From a timing standpoint, custom builders are more akin to their tract-home peers: Lumber and other product packages are delivered in a predetermined volume based on a fairly rigid schedule of construction phases—albeit typically over a much longer period of time than a fast-tracked production operation.
But because remodelers rarely know all that they’ll need at the start of a job, they’re more apt to make ad-hoc calls to the yard for a one-off or fill-in deliveries during the project. “We consolidate purchasing as much as we can, but it would be silly to have our leads [site superintendents] run around for stuff,” says Chris Stebnitz, sales and brand manager for Stebnitz Builders, a remodeling firm in Delavan and one of Barker Building Supply’s customers. “If something pops up, we’ll ask [Barker] to deliver it.”
Not only that, but remodelers like Stebnitz and Scott may have several jobs going at any given time, while a custom home builder, especially one at the upper end of the market, might manage only one or two simultaneous projects. Even if both require roughly the same dollar volume of materials, their ordering and delivery habits are like apples and artichokes. “For a remodeler, everything is different on each job,” says Stebnitz.
By contrast, custom builders tend to order a more standardized package of materials. Though “custom” implies unique, not all small-volume builders construct truly custom homes; as a result, their materials packages (especially structural products), specifically in terms of phased deliveries, are far more reliable than a remodeler’s. “We typically modify a plan from our own library or from a house plan catalog,” says Dan Storrs, co-owner of Phoenix Custom Homes in Bridgewater, Conn., resulting in framing and other product packages that are similar in scope and specifications.
In addition, custom builders and remodelers have different product demands. “With custom builders, there’s more leeway. They’re more willing and able to go with products that are stock items or easily available,” says Smith, which, in a small way, also reflects their cost-conscious nature. “Remodelers need to match what’s there already or put back exactly what was there before,” Smith says, recalling his efforts to find rare and discontinued casing profiles, door styles, and hardware from sources nationwide to meet the demand of his remodeling contractors.
Storrs concurs. “We rely on brand-name products and hitchhike on their value [to our home buyers],” he says. “We select products that we know people will like and that we have no trouble with,” in terms of delivery, installation, or warranty service.
That being said, there are similarities among all small business owners, including contractors, when it comes to purchasing habits. “In some ways, their behavior mimics consumers, in that they buy both emotionally and rationally,” says Ferguson.
For dealers, the trick to serving both small-volume builders and remodeling contractors is to commit to an inventory (or at least reliable sources) of higher-margin finish products, sales services (preferably through a staff dedicated to small-volume customers), and some sort of recognition program for such customers. “It encourages them to let you get to know them better,” says Ferguson, which, in turn, results in better target marketing to capture their business, boost sales and profits, and attract even more small accounts.
Service Masters Dealers have heard this before: Small-volume customers rate services over price. While that’s true generally, there are clear differences between custom or small-volume builders and remodeling contractors in terms of what they need in that respect from a dealer or supplier.
Scott, for instance, can’t work with a rookie salesperson. “Almost everything we do has some aspect of customization,” he says, expressing the need to work with dealer reps able to easily source what he needs. “I can’t volume-purchase anything, which means I’m paying a markup, even more than a small builder, so I expect some service for that.”
