Issuu

MERCHANT

SIDING FORECAST – FROM FIBER CEMENT TO WOOD D-I-Y ONLINE MARKETING

The

JUNE 2012

Magazine

THE VOICE OF THE WEST’S LBM DEALERS & DISTRIBUTORS – SINCE 1922

The

MERCHANT

Special Features 9 INDUSTRY TRENDS SIDING FORECAST: FIBER CEMENT LEADS CATEGORY REBOUND

10 PRODUCT SPOTLIGHT UPPER-GRADE REDWOOD SIDING POISED FOR COMEBACK

12 MANAGEMENT TIPS RUNNING ONLINE CONTESTS

14 FEATURE STORY CO-OPS AID IN SOCIAL MEDIA

June 2012

Volume 90 Number 12

Magazine

In Every Issue

Online

6 TOTALLY RANDOM 16 COMPETITIVE INTELLIGENCE 18 OLSEN ON SALES 20 FAMILY BUSINESS 26 MOVERS & SHAKERS 32 NEW PRODUCTS 42 ASSOCIATION UPDATE 43 IN MEMORIAM 44 CLASSIFIED MARKETPLACE 45 DATE BOOK 46 IDEA FILE 46 ADVERTISERS INDEX

BREAKING INDUSTRY NEWS, INDUSTRY PHOTO DOWNLOADS, & THE MERCHANT: DIGITAL VERSION BUILDING-PRODUCTS.COM CHANGE OF ADDRESS Send address label from recent issue if possible, new address and 9-digit zip to address below. POSTMASTER Send address changes to The Merchant Magazine, 4500 Campus Dr., Ste. 480, Newport Beach, Ca. 92660-1872. The Merchant Magazine (ISSN 7399723) (USPS 796560) is published monthly at 4500 Campus Dr., Ste. 480, Newport Beach, Ca. 92660-1872 by Cutler Publishing, Inc. Periodicals Postage paid at Newport Beach, Ca., and additional post offices. It is an independently-owned publication for the retail, wholesale and distribution levels of the lumber and building products markets in 13 western states. Copyright®2012 by Cutler Publishing, Inc. Cover and entire contents are fully protected and must not be reproduced in any manner without written permission. All Rights Reserved. It reserves the right to accept or reject any editorial or advertising matter, and assumes no liability for materials furnished to it.

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The Merchant Magazine June 2012

Building-Products.com

TOTALLY Random By Alan Oakes

Lifelong learning, a competitive advantage

from the first-ever NAWLA Leadership Conference in Colorado Springs. The event emphasized what I had realized over the last few months—that I need to get back to my roots, which I will explain later. The conference was the first event in my 11 years in the industry that was from start to finish full days of management and executive learning programs with top industry and out-of-industry speakers. No time off, just pure session after session and almost 100% attendance at each session. I learned a lot, as no doubt did the other attendees—a mix of owners, senior managers, and up-and-coming future executives. First, my congratulations to NAWLA for developing this new program and congratulations to the members for making the investment to attend—and bring along others—in these difficult times. I am sure that, due to initial feedback, next year’s program is already being planned, and I urge all current and future NAWLA members to put this event on your calendar for next year. I also recommend taking along other managers and or key employees. The cost vs. return is always a key factor, and I believe that the benefits will far outweigh the expense. I have spent decades in the educational publishing and conference/seminar training industries (from sales to executive management training to technology, domestic and international, for companies small to Fortune 100). I have spent a good portion of my business life in education and understand the value of lifelong learning. And the more I learn, the more I realize how much I have left to learn. Today, after we learn something, circumstances change again and different knowledge is needed. At the NAWLA conference, we discussed “Cash is King.” I would also argue “Knowledge is Power.” We all need constant education, training and reinforcement. Yet I realize not all companies can afford to offer or are equipped to handle such training. So, what to do? What was clear to me in the beginning of my current business life was that this industry by nature has been a hands-on training industry, as opposed to sending management and employees for job skills training. What also has become clear to me is that we live in an era where there is a need for more learning opportunities. We have lived through one of the most difficult times in business history. I can imagine many had issues to deal with that they were ill-equipped to handle, in addition to the many day-to-day issues we all face. Many of our readers—managers, executives, salespeople, and managers-in-training—could benefit from a constant source of education. This should be general education and not just industry training. Our magazine has over the years featured countless educational articles written by experts, but I have realized over the last six months that we need to do more. So, in the next couple of months, we will launch a new branded educational series aimed at not only executives and owners, but also the future managers in this industry. It is also clear to me that not all employees see our publications when they arrive at your offices as many subscribers hoard them (normally great news). I ask that our magazines be passed around to those who would benefit. (Or, simply order more subscriptions!) Free digital issues are available on our website, building-products.com. In the near future, each magazine will have a QR code for a direct link to our publications as well. Our publications have always been a source of industry and product news for a combined 120 years, but now I want us to be your resource for executive education as well. So, look out in the coming issues for our new “Mastering” series—two more good reasons to read and enjoy our publications. As we hit our 90th year in business next month, we want to be your resource for the next 90 years as well. HAVE JUST RETURNED

Alan Oakes, Publisher ajoakes@aol.com

The Merchant Magazine June 2012

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MERCHANT

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A publication of Cutler Publishing

4500 Campus Dr., Ste. 480, Newport Beach, CA 92660

Publisher Alan Oakes ajoakes@aol.com

Publisher Emeritus David Cutler

Director of Editorial & Production David Koenig dkoenig@building-products.com Editor Karen Debats kdebats@building-products.com

Contributing Editors Dwight Curran, Carla Waldemar, James Olsen, Jay Tompt, Mike Dandridge Advertising Sales Manager Chuck Casey ccasey@building-products.com

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INDUSTRY Trends U.S. Siding Forecast

Fiber cement to lead siding comeback

.S. DEMAND FOR siding is forecast to grow 8.4% annually through 2016 to 96.5 million squares, valued at $10.2 billion, according to a new study by Freedonia Group. Growth will be spurred by an increase in housing completions from their depressed 2011 base. Although housing completions will remain below the levels reached at their cyclical peak in 2006, the recovery will spark above-average gains in the residential siding market through 2016. The expected rebound in housing completions through 2016 will reestablish the new housing market as the largest end use for siding. Demand for siding in residential improvement and repair applications will rise at a moderate pace through 2016. Those homeowners that put off improvement projects—such as the replacement of worn out or outoffashion siding—will undertake them in the future, boosting demand. Nonresidential demand for siding is also forecast to grow rapidly through 2016, albeit not at the level of the residential market. Gains will be driven by advancing nonresidential building construction expenditures. The office and commercial and lodging segments, which experienced the most rapid demand declines between 2006 and 2011, will exhibit the strongest growth going forward as more office buildings and retail sites are erected. Many of these structures will be built with such materials as fiber cement and stucco that serve as low-cost alternatives to brick, wood, and stone. Among material types, stucco, brick and fiber cement siding are forecast to see the most rapid demand Building-Products.com

FIBER CEMENT siding will continue to take market share away from competing materials, although vinyl will remain the top-seller.

gains through 2016, increasing at double-digit paces. The rebounding residential markets in the South and West regions of the U.S.—where these materials are most often installed— are projected to experience the strongest growth in population and housing activity through 2016. Brick and fiber cement see wide use in the South, while stucco is most commonly used in the West region. Thus, as more homes are built and remodeled to meet the needs of the regions’ increasing population, demand for those siding materials will also advance. Fiber cement siding will continue to take market share from other materials, such as vinyl and wood. Demand for fiber cement siding will be spurred by its ability to be pro-

duced into siding that resembles more costly materials, such as brick or stone. Fiber cement siding demand will also be supported by continuing consumer acceptance of the material because of its performance properties, such as resistance to degradation caused by insect attack and moisture. Vinyl siding accounted for the largest share of siding demand in 2011 and will continue to lead the market in 2016, as such innovations as insulated vinyl siding and products that better resemble natural materials—such as wood and stone—will promote demand. However, competition from fiber cement and stucco siding will check growth. Fiber cement and stucco siding are said to offer end-users better long-term durability and require less maintenance.

June 2012 The Merchant Magazine

PRODUCT Spotlight Upper-Grade Redwood Siding

Redwood siding rising New investments, second-growth availability drive resurgence of upper-grade redwood

CHECK OFF: Moses Perez, production supervisor, inspects a board of clear redwood siding at Redwood Empire’s manufacturing facility in Redding, Ca.

when redwood was among the more preferred and popular siding materials for fine homebuilding. There never has been any question as to redwood’s beauty or durability. Its authentic natural look blends in particularly well in mountain or lakeside communities. The increased acceptance of vinyl and the introduction of composite materials such as fiber cement have chipped away at the market share for HERE WAS A TIME

The Merchant Magazine June 2012

all natural wood species. Vinyl now commands 40% of the $6 billion siding market, while wood products hover around 10%. Pricing spikes for redwood’s highest grades before the turn of the 21st century likely helped accelerate its market-share drop, as did prior changes in harvesting practices that resulted in less upper-grade redwood coming to market. The perception grew rapidly that upper-grade redwood simply was not available.

Now, after more than a decade of declining demand, Redwood Empire is poised to help redwood reclaim lost market share. The company acquired its second remanufacturing facility last August, in Redding, Ca., and has been investing to bolster operations there since. The facility, which once produced mostly specialty products for Hawaiian markets, primarily manufactures siding and trim from upper-grade redwood. The proximity of Redwood Empire’s primary sawmill in Cloverdale and manufacturing facilities in Asti, Ca., to southern-range redwood forests provides easy access to quality logs. Each mill is customdesigned to cut for grade rather than to maximize throughput. Though the milling process often takes longer, the result is greater output of upper-grade redwood and more availability of vertical grain lumber, which feeds Redding’s siding-production operation.

