Home Center Merchant

BILL FISHMAN :i:i:i:il::l:ir:i::::l:i::;::I::i:11

Bill Fishman & Affiliates

11650 lberia Place

San Diego, Ca.92128

lltE wERE flying about t500 feet UU above the sround in a Cessna 172. Never before h-ad I felt so safe in a small aircraft. In an emergency we could have landed anywhere. During the entire 90 minute flight I spotted only a few houses.

Finally a city appeared on the horizon. Steve maneuvered the plane to give me a good overview of the community. He spotted his yard and retail showroom, the few competitive hardware stores, and the tralfic arteries into town. During the drive from the airstrip to the store I mentally reviewed all the possible reasons for some of his potential customers to shop at his nearest lumber competitor 170 miles away. My guesses were wrong.

Two years earlier Steve had joined a hardware buying group. One of the collateral benefits was a well designed advertising program. The group supplied him with easy-to-use module advertising materials that allowed Steve to create his own very professional appearing ads with a great supply of hardware and houseware artwork and copy. It was simple to prepare good-looking weekly ads with this material.

Steve and I slowly reviewed the last two years of ads. Can you imagine his shock when he realized that it had been 17 months since he last showed a piece of dimension lumber in the newsPaPer? Fifty-nine weeks since paneling w:rs promoted and not one mention of millwork during the two years.

All the selllng tools you need from managers manual, sales desk manual, LaBelle tapes, consumer sales and "howto" materials to deck diagranns. lf you want to sell woocl -A^ deck systems. Erecto- a9\) Pars the one to lroi,*E-inror-ro,-ttanTofr

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OAKWOOO MANUFACTURING, INC.

ManufacturcR & Distributo6 ot Eredo-Pet wooct Deck Systems & Acc$sofles

PO. Box 519/ Oxford, Mlchlgan /8051

I was prepared to find that his store was poorly located. It wasn't. I suspected the merchandise selection was bad. I found it excellent. I imagined high prices. But Steve was more competitively priced than any other retailer I had ever worked with who had "the only game in town." The store layout was good too. The sales help was pleasant, attentive, and well schooled in product knowledge. Even the displays and signing were more professionally prepared than I expected. Each department was well presented in the showroom from lumber and building material to housewares.

I then surmised that Steve's concern about his advertising program could be well founded. That was his original motive for retaining our company-to survey his advertising activities and find why they failed to deliver the sales projections.

Steve brought out the scrapbooks containing two years of the store's advertising. Before lifting the covers I envisioned hard to read layouts, ineffective copy, poor product illustrations, and bad newspaper reproductions. I was wrong again. The ads were crisp, well written, and easy to read. But only l0 minutes into my review of the old tearsheets the problem became obvious.

"When did you go out of the lumber business?" I asked him.

"Go out of the lumber business?" he answered. "Are you crazy? l've got the largest lumber inventory in two counties. "

"Not in print you don't," I replied.

His customers were shopping the big city yards because inadvenently Steve had allowed his advertising to alter his company's positioning in the market. He had destroyed his lumber image to promote for traffic.

The turn-around was swift. Lumber was promoted in at least 5090 of the space in the new ads, and the store instituted a periodic inexpensive direct mail program to builders and contractors.

The story you have just read was not my most recent experience with building material retailers who allow non-lumber to dominate their advertising. It was my lirst experience as a consultant. The year was 1974. Since then I've seen the same syndrome much too often.

It's an easy trap to fall into. There's a lot more variety available promoting non-lumber items. while it takes some creativity to prevent repetition and stagnation in lumber advertising. Without changing the presentation and the product illustrations, lumber ads can soon look tired. But relief is on the way.

Building material manufacturers and distributors are beginning to recognize that it's their obligation to keep the retailer supplied with current ad materials that allow them to keep their lumber image. The hardware wholesalers too are adding more and more lumber modules to their syndicated advertising programs.

I nexpensive advertising systems featuring lumber are available through newspap€rs and other industry art and advertising sources.

Most retailers will collect these advertising aids. A few will know when and how to use them. Watch them grow!

Out Fox Tag Switchers

As the profit squeeze gets more acute, it becomes increasingly necessary to stop pilferage, " unauthorized markdowns," and price-switching. For maximum security, your pricemaking system should use tags and labels that are not switchable.

These suggestions will help you achieve the security you need:

(1) Never use handwritten tags or labels. This is an open invitation to price-switchers to "write their own tickets."

(2) Don't give a label a "handle" for easy peel-away; always apply labels away from the edge of an item or carton.

(3) Use the right tag or label for the job. Self-adhesive labels are fine for metal, plastic, glass, etc., but they are easy to remove from fabric. For fabric items, attach tags with tough, f lexible plastic fasteners.

(4) Pricemark books on the inside of the cover, not on the paper jacket which can be easily switched to a higher priced book.

(5) Don't label the carton alone; also label the item inside it, since the item can be switched to a lower-priced carton.

(6) Don't label lids of caps of jars and aerosol cans; they are too easy to switch. Label the side or bottom of the item.

(7) String tags attached by looping invite easy removal. Put a security seal on the string, or use a strong, plastic fastener.

(t) No adhesive sticks well to a cork surface. Apply label to a metal, glass or plastic part of the item if possible.

(9) Make a small hole in sealed, plastic bags and mark the item inside. Don't label the bag itself, since it's a cinch to slit these open and switch the merchandise.

