OSB IS LOOKING UP SELLING REDWOOD & CEDAR WHAT’S NEW IN FASTENERS
THE VOICE OF THE WEST’S LBM DEALERS & DISTRIBUTORS – SINCE 1922
There’s no wood quite like redwood.
Scott Padgett, designer/builder at Padgettdesign.com.
©2010 The California Redwood Company. All rights reserved.
There’s no company quite like The California Redwood Company.
When you partner with The California Redwood Company, you’re not just getting a unique and beautiful wood product, you’re getting the experience and innovation only a company that’s been around for 120 years can bring. This year, we’re continuing with our spirit of constant improvement with the addition of two newly designed wood products, along with enhancements to our current products. We’re also launching a new marketing campaign, including a completely new website, a new identity and collateral system, and a robust in-store training program. The campaign, entitled “Build history” tells the rich story of The California Redwood Company and inspires homeowners to build something truly special — all of which translates to new and higher margin opportunities for you.
We hope you’ll call us at 1-800-637-7077 or visit californiaredwoodco.com to learn more about what a partnership with The California Redwood Company can mean. And find out if together, we can build history.
SUMMIT PROFILE — Limited Edition
MERIDIAN PROFILE — Limited Edition
Special Features 9 FEATURE STORY OPPORTUNITIES IN OSB: SIPS, PRODUCER UPDATE, MOISTURE-RESISTANT SUBFLOORING, GREEN CERTIFICATION
12 MANAGEMENT TIPS ONLINE RESOURCES FOR REDWOOD
13 INDUSTRY TRENDS WHAT’S AHEAD FOR REDWOOD?
14 PRODUCT SPOTLIGHT WESTERN CEDAR SIDING GOES GREEN
16 INDUSTRY TRENDS CHANGES IN STRUCTURAL FASTENERS
18 COMPETITIVE INTELLIGENCE WISCONSIN DEALER STAYS POSITIVE
32 OVER THE COUNTER
In Every Issue 6 TOTALLY RANDOM 20 OLSEN ON SALES 22 GREEN RETAILING 30 FAMILY BUSINESS 34 MOVERS & SHAKERS 40 KAHLE ON SALES 44 NEW PRODUCTS 49 ASSOCIATION UPDATE 51 IN MEMORIAM 52 CLASSIFIED MARKETPLACE 53 DATE BOOK 54 IDEA FILE 54 ADVERTISERS INDEX
Volume 89 Number 3
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The Merchant Magazine September 2010
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TOTALLY Random By Alan Oakes
Do you know how to drive the people who drive your business?
WAS 16 YEARS OLD and needed to earn money to pay for those Saturday nights out on the town. So I found my first real paid job selling clothes every Saturday at a local men’s store. And I loved it! Apart from the great discounts on the clothes—meaning I never earned anything at the end of the day—I enjoyed the banter with the men and even more with their girlfriends. But the biggest thrill was making the sale. When the summer recess came, I started working there full-time. I discovered I loved selling. Three years later, after dropping out of college and working in accounting, finance and banking, I realized I would never enjoy office life or earn enough money to fulfill all my dreams—including my short-term goal of affording a car. So I went into real selling, where I knew I could earn better money and, most importantly, a company car. I started in the U.K. with a large U.S. FMCG (fast moving consumer goods) company and enjoyed the travel, the chase, the sale, and, of course, the car. In fact, I think my second sales job decision was based on getting a better car! But the reality is that for many of us in selling, we never planned it—it just happened. We may have even seen it as a stop-gap measure till something better came along. Yet somehow many of us find ourselves still in it 20, 30 years down the road. If successful, little else offers the same thrill and same financial rewards. When those commissions start hitting and we see our lifestyles, needs and egos grow bigger, it’s hard to walk away. In fact, if we are good, we don’t want to do anything else. We may hate having to pander for a sale, but even if we have been fired for missing a target or two, we still expect ourselves to be motivated and as bright as a button after that fifteenth “No” of the day. Whatever we end up doing, we always need to know how to sell. Even in my c.e.o. jobs, I couldn’t wait to get out into the field with those who drove the success of my companies. And there lies the rub. Too many companies fail to recognize that their company lives or dies by the talent in their sales force. They see sales as that necessary evil, the ones constantly complaining, lacking humility, and always asking for more. They do not realize what the sales force deals with day in and day out, especially in these times. Try getting a “No” every call, try sounding as positive at 4 p.m. as at 8 a.m., try working