A Sustainable Product

The redwood siding popular throughout the 20th century largely was the product of old-growth trees harvested from California’s San Mateo, Santa Cruz, and Mendocino counties. Now these areas, the first to be logged, are the source of secondgeneration forests managed for Building-Products.com

decades under California’s sustainability laws—the toughest in the nation. Many second-growth trees in the southern end of redwood’s natural range exhibit qualities similar to the wood harvested in the heyday of redwood siding. Redwood harvested from sustainably managed forestlands along California’s coast has proven to be the source of eco-friendly, long-life products. A renewable resource, redwood trees remove greenhouse gases from the air through photosynthesis, absorbing carbon dioxide and releasing oxygen. Life Cycle Assessment research, which studies cradle-to-grave environmental impacts of building materials, has shown that redwood products store more carbon than is used in their manufacturing. The net result of using sustainably harvested redwood is a decrease in greenhouse gas emissions.

Geography Correlates to Preferences

Even in the lean years for redwood siding, there were pockets of demand across the country with interesting and fairly constant geographic preferences. The East Coast, for instance, has shown the greatest demand for beveled siding, particularly 1/2”x6” pattern 322R, followed by 1/2”x8” beveled pattern 323R and some 1x6” tongue and groove patterns. Texas markets have generally preferred thickbutted rabbeted siding like pattern 477. The Midwest typically has leaned more heavily toward 1”x6” tongue and groove options, while the West Coast has favored shiplap patterns (particularly pattern 793) and some bevels.

Economic, Consumer & Architectural Drivers

Remodeling efforts that allowed homeowners to seamlessly replace damaged siding on existing structures or

CLEAR, VERTICAL GRAIN 1/2”x8” pattern 323R plain beveled siding is stacked for shipment. Building-Products.com

REDWOOD’S NATURAL durability makes it a preferred choice for exterior applications.

match home additions to established looks drove much of Redwood Empire’s initial manufacturing at its Redding facility. Indeed, remodeling of aging homes is still forecast to play a significant role in the overall siding market. Recently, however, new home construction has accounted for a larger share of production. Several factors may be behind the increase in demand for redwood siding for new homes, including price. Once consistently the most expensive option among natural wood siding products, shifting market dynamics have made redwood price-competitive with cedar siding. Green building trends may also be having an influence. Research indicates consumers are placing greater emphasis on environmental performance and sustainability issues in their purchase decisions. Redwood siding is recyclable and biodegradable, and offers a favorable carbon footprint. Perhaps the greatest influence has come from the architectural community. Architects have long been attracted to redwood—especially vertical grain redwood—for interior and exterior applications because of the wood’s natural beauty. Increased awareness that vertical grain redwood is again available appears to have spurred a rise in architectspecified redwood siding. While vertical grain availability remains somewhat limited in the top Clear All Heart grade, Redwood Empire has produced significant quantities of vertical grain siding in all upper grades, including Heart B, Clear, B grade, and selected commons. As consumer interest and demand for redwood—helped by architects and designers—moves inside the home, interior trim will likely experience an uptick as well. For Redwood Empire, the availability of redwood logs whose characteristics resemble their historic predecessors and the increased recognition of redwood’s environmental attributes have laid a foundation on which the company plans to build. The Redding mill has the machinery to produce all patterns in the CRA pattern book, and can match virtually any pattern produced in the past 100 years. The siding business is growing, and the firm plans to make the investments necessary to market siding successfully. Keep your eye on redwood in the siding market. Watch the trends to see how architects and consumers approach and use high-end redwood. June 2012 The Merchant Magazine

MANAGEMENT Tips Online Contests

Boost customer relations, sales with online contests

to increase traffic on your company’s website or Facebook page? An online contest can encourage customers to return to your site—and even get them to share it with others. “Years ago, contestants mailed their entries and photos in,” says Chris Fox, marketing manager at Universal Forest Products. “Those days are over with the advent of turnkey website tools.” For the past three years, UFPI has run its best deck contest through its Deckorators website. “We don’t want to exclude builders or d-i-yers that aren’t currently using Facebook,” he says. “This may change in the near future with more builders promoting their business through social media activities.” Conducting the contest through its website also allowed uploading of large photos and comments from builders and consumers without any restrictions. “Facebook places certain restrictions on contests and sweepstakes, which can be a significant hurdle,” says Fox. “You must use an approved Facebook application or risk having your account suspended.” OOKING FOR WAYS

ACCEPTING SUBMISSIONS online has made participating in and operating contests, such as TimberTech’s Deck Disaster promotion, easier than ever.

The Merchant Magazine June 2012

However, submitted photos are periodically posted on Deckorator’s Facebook fan page, as are contest winners. Past contest photos are also posted on Deckorators’ Flickr page. By using more than one kind of online media, UFPI ensures that online visitors remain interested and engaged—in both the contests and in the company’s products. A successful contest will encourage communicating, subscribing, and sharing—all of which will increase traffic to your company’s site. Just make sure social media buttons are prominently displayed and easy to use. Another way to build traffic to your site is to let online visitors rate contest entries, but be prepared to handle and post the feedback. Viance keeps online visitors interested in its Ecolife Fish-More Deck Challenge by awarding monthly prizes. Professional deck builders and d-i-y-ers enter the contest by submitting photos and material receipts through the Ecolife website. The best entries are posted online, showcasing the company’s decking products. “We are excited to review the creativity of deck builders and homeowners across the country,” says Christopher Kollwitz, director of marketing at Viance. Once the final prizes have been awarded, Viance maintains interest in the Ecolife brand by posting photos of the best entries—providing inspiration for potential customers and creating an audience for the next contest. Building and maintaining a fan base is one of the main reasons to conduct an online contest. That was the goal of CertainTeed’s contest, which is conducted on its new Living Spaces Facebook page—which, in turn, promotes the company’s exterior building products to consumers. “This is our first major effort at social media,” says Ken Warshaw, director of marketing communications for CertainTeed’s siding products group. “Building our Facebook community was the motivation for the contest.” As for dealing with Facebook restrictions, he says that apps from third-party companies are needed to run contests on any social media site. To enter, homeowners upload 30 to 90 second videos showing why their home needs a facelift. To keep online visitors engaged, the top 10 videos will be chosen by Facebook users. CertainTeed will select the grand-prize winner, who will receive exterior building products— including installation—and star in a “webisode” series that will be available on CertainTeed’s Facebook page and Building-Products.com

How to Run a Successful Online Contest

Before the Internet, conducting a contest meant paying for print ads and hoping people would take the time to fill out an entry form—then actually mail it. In contrast, online contests are easier to participate in, easier to run, and a good way to learn about your customers. But they do require a certain amount of preparation:

Determine your target audience and appropriate channels. Acknowledge the assets and limitations you have to work with. Take time to understand your audience and what you expect from them. Think about the appropriate channel for engagement: brand website or blog, Facebook, Twitter, etc.

Encourage creativity. Usergenerated content such as photos and short videos help participants engage with your products. They also take advantage of the natural urge to compete, giving participants their turn in the spotlight.

YouTube channel. WOLF Building Products also uses Facebook to conduct its contests, which are offered twice yearly. This spring’s competition introduced the company’s new focus on Americanmade products. The winner—selected at random from nearly 1,600 entries— received two free airlines tickets to anywhere in the U.S. “We had an overwhelming response to the contest, which drew far more entries than either of our two previous sweepstakes,” says WOLF’s chief marketing officer Jim Groff. “It just reaffirms the fact that contractors and homeowners prefer high-quality products that are made here at home.” Although Groff acknowledges that Facebook does have contest rules, he says they are easy to follow. The contest application required by Facebook wasn’t a problem either: it was developed by the company’s outside web resource. As for the focus of this year’s fall contest, W OLF is soliciting suggestions from its Facebook fans. “We wanted to start a conversation, a positive dialogue about building products,” he says. “We did all that with the contests.”

DECKING PROJECTS have proven a popular theme for online contests staged by manufacturers, wholesalers and retailers.

Make it easy to enter and stay involved. Ensure that the entry process is easy to navigate and the entry requirements are clearly explained. A contest that requires participants to upload photos and videos on one platform, share through another, and vote on a third will generate confusion and frustration.

Facilitate communication. A contest is an opportunity to engage in an active dialogue with your current and prospective customers, fans, and followers. Share contest updates, respond to questions, and encourage participants to share their entries and rally for votes. Make sure appropriate social media buttons are prominently displayed. Collect information. If you ask the right questions, you’ll learn a lot about your contestants through the entry process. You’ll also learn a lot from the interaction and conversation that takes place around the contest—if you take the time to listen.

Building-Products.com

June 2012 The Merchant Magazine

FEATURE Story Social Media

Co-ops help dealers excel in social media

is that retailers should have an active social media presence to maintain constant, interactive communications with their customers. For many dealers, however, the problem is that word constant. Most independents don’t have the time and manpower to supply a daily flow of Tweets and Facebook posts. So, their co-ops are beginning to step in, to provide tools, content and

Photo by Spectrio

OMMON BUSINESS WISDOM

training. According to Jeff Gooding, director-consumer marketing for Ace Hardware Corp., “At a high level, we educate our retailers on what Ace is doing on behalf of the entire brand from a national level, as well as provide them with best practices and trends in the space.” Specifically, Ace: • Provides retailers with a page on acehardware.com, customizable for their store, showing the customer their

DIGITAL DISPLAY hangs from the ceiling of Ridgefield Supply Co., Ridgefield, Ct., to broadcast branded, zoned digital content highlighting

The Merchant Magazine June 2012

hours, services, brands, departments, special offers, events, etc.

• Offers feeds to all local search engines to make sure member stores appear when customers are searching online.

• Utilizes a dedicated social media section of its intranet to post information on Ace’s efforts and provides best practices for its stores. • Educates its field marketing staff

the dealers’ suppliers, products, services, and Twitter feed. Building-Products.com

through monthly calls, so they are able to answer retailer questions in the field.

• Hosts training sessions at its national conventions twice a year, educating dealers on what the co-op is doing in the digital space.

• Meets throughout the year with dealer groups for updates and education.

