How to get higher treated margins

By Huck DeVenzlo Managcr, Advg. & P.R. Hickoon Corp.

It OU can make more money on I pressure treated lumber. Don't feel trapped by low price pressures.

At many lumber yards and home cent€F, pressure heated wood has become a commodity-type product, or close to one. It's a high volume, low p,rofit item. Fifteen years of consumer demand growth prompted building material outlets to add treated wood to their inventories. Now with nearly all lumber dealers carrying treated products, demand has quit growing. Competition is tougherthan ithas everbeen. The pressure on treated wood prices is intensified by the emergence of mass merchandisers.

While probably no dealer has been immune from competitive pressure, some dealers have been successful in preserving reasonable margins. Their secret? If you don't want a product to be treated as a commodity, don't treat it as a commodity younelf.

You have to make your product different from the rest. You have to set it apart in name, features, display and advertising. This differentiation is not difficult. A good supplier can furnish considerable help and you can improve your margins handsomely.

(1) Stock brand name material.

A known brand gives your customer confidence in the quality and safety of treated wood. Generic wood and unfamiliar brands are not going to boost your margins or reflect well on your store. Which would you be willing to pay more for: Coca-Cola, Dave's Cola or an unmarked can? Stock brand names and advertise them by name.

(2) Offer speciel prcductc.

Consumers will spend more for an item thatsaves them time orhas a clear benefit. Carry value-added treated products such as pre-cut step stringers, spindles, newel posts, mailbox kits, weather resistant lumber and prestained wood.

(3) Promote projects, not products.

Highlighting lumber prices in ads causes consumers to use price as the main measure for comparing stores. Instead, focus on product differences and benefits, and promote projects. Homeowners don't really care about the price of a2 x 6, but they do care about the cost of a new deck. Offer deck packages that include hardware and building plans. Throw in an instructional video tape, or a discount on stain.

(4) Put your treated wood where it gets respect.

If your treated wood is in the farthest comer of your yard and unprotected against weather, your customers will have low regard for it. To make more money fromtreated wood, give it some respect. Indoor supplies should be in a welllit area like your packaged goods. Outdoor racks should be accessible without a four-wheel-drive mud monster.

(5) Keep an orderly yard. You'll have a hard time getting higher margins if consumers see broken bundles, individual pieces scattered on the ground, steel bands lying around, and trash littering the area. Demand goodJooking, even bundles from your supplier. Then stack them neatly. Tell your yardmen that maintaining the lumber area can bring in more profits and see that your yard is orderly.

(6) Mrkc urc of polnt of punch.se mrtcrlrb.

Pooterr, litcraturc racks, dcck displays and pamphleE c8n hclp cnctomcrs undcrctand the fcaturcc of your Ecatcd wood. Such itcms also cncouratc consumcn !o build morc projccts. If you're not doing so now, get building plans and p,romotional matcrials from your heatcd wood supplicr. Display litcraturc promincntly and kcep racks filled. A sloppy or half-cmpty rack lcaves an undcsirablc imprcssion.

(7) Treln your countermen.

It's not easy to have a knowlcdgeable staff. You suffer continual turnover of personnel and you carry thousands of SKUs, but helpful, informed countermen can have a significant impact on your bottom line. Ifa prospective customer wonders why your treated wood prices are higher than a competitor's, a trained salesman can explain the differences: brand name, lifetime warranty, lumber grades, retention levels, built-in water repellents, etc.

Nearly all recent surveys indicate that while consumers are buying conservatively, they are willing to spend money on quality products. Yoursalesmen can sell higherpriced wood if they can explain the benefiis. Competent salesmen can also take advantage of cross merchandising opportunities.

StonJat aGlarre

Techniquce for selllng trcated wood a3 a spcclalty ltem . .. namc brand matcrial, prolect selling and promo' tional activitics to increase ]€turns on sales.

(8) Conduct a deck clinic. Sponsor a deck clinic. With some planning and promotion, you can effectively differentiate your treated wood and your store from others. Your treated wood supplier should be able to help you with ideas and presentation materials.

(9) Hold a program for contractors. Make sure your professional customers and prospects understand the features of your treated wood. Have a product seminar for pros or host a contractors' breaKast. Supply information that contractors can pass along to their customers. At a minimum, contact builders with a mailer or include flyers with your monthly invoices.