on a new account for a year and then losing it to issues outside of your control, try dealing with irate customers whose orders were botched, etc., etc. Inside and outside rarely see eye to eye. You ask sales to toe the line, yet think outside the box. You tell them it can’t be done, yet expect them to find a way to make it happen. You say you’ll work on it when you have time, yet demand they get the deal done now. Yes, we may be demanding, poor at paperwork, averse to playing by the rules or toeing the company line or caring about your problems. But it’s that same spirit that makes us successful salespeople. We sell—and get rejected for—who we are. Some of us take it personally. Others let it roll of their backs and move on to the next success. We build networks, we answer to our customers often more than to our own company, we face everchanging targets, and our jobs are on the line more than any other position in the company. Last quarter’s sales are but a faded memory by the end of the next quarter. What most inside don’t understand is that it is our success or failure that keeps everyone else’s job going or not. And we carry that burden each and every day. We shouldn’t be taken for granted or have our budgets changed just to avoid paying bonuses. Our opinions, gleaned from being on the ground every day, should be listened to. Respect our role and don’t see us as demanding, overbearing and dumber than doorknobs. Don’t force us to do dishonorable things or cram product down customer’s throats. Understand what your decisions will mean to your customers. Management needs to be accountable just as it expects us to be. Our role is to understand the needs of our customers, find a solution at a price the customer will accept, walk the order through the system, face up when things go wrong, and solve problems often not of our own making. We sell one order at a time with no guarantee of a future order, particularly if we don’t get it right. And, yes, your customers are my customers. We all suffer the same consequences of success and failure.
Alan Oakes, Publisher email@example.com
The Merchant Magazine September 2010
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FEATURE Story Opportunities in OSB
Opportunities in OSB
Structural insulated panel sales hold up
ESPITE FOUR YEARS of declining U.S. housing starts, the structural insulated panel (SIP) industry—a top consumer of OSB—has avoided the full force of the recession, according to a recent survey by the Structural Insulated Panel Association. Results indicate that the industry experienced a modest 12% decrease in residential production volume in 2009, compared to a 28% drop in U.S. single-family housing starts over the same time period. 2009 is the fifth consecutive year the industry has gained share in the residential market. It is now estimated that the panelized building system accounts for between 1% and 2% of U.S. single-family home starts. SIPA executive director Bill Wachtler attributes much of the industry’s growth to the increasing popularity of green and energyefficient homes. SIPs are composed of insulating foam sandwiched between two structural facings, creating an effective thermal barrier that can save homeowners up to 50% on heating and cooling costs. “The rising cost of energy and concern over global climate change has really pushed green building into the mainstream,” said Wachtler. “SIPs give architects and builders an easy way to create an airtight building envelope that will improve the energy efficiency and durability of any home or light commercial building.” Of the total 42 million sq. ft. of SIPs produced in North America in 2009, 43% went to residential buildings, 32% to non-residential buildings, and the remaining 24% were used for non-building purposes, such as industrial coolers. An estimated 1,300 commercial buildings were constructed with SIPs in 2009, including schools, retail stores, and
agricultural buildings. Non-residential production declined 19% from the previous year. “Like all industries, we are affected by the recession and the drop in new construction,” said Wachtler. “But the strong marketshare gains we’ve experienced in the residential market indicate that the SIP industry is likely to see a significant boost in production as the economy recovers.” Several different combinations of materials are used to construct SIPs, but the basic concept remains the same. By far, the most popular facing materials are OSB and metal. Plywood and other materials such as fiber cement board account for only 6% of SIPs used in building applications. The top regions for SIP use are the Mountain, East North Central (upper Midwest), and Pacific regions.