Grand Rapids, Mi.-based Progressive Affiliated Lumbermen has been heavily promoting the use of social media to its members, starting with its monthly webinars for retailer members and featuring social-media presenters at its annual show. “We continue to pass on best practices or good ideas from our members to other members,” said Joe Myers, membership service manager for PAL. “One member received 1,400 ‘likes’ when they ran an Ugly Kitchen Contest in their market. At last count, we have 70% of our members with some level of Facebook page for their company.” Wayne, Pa.-based Lumbermens Merchandising Corp. has also been experimenting with a way to stretch its members’ social media arm—even after customers have walked through their front door. LMC members have teamed with Spectrio to install indoor digital signage that can promote their Twitter and RSS feeds and Facebook pages. LMC members Ridgefield Supply Co., Ridgefield, Ct., and Economy Lumber Co., Campbell, Ca., were already Spectrio customers, using the tech firm’s on-hold messaging services, when they began looking into digital signage. The in-showroom screens display their social media feeds, highlighting current specials and video ads, along with local information, news and entertainment items. “We are now at a moment where the costs for flat panel screens has dropped so low that they have become a viable option for many small businesses, include lumber dealers,” said Aaron Kleinhandler, c.e.o. of Spectrio. “Our VideoCasts usually cost around $75 and $150 a month, with some of our customers updating their displays more frequently than others. The outside feeds are refreshed daily, and dealers’ messaging can be varied by time of day.”

Building-Products.com

June 2012 The Merchant Magazine

COMPETITIVE Intelligence By Carla Waldemar

City slicker

STORIA, OR., is a feisty little city hugging a bay etched into the Pacific coastline that separates Oregon from Washington. (Well, boasting a population of just 10,000, one’s tempted to call it a fishing village.) Indeed, that’s a major industry here, where the wild Columbia River meets the sea—where nature is so unruly that episodes for Ax Man and Deadliest Catch have been filmed for reality TV. Earlier, it charmed and unsettled Lewis and Clark in equal measure when they arrived in 1806, making it the oldest northern settlement west of the Mississippi. City Lumber Co. wasn’t a project of those explorers’ axes, however, but—launched in 1904, it can lay claim to being the oldest lumberyard in the state—abetted, in large part, by all those fisheries that needed boxes for the cannery (another stat: the largest in the country). After a succession of owners— some more savvy than others—in 1975 it caught the eye of Jerry Newenhof, an entrepreneurial type who’d previously managed a warehouse, served as Sheetrock buyer and as manufacturer’s rep for ceiling tiles. His focus, until his death in 1995, was on the folks in town who needed his services: a strong retail thrust. And that’s what continues to drive City’s business today, recently voted Best Home Improvement Store in Astoria. Sons Greg and Jeff, who grew up sweeping sawdust and stocking shelves, have pledged to continue that legacy—well, after they took it on as their life’s calling. Finishing college, Greg decided to take the summer off to bum around, until an injury at the store found Dad on the phone with a

The Merchant Magazine June 2012

plane ticket back. Jeff’s post-college dream was to play golf on all courses in the state. “I got to two or three” before he, too, was corralled. No regrets, they swear. It’s all they know and all they love. Greg manages purchasing, payroll and accounting, while Jeff oversees advertising and sales. “I’m the one who gets to talk on the phone,” he says on the phone. (He’s also the one with the Internet savvy, which we’ll get to later.) And, although they haven’t been tapped by the cameramen yet, the business of keeping a home-center business afloat—nay, prosperous—in this day and age tops many a survivor challenge on reality TV. Yes, busi-

ness admittedly is down 30%, but, true to Dad’s ethos, all 11 staffers are still on board. “We’ve never laid off anyone for lack of work—part of Dad’s philosophy,” says Jeff. “And if we did, it’d take a couple of years to get a new employee up to speed. (Besides, we’re operating in the black; we’re very careful.”) Close to 70% of City Lumber’s business is generated by small remodelers and the town’s valiant d-i-y brigade. Despite close quarters (“at 6,000 sq. ft., we’re jammed to the rafters”), City offers a full panoply of building products: fancy and commodity lumber, myriad types of plywood, molding, roofing, insulation, tools—and tool rental—and the list

Building-Products.com

AT 108, Astoria, Or.-based City Lumber Co. lays claims as the state’s oldest lumberyard.

goes on. A popular home décor department, launched early on by the brothers’ mom, flourishes with everything from cabinets and lighting to wallpaper and paint, with in-home measuring services offered. Lawn & garden also has taken off. The building’s exterior is lined with dozens of pallets of soil, bark and mulch—plus vibrant pots of posies. “They add a spot of color—the only one on the block—which sets us apart and brings in traffic.” As do the front-and-center Weber grills on sale and also utilized by vendors cooking treats for the public as they showcase their latest and greatest—another facet in that “Best in Town” award. Other contributors: Backed by Dad’s emphasis on service, “We greet people at the door and take ’em to what they need, and either my brother or I am always on the floor,” says Jeff. The service ethic continues to loading and delivery (take that, Home Depot!), so when you order 25 bags of concrete and scores of heavy pavers, there’s a boom truck at the ready. Plus a cement mixer in the rental Building-Products.com

department, or a sander when you buy floor stain. The Home Depot behemoth that arose five miles away doesn’t present a problem. But just before it opened, City’s purchasing partner, Do it Best, cautioned to expect a 20percent drop in sales. “But the first month, we were only down $1,000,” smiles Jeff. Chalk up a win for superior service. (And when you check the excellent website, www.citylumber.com, you’ll quickly find a list of aboveand-beyond services, from propane exchange and pellet storage after payment to pipe threading and key cutting. Yet, the list leads off with “free popcorn.” Gotta love it. Another business driver is City’s Best Rewards Club, offering participants $5 off every $250 in purchases, plus notices of special, members-only sales. And how about the annual chance to win $1,000 in a shopping spree? (Again, check out the website; this year’s winner looked pretty darn ecstatic.) Jeff’s the go-to guy for the web. “It’s my baby, I guess,” he allows. “We segued from our first computer in 1983 to a software feature today designed to facilitate online sales.” City (okay, Jeff) also makes good use of the company’s Facebook page and keeps folks titillated with Twitter tweets, such as a recent “Sign of spring, just like the swallows returning Capistrano: The Adirondack chairs have arrived.” “We tweet to announce new products, but with a sense of humor because a simple hard sell gets tuned out.” But City Lumber has not abandoned print. It distributes a monthly Do it Best circular and also has made a practice of purchasing the back page of the newspaper’s TV section. But just this week, a deal at no higher price enticed City to move its message to a full page every Friday, to catch the eyes of the Weekend Warriors about to gear up. All forward moves in trend with the times. But the best push forward ever, insist both brothers, came in 2006 when they attended a trade show that allowed them to reevaluate their purchasing partner and—bottom line—switch to Do it Best. “Our former buying association hadn’t been honest with us, so we started looking around,” says Jeff. “Changing to Do it Best was one of the best moves ever. After making the switch, our business tripled. We only wish we’d done it earlier. It was an eye-opening experience, offering us a huge variety of products with consistent tracking and deliver service, and a store design crew when we were thinking of expanding, including a survey of 3,000 of our customers.” (Respondents, ironically, insisted they they already loved, loved, loved City Lumber: “Gratifying to have our own feelings reinforced,” allow the brothers.) And the future? “Things are starting to bounce back. Oregon is always behind the rest of the country, so when other dealers were moaning in 2008, we were still doing fine. Now, it’s down some. But I’m 52, and I plan to stick around. And my son, Jerry, who’s 8, comes in to pop the popcorn and pick up nails—just like I started, a lifetime ago.”

Carla Waldemar cwaldemar@comcast.net June 2012 The Merchant Magazine

OLSEN On Sales By James Olsen

Why you?

of the lumber industry has a value proposition: the mill, the remanufacturer, the office wholesaler, the hybrid office/inventory-on-the-ground wholesaler, the full-service wholesaler, the retailer, and the specialty retailer. Whoever we are, we must be able to know and articulate (sell!) our value. Let’s talk about the wholesale distributor and broker value. They are similar. What value does a good broker bring? Credit. Most accounts want to use more money than their bank allows. Using a broker can expand and leverage a customer’s credit. Time. It takes time to stay on top of markets. Brokers spend 100% of their time thinking about—living in—the market. A good broker is looking for deals for us all the time. Non-standard Product or Delivery. Producers usually have a production mentality. Producers want to sell their product the way it comes out of their plant. When customers need a customized tweak, brokers can often bridge the gap. Example: The mill produces 2x4 in ratio 1-1-2-3-4-4. That is the way they want to sell it. If the customer wants to buy it 0-0-0-6-10, often a broker will sell the shorts to one customer and sell the longs to another. Consistent Quality, Competitive Price. If the customer wants consistent quality at a competitive price, brokers are a good option. Buying from a single high-line producer will solve the quality issue, but may leave the customer uncompetitive. If the high quality producer is on another product when the need arises, or has sold their production to a higher price level, consistency will be difficult. A broker will be able to keep us in a variety of high-quality product, competitively priced, on a regular basis. Expertise. A broker may have an expertise in a product or market that is foreign to the buyer. A buyer or business owner may buy 150 products, whereas the broker may deal all day with six to 10 products. Global Market Knowledge. Producers see the market from their point of view. Customers see the market from their point of view. A broker has the advantage of seeing the market from many points of view. Hustle. A single supplier can hustle only so much; they have fewer options. A broker has many options to “hustle” for the account. Negotiation Expertise. Brokers are expert negotiators (or should be). If the account does not want to or is not good at negotiating, using a broker is a great option. VERY SEGMENT

