
119 Crenshaw Lumber Co.,
Gardena, CA 5 2
120 J.C. Snavely & Sons,
Landisville, PA 4 10
121 John’s Lumber Co., Mt.
Clemens, MI 65 45
122 Mead Lumber Co., Columbus,
NE 20 5
123 Lee Lumber & Building
Materials, Chicago, IL 12 4
124 Fullerton Lumber Co.,
Minneapolis, MN n/a 15
125 Clay Ingels Co., Lexington,
KY 12 14
* L=Professional dealer/lumberyard without manufacturing; M=
Professional dealer/lumberyard with manufacturing; S=Specialty
distributor; W=Wholesale distributor
n/a = not available
SURVEY BASE: PROSALES ANNUAL SURVEY OF LEADING CONSTRUCTION SUPPLIERS
AND DISTRIBUTORS
Figure 8 Just Rewards
Types of sales compensation packages used by the PROSALES 100.
Percentage commission on gross margin 47%
Straight salary 22%
Percentage commission on collected revenue and gross margin 21%
Percentage commission on billed revenue 18%
Performance/goal-based bonus 18%
Percentage commission on billed revenue and gross margin 15%
Percentage commission on collected revenue 15%
Team-based incentives 11%
Other 5%
SURVEY BASE: PROSALES 100 (MULTIPLE ANSWERS ALLOWED)
COPYRIGHT 2003 Hanley-Wood, Inc.
COPYRIGHT 2003 Gale Group