(10) Never apply a pressuresensitive label on top of another label. Remove the old label first. It's too easy to peel off a new label and get the "old" price.

(11) For marked-down items, put a special control number on the new tag or label for quick verification.

(12) Expensive items deserve extra precautions. Hide a second verification tag. This tag should be referred to at the cash register.

(13) Train your checkout clerks to look for evidence of tampering, such as a torn break-away tag.

(14) In general, observe common sense security practices, such as keeping your marking room clear of unauthorized personnel and never leaving tags and marking equipment unattended and accessible.

GATLIN REPORT

We are right in the middle of planning and working hard for the success of our Annual Convention and Building Products Trade Show. The convention committee has put the agenda on the drawing board and vows this will be "the best convention and trade show in our history." Prices for the social functions will be reduced drastically and two new entertainment features have been added. The old Mississippi "boll weevil," G.V. "Sonny" Montgomery, Congressman from the third district, will be our keynote speaker at the all-industry luncheon. We will do everything possible to make you welcome, and feel at home at our annual "family reunion," so now is the time to start making your plans to be at the Royal D'Iberville Hotel in Biloxi on February 10, ll and 12, 1983. Members will be

receiving the convention registration and hotel reservation forms in December and nonmembers will be extended an invitation to our convention.

We had three excellent workshops during the year. Bill Dieruf's "Successful Management Of Independent Business," The Pence Brothers' "6 Ways To Improve Return On Investment," and The Western Wood Products Association's "R€tail Lumber Seminar." I like what the Pence Brothers have to say about seminars: "One of the b€st business investments possible is education and training of your p@ple." We plan to increase our educational programs in 1983, but promise to bring you only the "top quality" workshops. We will have a workshop in either Oxford or Tupelo in early 1983. More about this later.

Now getting back to business at hand. I have been traveling over the state lately and have found the lumber and building material dealer doing some real "shonuff" good business. Their attitude seems better. I heard very few complaints about business conditions. My advice to all is to continue to take a firm positive attitude. Stay abreast of any and all problems that you may face in the future, go after the customers that are out there, and don't worry about the past. Gear up for the changing market conditions. Spend your advertising dollars where you think it will do you the most good. Fix-up, clean-up, and stock-up your store with merchandise that will produce a fast turn over and make you a good profit. Boast about your services-delivery and credit, but keep a sharp eye on expenses and account receivables.

Our building material dealers woke up one morning not too long ago and read this headline,

"New Mortgage Money To Be Available For State's Home Buyers."

The Mississippi Housing Finance Corporation sold $127 million in bonds to be used for subsidized housing. This will benefit about 2800 Mississippi home buyers and the money will be available to them at about l29o interest. The loans would be growing equity mortgages, or GEMs, meaning more money paid in the fust ten years would apply to the principle, and result in repayment in l6 years in place of 30 years. These little "Gems" will boost our housing economy and put some unemployed contractors back to work,

is Ascocladon of Telas

TOPICS

sR. JOE BUTLER, executlve vlce precldent

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unemployment insurance problem.

The major provisions of House Bill No. I changing the unemployment compensation tax rate for Texas employers (effective Oct. l) are as follows:

(1) Annual taxable wage base for fourth quarter 1982 will remain at $6,000 per year. Beginning January 1983, annual taxable wage base will be $7,000 per year.

(2) Maximum experience tax rate on annual taxable wages has been changed from 4.090 to 6.090 beginning January I, 1983.

(3) The Unemployment Compensation Fund floor will remain at 5225 million.

(4) Should the Trust Fund be depleted on October I of a given year, the new surtax rate would be 5/10 of 1.090 of annual taxable wages.

(O The Governor is authorized to borrow money from the Federal Government to replenish the Trust Fund.

(O The penalty and interest for delinquent unemployment insurange tax contributions has been changed from 1.090 to 1.590 per month.

For the first time in the history of the state, lumber yard and building material dealers employees now can b€ dividd between strictly store employees who do no yard work, and all other employees and yard, warehouse, drivers, etc. for workers' comp€nsation rates. The store employee classification is Code 8O58 and the other is Code 8234.

The State Board of Insurance has approved new workers' compensation rates effective as ofSept. I, 1982. Therateapplicable per $1fi)ofpayroll for Code E058 is $2.42 and the rate for Code 8234 is $6.79.

It is most important that you separale your payroll between store employe€s and yard employees. Store employees must be confined strictly to store duties.

GAYLON STACY executive vlce president

flUn mid-winter meering cruise, YJan. 8-15, will be aboard the M/S "Song of Norway" to the Western Caribbean.

This ship is one of the world's most luxurious floating resorts. Service is indescribably wonderful. The ship makes three ports of call during the cruise: Georgetown, Grand Cayman; Montego Bay, Jamaica; and Cozumel, Mexico.

Three lavish multi-course meals are served daily, along with mid-morning and mid-afternoon snacks and fabulous midnight buffets. Entertainment in- cludes three all-star variety shows and four late-night shows. Recreation opportunities aboard ship are limitless.

From January I through September this year our membership has increased by 24 new retail members and I I new associate members. During the same period, 16l retailers and 69 wholesalers renewed memberships.

New retail members are Currell's Lumberjack, Inc., Elk City; Grand County Homeworks, Grove; Chapman Lumber & Hardware, Pauls Valley; Jack's Lumber & Home Center, Prague; House Lumber Co., Antlers; Elmore Lumber Trade Center, Elmore City; Y