The Merchant Magazine June 2012

Creativity, New Ideas, Best Practices. Because brokers talk to many different businesses, they are exposed to more ideas than the average person. A good broker always asks questions about what is working. A good broker will keep his accounts up to date on all changes in the market, be it price, product and other trends. Risk Insurance. Having all our supply eggs in one basket is risky. Brokers are a good balance against supply problems (from a single source). Market Insurance. The broker who takes positions in the market takes the risk out of the market for their clients. The position of the position-taking broker is, “I am always ahead of the market—heck, I make markets—therefore I will always be your most consistently competitive option.” Proprietary Relationships. Brokers can get accounts into suppliers that are beyond their reach for whatever reason. Accounts can also use brokers to buy from suppliers with whom they have a poor relationship. Flexibility. Brokers can supply flexibility on terms. Not all, but many, brokers will give preferential terms. Broker Value Example: We are experts at ______ and ______. We have lifetime relationships with producers. These producers count on us to move X amount of product for them every month. We have access to lumber that the average broker doesn’t because we are close to and live with the suppliers. In addition, we have a fleet of truckers who work for us exclusively. While many are having trouble booking loads, we are able to get our customers’ product when needed. We also run many programs and contracts that allow us to mix and match tallies for our customers that are otherwise difficult to find. These programs also keep our customers consistently competitive. We are financially strong. We have grown with our customers, in very competitive markets, and continue to do so. What’s your value proposition? James Olsen Reality Sales Training (503) 544-3572 james@realitysalestraining.com

Building-Products.com

FAMILY Business By James Olan Hutcheson

It’s my turn

NCE UPON A TIME,

family business patriarchs had it easy when it came to deciding who would take over the family business. Centuries-old customs required that the eldest son received control of the family business upon the death of the father. No one ever retired. Business literally lived or died based on the often-unknown management skills of the male heir, which often were not revealed until dad died. Today, family business succession is handled with more forethought and under the greater scrutiny of inheritance laws. Affluence, combined with people living longer complicates the difficult decisions of when and how to pass the reins of the family business—with the least harm to the business and family. The question of who gets to run the family business is complicated, of course, by relationships within the family. Numerous clients have confessed that they are troubled about how to pass the business without destruction. While many still plan to be an integral part of their business for several more years, they realize that their desire to work long hours had waned in recent years. They are slowing down. What worries many of them is deciding which of the heirs will make the better leader in the long run. One client commented that he felt “a little like Solomon in the Bible, trying to divide my baby, my business, between two heirs. Somehow that seems almost easier than picking one over the other. I love what I do,” he said, “but I don’t see that same passion in either my daughter or son.” But that passion might actually be there, just displayed in a different way because each person has a unique per-

sonality. Indeed, the heirs may be eager to have their turn at running the business. These kinds of dilemmas are far from unusual, and they underscore the very subjective emotions that cloud the business choices a senior family member must make about the future of the business. If it’s any comfort, the challenge of passing on the family business is a worldwide problem. A family feud over who should run the Hyundai Group, South Korea’s largest conglomerate, brewed up a dispute that involved the national government. Finally, the 84-year-old founder of Hyundai appointed one of his sons as the sole group chairman to end the family squabbles. But this decision came in the face of a national movement to discourage family dynasties that do not involve shareholders and board members. The image of passing a baton on to the next person in a relay race is a familiar one. It is an apt image for businesses in which a family business leader hands over the responsibility to a child. Even under the best of circumstances, it can be a difficult and awkward time of transition. For the elder leader, it means giving up control not only of the business but also of the parent-child relationship. The relationship rarely stays the same at home once control is relinquished at the workplace. Moreover, the parent becomes dependent upon the success of the business in a different way and may feel vulnerable to the business decision being made by the child. As in a relay, once a runner passes the baton, he spends the rest of the race as spectator and cheerleader, but no longer contributes directly to the outcome. For an entrepreneur who feels he has been the sole motivator for the birth and continued success of the business, this new limitedpartnership role requires a new understanding, a new patience. Furthermore, few people are prepared for the slowing down that all of us should expect as we get older. It is important to see that a relay race is the perfect metaphor for life. We humans are designed to pass on our knowledge and possessions from generation to generation. The human lifespan is a natural cycle that begins with a period of development and learning followed by a long middle period of accrued experience and activity followed by a gradual diminishing of energy and ability. When a senior family member acknowledges this natural cycle, the transition can be accomplished with less strain and less (Please turn to page 30)

The Merchant Magazine June 2012

Building-Products.com

Pacific States Taking Over Hoquiam Plywood Mill

Pacific States Industries, San Jose, Ca., has acquired Hoquiam Plywood, Hoquiam, Wa., and had hoped to restart the facility by the end of May. Formerly owned by a co-op of 100 employees, the mill closed late last year due to poor market conditions According to general manager Mark McFeely, the facility has been renamed Hoquiam Plywood Products and expected to rehire roughly 60 workers.

Millworkers Douse Blaze

Before firefighters could arrive, employees at Stimson Lumber Co., Gaston, Or., were able to extinguish a small sawdust fire in the mill’s powerhouse May 1. Once on the scene, firefighters discovered that millworkers had knocked down parts of the wall to douse the blaze, as well as all hot spots. “Most of our guys didn’t even go into the building because Stimson crews had it knocked down,” said spokesman Ken Bilderback. “Their employees did a great job.”

Amid Bankruptcy, Lumber Products Readies for Layoffs

Lumber Products, Tualatin, Or., will lay off 65 workers, including its chief financial officer and vice president of sales and marketing, June 29. The company filed for Chapter 11 bankruptcy protection in April, with debts and assets ranging from $10 million to $50 million. Most of the affected employees work at headquarters, in

the company’s accounting, human resources, and sales divisions. Workers own a majority stake in the company, through a stock ownership program started in 1986. Members of the Hall family, which founded the company 75 years ago, control an 11.1% share. In addition to its Tualatin base, the company operates eight distribution branches in Washington, Idaho, Utah, Arizona, and New Mexico. “Lumber Products does not anticipate an increase in its operations (and workforce) in the near future, and thus, expects the upcoming layoffs to be permanent,” wrote Chapter 11 Trustee Edward Hostman.

Western Lumber Producers Cautiously Optimistic

Lumber sales in the Pacific Northwest are slowly rebounding, but insiders predict that a full recovery from the housing slowdown will take years. “People call it the Great Recession, but for this industry it was the Great Depression,” said Allyn Ford, president of Roseburg Forest Products, Roseburg, Or. “We’re talking about a slow and steady increase, which gives us the opportunity to get back on our feet. It’s not going to be the boombust thing we’ve experienced in the past, but it should be a slow and steady increase.” Weyerhaeuser, Federal Way, Wa., is also feeling optimistic. “We expect increased revenue in the second quarter, compared to the first quarter,” said spokesperson Anthony Chavez. “We also anticipate that volumes will

increase by 10%.” He cites several reasons for the gains, including new domestic and international customers, more efficient mills, and rising multi-family demand. Other producers report smaller gains, but remain cautious. “We’re not going to see any huge uptick in the near future,” said Ken Maurer, RSG Forest Products, Kalama, Wa. Sawmills throughout the West produced 3.1 billion bd. ft. of lumber in the first three months of the year, a modest 2.8% gain compared to the same period in 2010, according to the Western Woods Products Association. Production at inland mills increased nearly 10%, and 0.5% at coastal mills.

DEALER Briefs

Tweedy & Popp Ace Hardware, Seattle, Wa., closed its 5-year-

old Richmond Beach, Wa., store May 13 and will open a new store— Edmonds Hardware & Paint— in nearby Old Milltown on Aug. 1.

AG Supply Co ., Wenatchee, Wa., held a grand opening last month at its 6th Ace Hardware branch, in Sultan, Wa. (Chuck Estes, mgr.)

Ace on Fax opened a 16,000-sq. ft. Ace Hardware franchise in Denver, Co. (Mary and Mike Cottrell, owners). Peach Tree True Value Hardware, Grand Junction, Co., is

buying a 70,000-sq. ft. site in Fruita, Co., to build its 2nd location.

Navajo Westerners Ace Hardware Stores is remodeling its

stores in Window Rock and Kayenta, Az., to mimic the look and product mix of its new flagship location in Chinle, Az.

Tri-State Ace Home Center

relocated its Bullhead City, Az., store to a larger, 20,000-sq. ft. facility.

Kenyon Nobel Lumber & Hardware , Bozeman, Mt., held a May 12 grand opening for its new garden center.

HomCo Ace Hardware, Flagstaff, Az., has earned FSC chain-ofcustody certification from Scientific Certification Systems. 22

The Merchant Magazine June 2012

Building-Products.com

LiteSteel Packs It In

Australian steel manufacturer OneSteel has shuttered its LiteSteel Technologies light structural beam business. LiteSteel’s three-year-old plant in Troutville, Va., discontinued production March 30. Although the division was unable to turn a profit marketing “the first new structural building product to be introduced into the U.S. market since engineered wood,” it reportedly achieved 70% recognition in a mainly commodity market.

Redding Lumberyard Moves to Former Competitorʼs Home

Weaver Lumber has moved across the street in Redding, Ca., to a site formerly occupied by Moss Lumber & Hardware, which closed last August after 65 years of business. “I want to make sure that people know I feel a lot of humility to be going over to that side,” said owner Brent Weaver. “We were always competitors, but we also did a lot of business with each other,” said Charlie Moss. “We would

work together. We weren’t at each others’ throats at all.” In the months after Moss went out of business, Weaver acquired its store inventory and truss business from the holding company that had purchased Moss’ assets. “It was really the truss business that got the ball rolling,” said Weaver. “I was always interested in the truss business because it was the last piece I needed to complete the full circle of our services.”

Helicopter Forestry Firm Sold

Wilbur-Ellis Co., Walnut Creek, Ca., has acquired the assets of Farm & Forest Helicopter Service, Napavine, Wa. Acquisition of the 48-year-old Farm & Forest will increase WilburEllis’ footprint in the region, expand its aerial application services, and add to its forestry customer base in the Northwest. The new acquisition will be a part of the Agribusiness Division’s Northwest operations. For the last 15 years, Wilbur-Ellis has provided Farm & Forest with forestry protection products.