LOUISIANA-PACIFIC, Nashville, Tn., enjoyed a spike in OSB prices in the spring, as second-quarter 2010 OSB sales jumped 122% to $217 million. LP has eight OSB plants running and two idled. “The U.S. economy remains in an unsettled state that requires companies to be extremely agile to respond to wide swings in demand,” said c.e.o. Rick Frost. “I believe we’ll see an erratic path for the rest of 2010 and into next year.” NORBORD, Toronto, Ont., also saw second-quarter profits rise—to $37 million vs. an $18-million loss a year earlier. The boom persuaded Norbord to run its nine North American OSB mills ran at 100% of capacity, compared to 85% in the first quarter. “Economic news continues to be mixed; however, a housing recovery is taking hold and we remain confident that our financial performance will continue to improve on the prior year,” said c.e.o. Barrie Shineton. WEYERHAEUSER, Federal Way, Wa., has been operating five OSB mills this year, though this month it will restart its plant in Hudson Bay, Sk., after a two-year break. “The Hudson Bay OSB mill is important to our OSB system, and we expect its resumed operation will help us optimize production across our facilities as the market recovers,” said Cathy Slater, v.p., iLevel Engineered Wood Products. Hudson Bay’s annual capacity is 550 million sq. ft., though volume will be limited in 2010. September 2010 The Merchant Magazine
Opportunities in OSB
Tapered-edge subflooring offsets moisture exposure
SB PRODUCER Ainsworth has introduced an engineered subfloor solution that utilizes a unique technology to accommodate the effects of swelling due to moisture exposure. New PointSIX Flooring features a patented taperededge technology whereby a thin layer of the highly compressed fiber along all four edges of the OSB panel is milled off, removing the part of the subfloor that’s most prone to swelling. PointSIX takes its name from research results indicating a .6mm taper depth to be the most effective in reducing edge swell. The engineered solution was developed over five years of extensive research and testing, in which PointSIX was subjected to repeated wet and dry cycles to simulate severe, wet jobsite conditions. In one rigorous test, the engineered panel was flooded for 14 days. After drying out, the average edge swell was contained to 0.01 inch, not much more than a sheet of paper. The taper on PointSIX is almost imperceptible, and it’s a dimension that won’t require sanding. With moisture, the wood fibers expand to essentially “fill up to flush” the micro-taper. If no moisture contacts the engineered subfloor, it does not require any filler or mastic. APAapproved for structural integrity, PointSIX features a precise tongue-and-groove profile for a secure fit. “Builders recognize what many manufacturers are reluctant to admit: wood swells when it gets wet,” commented Robert Fouquet, v.p.-marketing & sales for Ainsworth. “We’ve brought an entirely new approach to solving the problem before the subfloor gets to the job site, by engineering the panel to accommodate moisture.” The idea for PointSIX came from Steve Bailey, technical manager at Ainsworth’s OSB mill in Barwick, Ontario.
AINSWORTH, Vancouver, B.C., was encouraged by rising OSB prices in the first half of the year to increase production at its facilites in 100 Mile House, B.C.; Grande Prairie, Alb., and Barwick, Ont. , As demand increases, Ainsworth is poised to add another 1.1 billion sq. ft. to its current operating capacity of 1.6 billion sq. ft., by adding a second production line at Grande Prairie and restarting its idled facility, co-owned with bankrupt Grant Forest Products, in High Level, Alb. 10
The Merchant Magazine September 2010
“I suddenly had this epiphany: that by shaving a slight taper off the panel edge, we could avoid the problems associated with edge swell,” Bailey explained. The solution at first seemed too simple to be effective, but research, trials and field tests proved it to be a viable solution. “The big question we’ve had from builders is, ‘Why hasn’t someone thought of this before?’” said Bailey. According to Fouquet, PointSIX products will be priced competitively, with no additional cost for the new technology. “We believe that every builder should be able to expect subfloor that offsets the effects of moisture without paying a premium,” said Fouquet. For the premium level PointSIX Durastrand Flooring, suitable for high-end projects such as custom homes, Ainsworth offers a lifetime limited warranty against delamination and a 180-day no-sand guarantee. For Ainsworth’s standard PointSIX Flooring, it’s a 25-year limited warranty. Other OSB manufacturers have also tried to improve moisture resistance in their subflooring products. Louisiana-Pacific recently introduced two premium subflooring products with higher levels of waxes and resins to resist edge swell. LP TopNotch 350 series offers a 100-day no-sand warranty, the 450 series a 200-day no-sand warranty. Norbord has long produced a premium OSB subfloor, Stabledge, and now has a mid-priced offering, Pinnacle, and a reformulated commodity product, TruFlor. Building-Products.com
Opportunities in OSB
OSB manufacturers show off their green side
tion with energy savings by transforming their panels into radiant barriers, including L-P’s TechShield, Ainsworth’s Thermastrand, Weyerhaeuser’s Structurwood, Norbord’s SolarBoard, G-P’s Thermostat, Langboard’s EnergyLock, and RoyOMartin’s Eclipse and WeatherGuard (which doubles as a vapor barrier).
