Tony Miller, Hanneke’s president, says his company’s commercial business comes primarily from general contractors and specialty subcontractors that renovate offices and build retail outlets and malls. His company has also supplied larger projects, such as the construction of St. Louis’ new Busch Stadium, the extension of the city’s MetroLink light-rail system, and new casinos and hospitals. Miller says 25 percent of what Hanneke sells to commercial accounts is lumber and building materials.
Allied Building Products, the 155-branch distributor based in East Rutherford, N.J., generates an estimated 35 percent of revenue from this sector, and it’s made a big investment in money and time to expand its commercial business over the past decade, says Rick Pagano, Allied’s national director of government sales, who works out of its Oak Forest, Ill., branch. Pagano says his staff finds opportunities, brings them to the company, and, when they reach a certain stage, turns them over to the branches. Pagano says the value Allied adds to these transactions is to keep government agencies abreast of what products are commercially available.
Allied usually stays within the parameters of its existing assortment—roofing, siding, and windows—for commercial customers, and shuns business that requires a lot of special ordering. But the product demands of government agencies are precisely why some dealers say they spurn these accounts. “Some of the government’s specs are onerous,” explains Ken Miron, owner of Stevenson Lumber in Stevenson, Conn. “They’ll ask for lumber with 19 percent moisture rate, and lumber that’s been sitting outside for a while will absorb more than that before it’s delivered. I don’t need that aggravation. Plus, I’m happy with the commercial business we have.”
Stevenson Lumber, with three locations, has found that contractors’ heaviest orders are for Sheetrock and steel studs for their commercial work on shopping centers, strip malls, and mid-rise apartments. Last year this dealer did $10 million in commercial sales, or around 8 percent of its total sales, says Miron, who notes that his “biggest problem” is finding people willing to carry Sheetrock onto commercial job-sites, especially for multistory projects.
Far and Wide Grimes, Iowa–based Beisser Lumber maintains a separate sales force as well as four engineers in its estimating department for commercial accounts, which generated 25 percent of its three locations’ revenue last year. Its president, Kim Beisser, says one key to Beisser Lumber’s success has been its willingness to “travel” where business takes its customers, and the company has supplied commercial jobs as far east as Ohio, as far west as Colorado, and as far south as Texas. Another dealer, Matheus Lumber in Woodinville, Wash., relies heavily on reload centers to provide lumber, engineered wood, and trusses to commercial accounts, many of which work outside the state, says sales rep Dave Neiger.
Most dealers that expect commercial sales to rise seem to see the greatest gains coming from increasing their share of existing accounts’ purchases. Allied wants to fulfill the day-to-day maintenance needs of local government agencies with such products as tools, safety, and sealants, says Pagano. And Warren Lumber recently supplied $100,000 in materials to a contractor that built a restaurant for a client who plans to build seven more. If that contractor gets those projects, “we will, too,” says Ewing hopefully. —John Caulfield is a contributing editor for PROSALES.