SUPPLIER Briefs

Osmose has agreed to be acquired by Oaktree Capital Management, Los Angeles, Ca. Osmose’s existing management team, led by president/c.e.o. James Spengler, will remain. Kelly-Wright Hardwoods , Anaheim, Ca., inked a 5-year lease to relocate to a 62,650-sq. ft. DC on 3.8 acres in Brea, Ca.

Merritt Bros. Lumber Co ., Athol, Id., shut down one day and sustained slight damage to a truck trailer from a May 3 fire that started in a sawdust hopper.

Capital Lumber’s DCs in Denver, Co.; Salt Lake City, Ut.; Dallas and Houston, Tx., are now distributing Railing Dynamics’ new preassembled RDI Metal Works Excalibur railing system.

Screw Products Inc. , Gig Harbor, Wa., has signed Feldman Wood Products, Garden City, N.Y., as a new distributor for its fasteners.

McFarland Cascade, Tacoma, Wa., is proud to announce that its Terratec Composite decking received an evaluation report (ESR#2051) from ICC Evaluation Service (ICC-ES), providing evidence that the ricehull/recycled plastic composite decking meets code requirements.

Redwood Empire , San Jose, Ca., has launched a new website— www.buyredwood.com—as part of a new marketing campaign to emphasize the increased availability of uppergrade redwood. The site provides the distribution community, architects, contractors and homeowners with information on the environmental attributes and natural durability of redwood. LP® SmartSide® Trim & Siding products offer the beauty of cedar with the advantages of engineered wood. That means consistent boards with no knots or voids. An industry-leading warranty that provides a 5-year, 100% labor and replacement feature and a 50-Year Prorated Limited Warranty on the substrate. And our proprietary SmartGuard® process that ensures LP SmartSide products resist fungal decay and termite damage. LP SmartSide Trim & Siding. All the advantages you need. Distributed By

Rocklin, Ca. • 800.348.1400 Sanger, Ca. • 559.876.3624

The Merchant Magazine June 2012

Eastman Chemical Co.’s

Perennial Wood received honorable mention for the M EDIUM Award for Material of the Year from Material ConneXion.

Deceuninck North America’s

window products have been GreenCircle certified for recycled content and closed-loop products.

Building-Products.com

MOVERS & Shakers Denny McEntire, sales & procurement mgr., Mendocino Forest Products, Ukiah, Ca., has retired after 50 years in the industry, the last four with Mendocino. Denise Bough, ex-LiteSteel Technologies, is a new industrial sales rep at Ganahl Lumber, Corona, Ca. Christine Myers has joined Fiberon, New London, N.C., as a product specialist for Colorado. Charley Willett, sales mgr., Sundance Lumber, Springfield, Or., has retired after 14 years with Sundance and 44 years in the industry. Steve Carillo, ex-C&S Wood Products, is a new industrial trader for Bridgewell Resources, Bend, Or. Drew Pittman, ex-LowGradeLumber, has joined the sales staff at Idaho Timber Corp., Boise, Id. Rich Mills, ex-Taiga, is now VMI national accounts mgr. at Boise Cascade, Boise, Id. Ron MacAskill, ex-BlueLinx, has joined Boise’s Riverside, Ca., DC as general line product mgr.-steel. Mike Hamor, ex-Lumber Products, is

a new account mgr. at Capital Lumber, Tacoma, Wa. Lynn Goode, ex-Fiberon, and Scott Shamrell are new account mgrs. in Portland, Or. Roger Ricks, ex-J.M. Thomas Forest Products, has been named mgr. of Alpine Lumber Co., Farmington, N.M. Thomas Rogers, ex-Sherwood Lumber, has joined Patrick Lumber, Portland, Or., as export sales mgr. Tom Klindt, ex-ProBuild, is now project center mgr. at Kenyon Noble Lumber & Hardware, Belgrade, Mt. Greg Stout, ex-AZEK Building Products, has been named territory sales mgr. for Southern California at Boral TruExterior, Murrieta, Ca. Greg Golovko has joined Orchard Supply Hardware, San Jose, Ca., as v.p.-corporate controller. Brian Thom is a new window sales consultant at Bruce Bauer Lumber & Supply, Mountain View, Ca. Tim Davidson has been named general mgr. of Westlake Ace Hardware, Roswell, N.M.

Robert Fritz is new to inside sales at ProBuild Holdings, Denver, Co. Todd Newman, ex-Lowe’s, has joined the outside sales force at Honsador Lumber, Ewa Beach, Hi. Michelle Combs, ex-Moulding & Millwork, has joined Orepac Building Products, Denver, Co., as home center coordinator. Jim Mathews, Quality Assurance mgr., Western Wood Products Association, Portland, Or., has retired after 25 years with WWPA, following 17 years with Weyerhaeuser. Brian LaFave, ex-Hitachi Power Tools, is a new specialty fastener rep for Simpson Strong-Tie, serving Colorado, Utah, SE Idaho, and Wyoming. Ryan Adams has been named senior product cost controller for Timber Products Co., Springfield, Or. Monty Huddleston, ex-Ply Gem, is now territory mgr. at Milgard Windows & Doors, Tacoma, Wa. Nick Miller, ex-Lowe’s, is a new field account rep with HD Supply, Phoenix, Az.

One stop for all your railing needs Wood • Metal • Glass • Aluminum • Interior • Exterior

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The Merchant Magazine June 2012

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Todd Morben, ex-Lowe’s, is new to Stanley Black & Decker, as territory account mgr. for Colorado, New Mexico, Wyoming and Nebraska. Eric Abrego has joined the outside sales team at Pacific Supply, Boise, Id. Charles Salzman has been appointed chief financial officer for New World Millworks, Castle Rock, Co. Jeff Jensen, ex-Contractors Window Supply, is new to Northern California sales at Western Window Systems, Roseville, Ca. Bob Thompson retires June 28 from Western Forest Products, Vancouver, B.C., after 38 years. Karin Emery, ex-Ply Gem Windows, is now customer service mgr. for Mikron Industries, Kent, Wa. Scott Sproul has been promoted to national retail performance mgr. for Do it Best Corp., Fort Wayne, In. Nicholas Kirt, ex-Caesarstone, is a new building insulation field sales rep for Knauf Insulation, for the Denver, Co., area. Ted Stock, president, Western Cascade Industries, Toledo, Or., has been elected president of the board of the West Coast Lumber Inspection Bureau. Bill Greenwood has been hired as executive director for Northern Arizona Wood Products Association, Eagar, Az. Bob Spagnolo, LowGradeLumber, Springfield, Or., competed May 31 on the TV game show Wheel of Fortune. Turner Hoff is the new company electrician at Mungus-Fungus Forest Products, Climax, Nv., according to co-owners Hugh Mungus and Freddy Fungus.

Trex Teams Up on Composite Decking Blade

Trex Co., Winchester, Va., has cut a licensing deal with Diablo tool manufacturer Freud America, High Point, N.C., to introduce the first saw blade specifically designed for cutting composite decking materials. The Diablo/Trex co-branded blade will be offered in three sizes—12”, 10” and 7¼”—for use on hand-held, miter and table saws.

Building-Products.com

www.Roseburg.com

Engineered Wood Products

Quality Engineered Wood Products for today’s builder® Lyle Lee has been building custom homes for over 20 years. Here is what he has to say about Roseburg’s Engineered Wood Products. “When building a quality home, it’s important for all the framing materials to match. In other words come together as specified in the design plans. If the framing is off by even a ¼ of an inch, it can cost me thousands of dollars in time and materials. I find Roseburg’s RFPI®-Joist and RigidLam® LVL to be very consistent in width and depth. When I use Roseburg’s RFPI®-Joist, my floors are more level, stiffer and truer, making my job much easier. This home is 6,000 square feet so I used I Joist and LVL from several different units and the manufacturing consistency was exactly the same. If you want to maximize your profit, I would recommend using Roseburg’s Engineered Wood Products”. Lyle Lee L. Lee Building Company

TF 800-245-1115 Engineered Wood Products | Real Wood Siding | Softwood Plywood | Lumber RFPI®, RigidLam®, RigidRim® and Quality Engineered Wood Products for today’s builder® are registered trademarks of Roseburg Forest Products, Roseburg, Oregon

June 2012 The Merchant Magazine

SP Design Values Go into Effect

Effective June 1, it’s important for lumber dealers to understand that some—not all—grades and sizes of visually graded southern pine now have new design values. Earlier this year, American Lumber Standard Committee’s Board of Review approved the design values changes submitted by the grading rules-writing agency, the Southern Pine Inspection Bureau. The only design values that changed on June 1 apply to visually graded Southern Pine and Mixed Southern Pine sized 2” to 4” wide and 2” to 4” thick (2x2s through 4x4s) in No. 2 and lower grades (No. 2, No. 3, Stud, Construction, Standard and Utility). This also includes new design values for No. 2 Dense and No. 2 NonDense Southern Pine. Design values for all other grades and sizes of visually graded southern pine remain the same, pending results of testing scheduled for completion later this year. As a result, SPIB issued Supplement No. 9 to the 2002 Standard Grading Rules for Southern Pine Lumber providing the new design values, effective June 1, 2012. The new values represent a 25% to 30% reduction in load-carrying capacity. The last major change for visually graded dimension lumber occurred in 1991, when design values for southern pine and other North American species were published based on in-grade testing of full-size samples of commercially produced lumber. Since 1994, SPIB has conducted an annual resource monitoring program developed in collaboration with the U.S. Forest Products Laboratory. SPIB is the first rules-writing agency to publish new design values reflecting these changes. Rules-writing agencies responsible for other species are in different stages for evaluating design values.

Dealers have options

Lumber dealers need to understand that, in spite of the lower design values now in effect, options exist for using southern pine materials. One option is to specify that a customer use a larger size and/or higher grade of visually graded southern pine lumber. Another option is to use machine stress rated lumber and mechanically evaluated lumber. Those in the building supply chain also need to understand that design values for mechanically graded lumber, timbers and specialty items did not change. For all products, sources of supply can be found within SFPA’s online Product Locator at www.southernpine.com.

