I am pleased to present 2017’s ProSales 100 Installed Sales survey results. Out of the 100 dealers total, we found that 63 offer installed services of one sort or other. This chart shows the number of dealers currently providing particular services as well as those that plan to install those products:
You can see that more than 35% of all 2017 ProSales 100 member companies install three products: entry doors windows, and cabinets. No surprise there, as these have been leading the list almost every year since both when the ProSales was founded back in 1992 and installed sales became a regular business for LBM firms in the mid-1990s.
In addition, the list when viewed in total represents just about every component or process in the construction of a home, with the exception of mechanicals. We as an industry have grown exponentially through the addition of services and products being offered installed, most all of which has been based on pull-through demand from our customers.
The category for whole house construction seems small. But look closer and you’ll see dealers offering framing, floors, trusses, wall panels, and other components–basically, stopping just short of whole-house construction.
When I look at the list of products/services being offered, I’m not in the least surprised, either by the categories or the percentages of dealers offering same. What does surprise me is the relatively low percentage of dealers indicating they intend to expand or offer additional services in the future, especially in light of the well-publicized labor shortage in our industry.
This would seem to indicate that these are mature programs, well fleshed-out and proven to be the products and services both in demand by customers and manageable by the dealer.
Now let’s think about the same list: only from a decade ago, in 2007. That year saw the same three products on top: windows, entry doors, and cabinets. This despite the fact that in 2007, the top 100 was quite different. Consolidation wasn’t quite as rampant, so many of the independent dealers represented in 2007 are now part of one of the larger national chains, whose target customer is now, and always has been, the production builder. And many of the newcomers since 2007 are specialty dealers, a group that usually doesn’t install products.
Ask many of the other PS100 members that don’t install and you’re likely to hear them reply, “How can I make money doing that?” In many instances, this remains a valid question. We sometimes install for our builders simply to protect that particular product category, hoping to break even financially with the install. That is not the way to approach this business. Many of my clients not only generate profit from installed/construction services, they lead with these as primary service offerings. You can capitalize on construction services, you can be profitable and you can differentiate yourself in a given market by doing it right.
In my next column I’ll take a look at component manufacturing and tie that into construction services.
