Distribution Nation

The nation’s leading wholesale distributors of home improvement products and building materials saw an increase of 2.23% in 2011 sales, according to the research that produced the 2012 Home Channel News Top 100 Distributor Scoreboard.

It wasn’t easy.

According to the data culled from surveys, financial reports and estimates, the nation’s top 100 distributors produced a total of $40.263 billion in sales, compared with $39.385 billion in 2010.

In a year when an anticipated building boom never materialized and economic recovery seemed agonizingly slow, several companies showed high performance. How? It wasn’t easy.

“We knew going into 2011 that the industry was still effectively in a zero-sum environment, and that if we and our customers were to grow, it would be due to increased market share more than from an improving economy,” said Ron Beal, CEO of Memphis, Tenn.-based Orgill.

Orgill is one of a short list of home channel distributors to achieve sales growth in the double digits. Others include Amerhart, Blish-Mize, Cedar Creek, ENAP, PACOA, Progressive Affiliated Lumbermen Cooperative and Weyerhaeuser. If there was any common thread from the 2011 success earned by these distributors, it would be a combination of staying aggressive in both customer acquisition and expansion opportunities, and honing efficiencies wherever possible.

“Some of the changes have been small,” said Nate Jorgensen, VP, Weyerhaeuser Distribution. “We saved significant dollars through more efficient truck routing, for example. Other changes have been larger, such as adding entire product lines or bringing rebar cutting in-house.”

Amerhart’s Mark Kaspar had a simple answer to how his company scored a 10% increase. He said the company added a major product line — functional cabinet hardware — and expanded its footprint. Of course, it only sounds simple.

Here, in the words of the executives who pulled it off, are some of the high-growth stories on the Top 100 Scoreboard:

Orgill, up 11.7%
“We focused on retaining every customer, and doing everything we could to help them grow their sales at retail. Continued operational improvements helped us maintain fill rates at consistently high levels, tighten the delivery windows for our truck fleet and improve the overall quality of our services in practically all areas,” Beal said. “The cumulative impact of these efficiencies enabled us to profitably operate with lower margins, thus allowing reduced prices to our customers. Expanded assortments in almost every product category and aggressive new promotions helped our retailers seek out new avenues for growth in their local markets. Not surprisingly, the things that worked for our existing dealers also proved to be attractive to the several hundred new customers who came on board with us during the year. Everything combined to make 2011 a very good year for Orgill.”

PACOA, up 27%
“Investments were made in three key areas: technology, people and infrastructure,” said Steven Geismar, president of the Port Washington, N.Y.-based paint and hardware distributor, formerly known as the Paint Applicator Corporation of America. “We launched a scanner initiative that gave our sales force the ability to more efficiently scan orders and service customers. We upgraded our website, as it became more user-friendly and is the preferred website with several of our customers where we share the business with our competition. We invested in new trucks and material-handling equipment to handle our increased business and improved our service levels by offering next-day service on our trucks as we grew into new markets. We added more than 4,000 new stocking SKUs to support the new business that we are now servicing, as well as used the new products to grow share in our existing customer base.

“We strategically added new salesmen to our sales force where we felt they would best complement our existing sales force, and kept to our core business and territory of strength to ensure that we could sustain the investment.”

Cedar Creek, up 19%
“First of all, we have a number of branches operating in one of the better recovering housing regions (Texas and Oklahoma) and so have benefited from that, as well as from the overall increase in housing starts across our entire operating area this year,” said a company spokesman for the Oklahoma City-based LBM distributor. “We service several building market segments, including new construction, R & R, home centers and industrial customers (cabinet shops, furniture, outdoor play sets, etc.) We created separate growth initiatives this year for each segment and were successful in the first half in reaching many of our objectives.

“Finally, some of our revenue increase has come from our geographic expansion, although most are startups that will take time to reach the revenue level of our established locations.”

Weyerhaeuser Distribution, up 14%
“In 2011, we re-focused the business on market and customer needs,” said Jorgensen, VP, Weyerhaeuser Distribution, based in Federal Way, Wash. “After years of fine-tuning our supply-chain skills, we leveraged our relationships and our reputation in the marketplace as a strong and reliable company to fuel our growth. We’ve continued to build momentum in 2012 with a growth pace that is far greater than what we achieved in 2011.

“A few key areas for us in 2011 were expanding our market-tailored product offerings, growing our already-expert sales and service team and continuing to keep costs in check.”

Comments

What happened to the former

What happened to the former in-depth study you used to do? Facts like store count, sales per customer, etc. is important data.