What about codes?

New design values are incorporated into the building

The Merchant Magazine June 2012

Building-Products.com

codes by reference through the National Design Specification (NDS). The American Wood Council (AWC) has issued an addendum to its Design Values for Wood Construction, a supplement to the NDS, referencing the new southern pine values. AWC is submitting new span and application tables to the International Codes Council, as well as proposing other code and standard changes needed to incorporate new design values into the building codes. State and local code jurisdictions determine adoption and enforcement timelines. Rules-writing agencies are responsible for making new design values publicly available upon approval by the ALSC Board of Review. SFPA and AWC are actively assisting these efforts by providing the new information to the design, specification, user and enforcement communities. It is then the responsibility of building code jurisdictions to determine how and when to begin enforcement.

Important next steps

Throughout the transition period and moving forward, SFPA has continued to provide more information as it becomes available. Check southernpine.com frequently for updates. Dealers will find many of their questions answered by reviewing a comprehensive set of Q&A on the site; visit the page tagged New Design Values. “Since last fall, SFPA has worked closely with organizations representing lumber dealers to keep them informed of the market implications these changes might have,” says Cathy Kaake, SFPA’s senior director of engineered and framing markets. “The intent of the six-month transition period was to allow the marketplace time to begin to use the new design values or switch to other southern pine grades or sizes meeting strength and stiffness requirements.” SFPA does not test lumber or establish design values. Its primary function is to market lumber products and to help users understand southern pine grading rules and design values. Moving forward, the southern pine industry will fill out the full in-grade testing matrix, sampling Select Structural 2x4s, No. 2 and Select Structural 2x8s, and No. 2 and Select Structural 2x10s. SPIB and Timber Products will conduct destructive tests in bending, tension and compression, Building-Products.com

plus gather stiffness and property data. Following this in-grade reassessment, southern pine will continue to be annually monitored with destructive tests. Southern pine’s strength remains comparable to other softwood species used in residential and commercial construction. “The strength and superior treatability of southern pine lumber against decay and termites continues to provide a great value for manufacturers, designers, builders and consumers,” Kaake notes. “The extensive testing protocols used assure that

everyone involved in the specification, sale and use of our products has the most current information about how southern pine lumber can be used confidently and economically. “Component manufacturers, treaters and design-build professionals have many southern pine product options available to them. These customers can achieve the required product performance by identifying a particular design value, choosing from a number of visual grade selections, or specifying their choice of mechanically graded lumber.”

Old World Craftsmanship In Today’s Designs

Hand Hewn Distressed Timbers Geo. M. Huff Lumber Company is now offering Hand Hewn Distressed Timbers in a variety of sizes, shapes and lengths. All our distressed beams are WCLIB grade stamped and will meet structural and architectural applications. All are hand tooled and can be ordered with custom stains and Old World finishes. We can supply timbers to any specification, whether it is Dense, Free of Heart Center, #1/Btr, Select Structural, Green or RFV Kiln Dried. When a plan calls for exposed posts and timbers, count on us to provide you with a product that will last a lifetime. Combine our selection of Douglas fir timbers along with our skilled milling staff and you’ve got one of the best resources in Southern California.

HUFF LUMBER COMPANY SANTA FE SPRINGS, CALIFORNIA

800-347-4833

June 2012 The Merchant Magazine

bachelorette, Emily Maynard, who was impressed when he arrived carrying a pillow bearing a clear, high-heeled shoe. “The name’s Charming, Prince Charming,” he said. When the shoe fit, he added, “I think I’ve found my princess.” Pieper, 31, has been with Greenwood since 2004. (Continued from page 20)

Family Business: It’s My Turn

FOUR MARINES—Ryan Rodriguez, Anthony Hodge, Adam Jennings, and Jordan Stoumbaugh—played in the 5th annual Don Gregson Memorial Golf Tournament hosted May 18 by the Southern California Hoo-Hoo Club at San Dimas Golf Club, San Dimas, Ca., which benefits the Wounded Warrior Project and the City of Hope. For more event photos, see pages 38-39.

Romantic Lumberman Woos on TV

Tony Pieper, a lumber trader at Greenwood Products, North Plains, Or., survived the first round of eliminations as a contestant on the latest season of The Bachelorette. According to the show’s website, Pieper considers himself a romantic. “Very much so,” he is quoted as saying, “because when I am with someone who I think is very special, I’m always thinking about romantic things I can do for them.” His romantic approach stood him well with the show’s

stress. Succession isn’t necessary the result of a “crisis” within the family business. Another complication can occur when the family business leader maintains financial control of the company while turning the day-to-day operation over to another member of the family. Power is divided, and the next generation tier isn’t fully able to independently change or expand. The now-former c.e.o. may be also obligated to pay employees and other overhead expenses even if the company experiences a downturn as the result of the transition. The time-worn issues involved with parent-child bonds of dependence are also a factor, with the child trying to establish new roles of independence. As with the relay race, planning ahead is the key to success. Know your runners and their individual strengths. Who is the fastest at the start? Who has a sustained start? Who has a strong finish? In a family business, skills needn’t be dropped just because one family member is in transition to a position of less involvement. The timing of any business transition is critical. Procrastination can become a healthy attribute when you’re trying to have the business suffer as little chaos as possible from any transition of power. In other circumstances, such

Three Things I’ve Learned: Tips from Seasoned Pros

as when a senior family executive’s declining powers result in poor decision-making, speed can be essential. In any event, it is necessary for the entrepreneur to work hard to plan a succession. It’s important to realize that there is a window of opportunity for a smooth hand off of power and control. The children need time to develop the skill set necessary to carry the business forward. They need the concentrated mentoring of the outgoing c.e.o. or president. Similarly, the patriarch must realize that the children may want to make changes in day-to-day operations. Change is natural, even when someone else initiates it, even by a son or daughter. The next generation needs to be allowed to take risks similar to what the senior entrepreneur took to gain his or her own competence and skill set. But watching the next generation take risks with your business takes a certain amount of lip biting. And don’t forget the post-transition problems. Now that the entrepreneur has less responsibility to the family business, and more leisure time, what will he do with the energy and time once devoted to the business? Planning retirement and leisure time may actually be necessary. A succession plan that involves both the new relay runners at the helm of the business as well as the entrepreneur’s diminishing participation can help the business transition go smoothly. Here are essential elements of a succession plan: Make continued business leadership a key goal. This can be accomplished through a series of planned meetings with family-member owners to discuss their goal, wishes and concerns.

Gather, analyze and share financial information on the company and on current owners, including ownership percentages, tax records and tax commitments, value of the business, and organizational structure. Remember that taxes may be a key factor in any transition of business. A comprehensive estate plan for any outgoing shareholder should be considered. Strive for a balance of equity. Answer these questions definitively: How many business assets will remain with the senior entrepreneur? How much will be passed onto heirs, both inside and outside the company? Work hard to clear up the major muddy area of how much parental authority will be exercised over the children. How much should the senior entrepreneur pass on to the children? How much should these children be required to earn and do for themselves? These are difficult questions that require objectivity and, therefore, generally require an outside consultant who has no emotional investment. These objective decisions must be made in the best interest of the business. Once upon a time, it was simpler. But today, with all that is at stake and all the complications of the day, it’s a wise leader who knows how to pass business responsibility to his children. When asked who should run Ford Motor Co., Henry Ford said that “asking who will run the family business is a little like asking who will sing tenor in the choir—the tenor of course.”

– James Olan Hutcheson is managing partner and founder of ReGeneration Partners, a Dallas-based family business consulting firm. Reached him at (800) 406-1112 or www.regenerationpartners.com. Reprinted with permission of ReGeneration Partners. No portion of this article may be reproduced without its permission.

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The Merchant Magazine June 2012

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June 2012 The Merchant Magazine

NAWLA LEADERSHIP CONFERENCE Photos by The Merchant Magazine

NORTH AMERICAN American Wholesale Lumber Association held its first annual leadership conference April 29-May 1 at The Broadmoor, Colorado Springs, Co. [1] Carl Lamb, Jon Anderson. [2] Michael Dunn, Aly Kingsley, Scott Elston. [3] Steven & Elizabeth Rustja, T.R. Cauthorn. [4] Dave Destiche, Mary Lou Carlson, Mark Kasper. [5] Alden Robbins, James Robbins. [6] Steve Firko, Vicki & Carl Lamb. [7] Shelley & Tom Kohlmeier, Amy & Rob Latham. [8] Chris Beveridge, Jack Chase. [9]

The Merchant Magazine June 2012

Kathy & Larry Boyts. [10] Jim Hassenstab, Rose Castan, Traci & Mike Mordell. [11] Brad Schneider, Karin Bates, Mike & Janet Phillips. [12] Bob Owens. [13] Ethel & Thomas Rice, Mary Ellen Owens. [14] Swaraj Pandey, Karen & Robert Turner. [15] David & Kimber Hutson. [16] Kent Beveridge, Andrew & Rena Goodman, Josh Goodman. [17] Jeannie Eddins, Walter Russell. [18] Sam Sanregret, Barb O’Rourke. [19] Bethany West, Doug O’Rourke. (More photos on next page) Building-Products.com

NAWLA LEADERSHIP CONFERENCE Photos by The Merchant Magazine

NAWLA LEADERSHIP (continued from previous page): [1] Gary & Karen Vitale. [2] Suzanne Hearn, Rick Ekstein. [3] Kathy & Bill Price. [4] Pam & Aaron Babcock. [5] Doug Colson, Todd Lindsey. [6] Dusty Hammack. [7] Penny Hammack, Ian & Julie McLean, Jim McGinnis. [8] John & Chris Cooper. [9] Ann & Steve Sprenger. [10] Cindy & Bill

Anderson, Amanda & Eric Anderson. [11] Steve & Barbara Boyd. [12] Linda & Barry Schneider. [13] Mary Ann & John Stockhausen. [14] Heath & Jeannine Hutchison. [15] Buck & Janie Hutchison. [16] Russ Hobbs. [17] Chuck Casey, Lt. General Russel Honoré. [18] Kevin & Lauren Ketchum.

