Marvic has been gradually increasing its focus on the remodeler market over the past decade, shifting from encompassing 25 percent of its business approximately 10 years ago to a high of about 75 percent in most locations for 2004. “We are built on that business,” says Jim Stevens, a general manager at the dealer’s North Wales, Pa., location, who was a remodeler himself for several years before joining the supply side of the industry.“Remodeling and new-home construction are simply two different animals. The remodeler wants quality materials, warranties, and high service, where the new-home builder wants to get the materials thrown up, the job done, and to get out.”
Stevens acknowledges that the service requirement is always extremely high. “The remodeler wants fast and fair pricing, they want on-time delivery, and they want turnaround on their quotes,” he says. “For every order, you have to be willing and able to explain where it is, when it is, and how it is at any given time in the supply process. The thing about remodelers [is that] even if it is bad news, they want to hear it. They have their backs to the wall on time frames, but if you can communicate, they can usually deal with it.”
In Allyn Harth’s opinion, Marvic’s intimate understanding of the service requirements and communication needs of remodelers like himself is a rarity in the construction supply chain. Harth even hypothesizes that many pro dealers and specialty distributors are not even aware of who their remodeling customers are. “I think they don’t realize what a large market remodeling has really become,” he says.“[But to be fair], I don’t think the market itself even knows the true statistics.”
While Harth allows that many suppliers may not have the time or capital necessary to either add or train salespeople to specifically address the remodeler market, he feels good old-fashioned service will likely win the day for pro dealers seeking to gain a larger remodeler market share. “Serving remodelers means prompt return of price quotes, timely deliveries, and knowledgeable salespeople,” he says. “But it is more fundamentally the consistency in that service, and the supplier honestly wanting to help us succeed.”
MARK IV Builders Time Sensitive At Bethesda, Md.–based MARK IV Builders, a REMODELING Big50 1996 alumnus, president Mark Scott does not have an immediate answer to what he also sees as the difficulty pro suppliers often have identifying their professional remodeling markets. In fact, MARK IV company officials share the lament of many professional remodelers that pro dealers still do not seek out, service properly, or sell to their segment of residential construction, despite the market numbers that should convince them otherwise. “I’d be willing to bet that most of the time suppliers do not even know who their remodeler customers are,” says MARK IV estimator Kirk Van Camp, who supervises the firms’ six in-house superintendents.
“I don’t know how to make the remodeler more important to suppliers,” Scott adds. “Generally speaking, a fairly [small] home builder building four to five houses a year is going to be [on par with how much we purchase].” Scott also feels that some of the financial risks inherent to full-scale home building results in a certain amount of speculation among contractors, and suppliers are often the ones to pay the price. “There are a lot of small home builders that are really just gamblers,” he says.“Having been through commercial, residential, and now remodeling, I realize that small home building is all about the money—it is all about cost.”
Not necessarily so with professional remodeling, Scott says, where MARK IV’s average project budgets in the Washington, D.C., market have been edging close to $250,000, and upgrade-minded homeowner clients are less likely to make product decisions based solely on price. “I don’t think suppliers [and manufacturers] realize how important the remodeler is to the product selection process,” Scott says of the gravity of his role as a salesperson helping clients spec products for their projects, adding that it is the remodeler’s recommendation rather than a TV ad that will establish the weight of any given brand at the end of the day. “[Manufacturers] can spend as much as they want on consumer advertising. I can beat that in two minutes.”
In addition to helping to push product sales through at the homeowner end, remodeling clientele may be less challenging to pro dealers than other contractors when it comes to balancing the accounts. Scott feels that most professional remodelers pay supply invoices within 30 days, a benchmark that MARK IV consistently beats by approximately two weeks.
Still, Scott concedes that remodelers are a service-dependent segment of the industry, perhaps even more so than custom home and production builders on the new-construction side. “We are a pain in the ass, individually as a company and as an industry,” he says. “We require a lot of product knowledge, and we are not ordering five to 50 houses at a time.”
According to MARK IV production manager Andy Hannan, who supervises the firm’s 12 jobsite superintendents, the variety in remodeling projects eliminates the ability of suppliers to cookie-cut specs and pricing from one purchase to the next. “We never do the same thing twice,” he says, adding that the complexity in sourcing different materials from job to job actually increases the remodeler’s need for consistent, face-to-face, relationship-based supply. “We’ll usually use about five to eight suppliers depending on the type of job, but we seek to create a relationship with dependable suppliers rather than bid-out jobs,” says Hannan. “It’s something that we try to keep control of because those suppliers constitute roughly 20 percent of our job. Our normal job budget is 20 percent labor, 20 percent materials, 60 percent subs.” So with MARK IV approaching the $5 million mark in annual volume for 2004, that’s $1 million in revenue being pulled in by the firm’s primary suppliers—not a bad payback for the effort. Pro dealers who want in on that game need only deliver on the age-old contractor cry for service, which for MARK IV means on-time, error-free delivery.“Bad service will outweigh any other factor in choosing a supplier,” explains Van Camp. “Bad service is not delivering when you say it is going to be there. And it doesn’t matter how far out the delivery is—if it is four weeks, it is four weeks—because we schedule that far in advance, but if you say it is going to be there in four weeks—make it happen. We have schedules to meet and zero extra time left.”