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June 2012 The Merchant Magazine

HOO-HOO GOLF Photos by The Merchant

SOUTHERN CALIFORNIA HOO-HOO Club hosted 5th annual Don Gregson Memorial Golf Tournament May 18 at San Dimas Canyon Golf Club, San Dimas, Ca. [1] Mark Runyan, Larry Saathoff, Mike Nicholson, Scott Middaugh. [2] Kevin McLernon, Al Reed, Ted Smith, Joe DeRoest. [3] Genese Horan, Kimberly Kopsho, Myriah Horan, Betsy Bendix, Marcia Nicholson. [4] Lee Souza, Clay Hutton, Wyatt Hutton, Steven Falcone. [5] Oscar Escobar, Ron Robbins, Dan Nakauchi, Curtis Johns. [6] Hank Dickey, Chris Cottam. [7] Matt Manke, Miguel

The Merchant Magazine June 2012

Hernandez. [8] Jon Foster, Sang Pao Wang, Patrick Markwith, Tony Arce. [9] Jeff Brown, Harry Heady. [10] Jim Make, Adam Manke. [11] Ken Hansen, Scott Whitman, Danny Sosa, Garry Deatsch. [12] Jack Butler, Ryan Lauterborn, Paul Corso, John Allen. [13] Guy Hargreaves, Jay Gregson, Rob Gregson, Rick Davisson. [14] Brad Olson, Pete Meichtry. [15] Rex Klopfer, Phil Dodson. [16] Joel Lindquist, Greg Glover. (More photos on next page) Building-Products.com

HOO-HOO GOLF Photos by The Merchant

MORE HOO-HOO GOLF (continued from previous page): [1] Greg Krakar, Rudy Russ, Rich Little, Patrick Franco. [2] Peter Howe, Chris Wischmann, Won Lee, Perry Lee. [3] Fred Garcia. [4] Larry Luciano, Mitch Callaway, Kevin Witt, Dave Burnach. [5] Jim Gregson, Brett Gregson. [6] Bill Ferguson, Russ Primrose, Robyn Ueberroth. [7] Neil Wierenga, Louie Mendez. [8] David Jones, Larry Christensen. [9] Jim Sloniker, David Tait. [10] Jamie Gordon, Rick Deen. [11] Bill Young, Pat McCumber. [12] Mike Miller, Rich Geary, Marc Building-Products.com

Spitz. [13] John Henderson, Danny Andrea. [14] Rob Keyes, Steve Sadler. [15] Frank Paour, Bobby Gough. [16] Darrell Bustamante, Craig Larson, Jim Nicodemus, Dan Croker. [17] Ken Ayres, Kevin Martin, Rich Jehue. [18] John Penland, Steve Nicholson. [19] Terry Rasmussen, Scott Legros. [20] John Pasqualetto, Jim Bell. [21] J.D. Hutton, Sean Horan. [22] Fernando Verdugo, Gordon Martinez. [23] Stephen Martinez. [24] Scott Schuster. [25] Tom Foote, Joe Allotta. June 2012 The Merchant Magazine

HARDWOODS & HORSES Photos by Walter Ralston

OFF TO THE RACES: Los Angeles Hardwood Lumberman’s Club enjoyed its annual Day at the Races April 21 at the Santa Anita Racetrack, Arcadia, Ca. [1] Ed Gallagher, Lynne & Nathan Osborne, Yolanda Shewell. [2] Maria & Jerry Lapin. [3] Becky & Tim Peterman. [4] Randy Porter, Charley James, Marty Porter, Walter Ralston, Marie & Alan Oakes. [5] Tony Moyer, Jeremy Moyer, Andrew Nelson. [6] (back) Doreen Reel, Shirley Cadwell, Samantha Cadwell, (front) Charlotte Etheridge, Don Reel. [7] (back) Diane Johnston, Amy Moyer, Vickie Johnston, Tim Mathews, (front) Dennis Johnston, Emily Moyer. [8] (front) Brook Bohnhoff, Michael Bonhoff, (back) Jason Jones, Christy Jones. [9] Shelley Nelson, Megan Nelson, Sarah Nelson, Brent Smith.

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The Merchant Magazine June 2012

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LACN ON EWP Photos by The Merchant Magazine

LUMBER ASSOCIATION of California & Nevadaâ€™s 2nd Growth 40-and-under group featured [1] speaker Karyn Beebe, engineered wood specialist for APA, addressing the future of EWP at its May 3 meeting in Brea, Ca. (Left to right) Karyn Beebe, Terry Rasmussen, Chris Freeman. [2] Dan Sweeny, Jan Kirkman. [3] Mark Huff, John Pasqualetto, Troy Huff. [4] Ryan Mitchell,

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Shawn Knight, Johnny Pringle. [5] Chris Huntington, Scott Whitman. [6] Anna Ramierez. [7] Frank Bader, Randy Jackson. [8] Fia Faumuina, Gerry Perez. [9] Brian Hall, John Mayhew. [10] Grant Pearsall, Joe Allotta. [11] Matt Satterlee, Chris Johnson. [12] Jean Henning, Danny Sosa. [13] Doug Willis, Al Reed.

June 2012 The Merchant Magazine

chairman Mike Phillips, Hampton Lumber Sales, and 2nd vice chairman Rick Eckstein, Weston Forest Products. Mark Kasper, Amerhart Ltd., continues as secretary/treasurer. NAWLA is partnering with Oregon State University, Corvallis, Or., to present a Sept. 10-13 wood basics course. Classes are led by instructors from OSU’s Department of Wood Science & Engineering, College of Forestry. Students will tour Starker Forest Lands & Education Center, Philomath; Zip-o-Log Mills and Seneca Sawmill Co., Eugene, and Rosboro, Springfield.

ASSOCIATION Update

Lumber Association of California & Nevada’s 2nd Growth group will mark its 36th anniversary during its annual summer conference July 19-20 at Rancho Las Palmas Resort & Spa, Rancho Mirage, Ca. The event opens with golf and continues with an opening reception, dinner, and educational program. Day two focuses on “Industry Mentoring: Our Past, Present, and Future.”

Southern Oregon Lumbermans Association will present its annual golf tournament and BBQ July 26-27 at Rogue Valley Country Club, Medford, Or.

North American Wholesale Lumber Association elected Mike Mordell, Universal Forest Products, as its new chairman. Other new officers are 1st vice

Photos by Walter Ralston

LA HARDWOODS

Western Wood Preservers Institute will gather for its annual summer

meeting June 24-26 at Ritz-Carlton, Bachelor Gulch, Avon, Co.

LADIES FIRST: Los Angeles Hardwood Lumberman’s Club hosted its annual Ladies Night meeting & dinner May 10 at Orange Hill Restaurant, Orange, Ca. [1] Alan & Dayna Arbiso. [2] Gale & Judy Daugherty, Charlotte Etheridge, Don Reel. [3] Charley Fiala, Alana Northrup, Kit Rohn, Dan Bohannon. [4] Bill Fitzgerald, Kelsey Fitzgerald, Candice & Paul Pendergast.

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IN Memoriam

Robert J. “Bob” Mohler, 94, retired co-owner of Ontario Lumber Co., Ontario, Ca., died May 17 in Yucca Valley, Ca. A decorated Navy fighter pilot during World War II, he retired from the Navy as a full commander in 1978, after 27 years of combined active duty and reserve. He operated Ontario Lumber with his wife, Marjorie, from 1960 to 1988 and spent many years as president of the Pacific True Value Hardware Association.

Edward Louis “Eddie” Myers Jr., 66, owner/operator of Golden West Lumber, Fresno, Ca., and Fresno Lumber, Fresno, died April 15.

Solomon Lowi, 89, founder of Builders Discount, Chatsworth, Ca., died May 1 in Los Angeles, Ca. He started the business in 1954, which was one of the first large-format home centers and grew to three locations. In 1986, he sold the business to Levi Kushnir, Israel’s largest home improvement retailer. It went bankrupt in 1992, citing heavy competition from Home Depot and HomeBase.

Wallace “Wally” Hicks, 70, lumber salesman and former owner of Gold Creek Lumber, Jacksonville, Or., died May 11 in Medford, Or. After graduating from the University of California, Berkeley, in 1963, he worked as a lumber sales manager and wholesale lumber distribution salesman at Spalding & Son, Grants Pass, Or., and Weaver Forest Products, White City, Or., before forming Gold Creek in 1987.

Fred William Huling Jr., 90, co-founder and retired president of Laminated Wood Products, Ontario, Or., died April 18 in Hermiston, Or. During World War II, he served as a U.S. Army Air Corps fighter pilot in Asia.

Harold Arthur Friese, 90, retired seed manager for Weyerhaeuser Co., Tacoma, Wa., died May 9 in Grand Forks, N.D. After serving with the National Guard in Guadalcanal during World War II, he graduated from Oregon State University’s College of Forestry in 1949 and joined the U.S. Forest Service. He was hired by Weyerhaeuser in 1951, starting at its logging camp in Sutherlin, Or., and

becoming a district forester at Cottage Grove, Or. Moving to Tacoma, he served as seed manager for the U.S., designing and building equipment and plants in Arkansas, North Carolina, and Washington. He worked with the Northwest Tree Seed Council to develop a Seed Zone Map for Washington and Oregon, and in 1973 patented his own seed-cleaning machine. A member of the Puget Sound Society of American Foresters, he served four terms as president of the Northwest Seed Certification Association, one term as director of the Weyerhaeuser Credit Union, and as the company’s advisor to the Junior Achievement Association.

Emiline Marie Pivik, 84, former co-owner and bookkeeper of Teton Lumber, Wilson, Wy., died May 13 in Idaho Falls, Id., following a lengthy illness. She operated the sawmill with her husband, Joseph Pivik, and her brother-in-law, Carl Pivik, for 49 years, until they retired in 1990.

Albert William “Pete” Harper, 85, retired Spokane, Wa., district representative for the Douglas Fir Plywood Association (forerunner of APA), died May 11. A Navy veteran of World War II and the Korean War, he also served as president of the local Hoo-Hoo chapter.

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CLASSIFIED Marketplace Rates: $1.20 per word (25 word min.). Phone number counts as 1 word, address as 6. Centered copy or headline, $9 per line. Border, $9. Private box, $15. Column inch rate: $55 if art furnished “camera-ready” (advertiser sets the type), $65 if we set type. Send ad to Fax 949-8520231 or dkoenig@ building-products.com. For more info, call (949) 852-

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1990. Make checks payable to Cutler Publishing. Deadline: 18th of previous month. To reply to ads with private box numbers, send correspondence to box number shown, c/o BPD. Names of advertisers using a box number cannot be released.

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DATE Book

Listings are often submitted months in advance. Always verify dates and locations with sponsor before making plans to attend.

Forest Products Society – June 9-11, international convention, Omni Shoreham Hotel, Washington, D.C.; (608) 231-1361; www.forestprod.org.

American Architectural Manufacturers Assn. – June 10-13, summer meeting, Marriot Oak Brook Hills, Oak Brook, Il.; (847) 3035664; www.aamanet.org.

National Lawn & Garden Show –June 11-13, Embassy Suites, Frisco, Tx.; (888) 316-0226; www.nlgshow.com.

WHAT YOU WANT. WHEN YOU NEED IT. Dimension Lumber Treated Products Domestic

Timbers Green & K.D. Export

Los Angeles Hardwood Lumberman’s Club – June 14, election night, Moreno’s Mexican Restaurant, Orange, Ca.; (626) 4458556; www.lahlc.net. National Retail Federation – June 20-22, loss prevention conference & expo, Ernest N. Morial Convention Center, New Orleans, La.; (800) 673-4692; www.nrf.com.

Pacific Lumber Inspection Bureau – June 22, annual meeting, Coeur d’Alene, Id.; (253) 835-3344; www.plib.org.

Western Hardwood Association – June 22-23, annual meeting, Sunriver, Or.; (360) 835-1600; www.westernhardwood.org.

Western Wood Preservers Institute – June 24-26, summer retreat, Ritz-Carlton, Bachelor Gulch, Avon, Co.; (800) 729-9663; www.wwpinstitute.com.

Western States Roofing Contractors Association – June 24-27, convention & expo, Paris-Las Vegas Hotel & Casino, Las Vegas, Nv.; (800) 725-0333; www.wsrca.com.

PCBC – June 27-29, Moscone Center, San Francisco, Ca.; (800) 956-7469; www.pcbc.com. Mountain States Lumber & Building Material Dealers Association – July 17, WOOD Council golf tournament, Ranch Golf & Country Club, Westminster, Co.; (800) 365-0919; www.mslbmda.org.

Lumber Association of California & Nevada – July 19-20, 2nd Growth summer conference, Palm Desert, Ca.; (800) 266-4344; www.lumberassociation.org. Southern Oregon Lumbermans Association – July 26-27, 50th anniversary golf tournament & BBQ, Rogue Valley Country Club, Medford, Or.; (800) 633-5554.

Umpqua Valley Lumber Association – Aug. 2-3, Mill Week, Roseburg, Or.; aliceb@drjlumber.com.

Southern California Hoo-Hoo Club – Aug. 15, dinner & meeting, Pomona Valley Mining Co., Pomona, Ca.; (760) 324-0842; www.hoohoo117.org.

Western Wood Products Association – Aug. 15-16, summer meeting, Portland, Or.; (503) 224-3930; www.wwpa.org.

Ace Hardware Corp. – Aug. 16-18, fall market, McCormick Place South, Chicago, Il.; (630) 990-7662; www.acehardware.com.

Orgill Inc. – Aug. 16-18, dealer market, Las Vegas Convention Center, Las Vegas, Nv.; (800) 347-2860; www.orgill.com.

Remodeling & Decorating Show – Aug. 18-19, Orange County Fair & Event Center, Costa Mesa, Ca.; (818) 557-2950; www.thehomeshow.com.

International Woodworking Fair – Aug. 22-25, Georgia World Congress Center, Atlanta, Ga.; (404) 693-8333; iwfatlanta.com.

Mountain States Lumber & Building Material Dealers Association – Aug. 24, Western Slope golf tournament, Rifle Creek Golf Course, Rifle, Co.; (800) 365-0919; www.mslbmda.org.

Remodeling & Decorating Show – Aug. 24-26, South Town Expo Center, Sandy, Ut.; (818) 571-9012; www.thehomeshow.com.

National Assn. of Women in Construction – Aug. 29-Sept. 1, annual convention, Denver, Co.; (800) 552-3506; www.nawic.org.

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Manke Lumber Company is familyowned and has been serving the needs of the lumber industry since 1953. We take pride in milling and stocking quality lumber in a full range of commodity sizes and larger dimension timbers. We also answer your market needs for a wide variety of treated lumber products. Our forest products are milled from carefully harvested Northwest trees ready for distribution to you—on time and at the right price. Located in the Port of Tacoma, we have ready access to deep water shipping, rail heads or trucking terminals for longer haul loads. Manke operates its own fleet of trucks and is at your service for straight or mixed loads by truck, rail or sea. We manufacture primarily Douglas fir and western hemlock, including • 2x4 thru 2x12, Lengths 8-20’ • 3x4 thru 3x12, Lengths 8-26’ • 4x4 and wider, Lengths 8-26’ • 6x6 and wider, Lengths 8-26’ • 8x8 and wider, Lengths 8-26’ • Timber sizes up to 12x12

Manke Lumber Company Call 1-800-426-8488 1717 Marine View Dr., Tacoma, WA 98422

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www.mankelumber.com June 2012 The Merchant Magazine

IDEA File

ADVERTISERS Index

Cents-less Acts

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The owner of a Florida lumberyard has decided that pennies just aren’t worth the trouble any more. “No more pennies! For cash sales, we round in your favor,” proclaims a new sign at Shell Lumber, Miami, Fl. Owner Andy Haase instituted the change last month, after tiring of the need to account for the 1,200 pennies needed each day for the store’s 10 registers. “The bookkeepers used to come down and say your cash drawer was off by a penny,’’ said Haase. “It was just a lot of work for nothing.” The U.S. Mint, which spent $119 million last year to make $49 million worth of pennies, agrees. So does Jeff Gore, a biophysics professor at the Massachusetts Institute of Technology who advocates retiring the penny. “The penny used to be a useful coin,’’ he says. “There was a time when you could buy something with it.” But those times are past. Customers using credit cards still pay the full amount, but cash transactions are rounded up to 4¢, so no pennies change hands. During a recent visit to Shell Lumber, customer Frank Dumenigo handed over $21 for $20.84 worth of merchandise and received two dimes in return. “I have a change purse,’’ said Dumenigo, who routinely leaves pennies behind on sales counters. “If I put pennies in there, it would explode.” The Pentagon also has little use for the copper coin. In 1980, it stopped sending pennies to overseas military bases because the coins “are too heavy and are not cost effective to ship,’’ says Christopher Ward, a spokesman for the Army & Air Force Exchange Service. Military commissaries round sales totals to the nearest dime or nickel, figuring that customers will wind up even over time. Haase says the new policy could cost the store as much as $10 day—almost $5,500 a year—but will save labor costs for tracking sales down to the last penny. “We worked out the math,’’ he says. “Counting pennies was definitely worse than break even.”

Advantage Trim & Lumber [www.advantagelumber.com]..........15 Ainsworth [www.ainsworth.ca] ................................................30-31 Allweather Wood Treaters [www.allweatherwood.com] .............19

Atlantis Rail Systems [atlantisrail.com] .......................................34 Austin Hardwoods & Hardware.....................................................50

BW Creative Wood [www.bwcreativewood.com] ........................26

Cabot [www.cabotfactoryfinish.com] .............................................5 Cal Coast Wholesale Lumber ........................................................43

California Timberline [www.caltimberline.com] ............................7 C&E Lumber Co. [www.lodgepolepine.com] ...............................40 Capital [www.capital-lumber.com]..........................................13, 15

Cedar Shake & Shingle Bureau [www.cedarbureau.com]..........8A Collins Companies [www.collinswood.com] .................................3 Fontana Wholesale Lumber [fontanawholesalelumber.com].....42 Huff Lumber Co. .............................................................................29

Humboldt Redwood Co. [www.getredwood.com] .......................19

Idaho Forest Group [www.idahoforestgroup.com] ............Cover II J.M. Thomas Forest Products [www.thomasforest.com] ...........41

Keller Lumber Co............................................................................22

LP Building Products [www.lpcorp.com].......................................8 Manke Lumber Co. [www.mankelumber.com].............................45

McFarland Cascade [www.mcfarlandcascade.com] ...................35

Norman Distribution Inc. [www.normandist.com].......................37

Olympic PPG [www.Olympic.com] ...............................................25

Plycem USA [www.plycemtrim.com]..................................Cover III

Redwood Empire [www.redwoodemp.com].................................23

Reel Lumber Service [www.reellumber.com] ..............................33

Regal Custom Millwork ..................................................................33 Roseburg Forest Products [www.rfpco.com] ..............................27 Royal Pacific Industries .................................................................28

Simpson Strong-Tie [www.strongtie.com] ........................Cover IV

Swaner Hardwood Co. [www.swanerhardwood.com].................34 Swanson Group Sales Co. [www.swansongroupinc.com].........21 Taiga Building Products Inc. .........................................................24

SIGNAGE promotes lumber dealer’s new No Penny policy.

The Merchant Magazine June 2012

Thunderbolt Wood Treating [thunderboltwoodtreating.com] ......4

TruWood-Collins [www.truwoodsiding.com] ............................16A

Western Woods Inc. [www.westernwoodsinc.com]............Cover I Building-Products.com