HETHER IT’S TO BULK UP their green image or to uncover more ways to rack up LEED points, builders are searching for environmentally-approved versions of construction materials, and OSB makers are answering the call. Environmental certification is a natural for OSB, since manufacturers have long contended that their products held green advantages over plywood because OSB can be produced from smaller trees and cuts down on waste. The majority of North American OSB producers now offer third-party certification. OSB from Louisiana-Pacific, Georgia-Pacific, iLevel by Weyerhaeuser, Norbord, and Huber Engineered Woods is certified by the Sustainable Forestry Initiative. Tolko products are certified to Canadian Standards Association and Environmental Management System ISO standards. Buyers can also pay a premium for OSB subflooring that’s Forest Stewardship Council certified—from Norbord, RoyOMartin, and G-P (thanks to its purchase of Grant Forest Products’ mill in Englehart, Ont.). “When it comes to being ‘green,’ we pride ourselves on listening to our customers and strategically aligning our timber base and manufacturing processes with the customer’s request for environmentally responsible building products,” said Bobby Byrd, OSB sales manager for RoyOMartin. “Our decision to become FSC certified in 2001 proved to be a sound one, both for the environment and consumers.” G-P’s DryGuard and Huber’s AdvanTech subfloor also carry the NAHB Green Approved label, and the latter is also ESR certified. Additionally, producers have upgraded OSB’s associa-
G EORGIA -P ACIFIC , Atlanta, Ga., expanded its OSB offerings to include oversized and FSC-certified panels with its acquistion of Grant’s OSB plants in Englehart and Earlton, Ont., and Allendale and Clarendon, S.C. G-P already operated six other OSB mills, although its facility in Mount Hope, W.V., is slated for closure Oct. 1. Plant manager Neil Belt blamed “current market conditions. It remains unclear as to when the facility will reopen or whether it will reopen at all.”
HUBER ENGINEERED WOODS, Charlotte, N.C., continues operating five OSB mills from the Southeast to Maine.
ROYOMARTIN, Alexandria, La., continues expanding the capabilities of its three-year-old facility in Oakdale, La., including formulating its 7/16” OSB to carry four different APA gradestamps. “Our customers ask us how to drive their inventory costs down,” said OSB sales manager Bobby Byrd. “We respond with products that can perform multiple tasks, thus reducing inventory costs by having to inventory one item versus four.” Its OSB structural panels also have received third-party verification from the Reflective Insulation Manufacturers Association International. TOLKO, Vernon, B.C., returned to full production in January at its plant in Meadow Lake, Sk., which was damaged by a late 2009 fire. Its other OSB mills remain mothballed. LANGBOARD produces OSB at its plant in Quitman, Ga.
GRANT FOREST PRODUCTS, Englehart, Ont., sold four of its facilities to G-P after filing for bankruptcy protection. At least two groups of investors have expressed interest in Grants’ mill in Timmons, Ont., but it would take $35-40 million to get it running again. September 2010 The Merchant Magazine
MANAGEMENT Tips Marketing Resources for Redwood
Redwood grows its web resource
HE CALIFORNIA REDWOOD Association has added a new video to its website to help retailers and consumers understand the green attributes of redwood decking. The newest addition to the site is consistent with CRA’s plan to better educate consumers and retailers on the environmental advantages of choosing redwood. “We launched a revamped website in June with the goal of providing retailers and consumers with a more valuable, easy-to-use reference for all things redwood,” says Bob Mion, CRA’s marketing director. “We put a new framework in place with the expectation that the site would grow.” CRA’s newest video is a slight departure from the video content already on the site. The new-look site features “how-to” videos designed to accompany downloadable project plans, with contractor Jeff Imwalle demonstrating proper construction techniques. The latest video, Redwood for Green Living, runs about four minutes and is meant to help consumers considering a decking purchase. “Consumers have questions about what it means to be
REVAMPED WEBSITE from California Redwood Association stresses the green attributes of redwood.
The Merchant Magazine September 2010
green,” says Mion. “We want retailers and consumers to understand there is a wealth of science behind the assertion that choosing redwood is an environmentally friendly choice, and this video presents key findings in just a few minutes. The video elaborates on the green attributes of redwood beyond the advantages of redwood being a renewable, sustainable resource.” New studies have shown that naturally durable wood products offer significant environmental benefits compared to manufactured composites, particularly with regards to energy and greenhouse gas emissions. Because most of the energy used to produce redwood comes from the sun, whereas most of the energy used to produce composite decking comes from burning fossil fuels, choosing redwood can lower a consumer’s carbon footprint. In fact, because redwood is half carbon by weight, a redwood deck can actually store more carbon than is released to the atmosphere during the entire manufacturing and transportation process. “When you store more carbon than you release during manufacture, you have a positive overall affect on greenhouse gas emissions,” notes Mion. “The typical redwood deck can store more than a half ton of carbon.” In another effort designed to add retailer value, CRA has updated its award-winning sales-training course and cut the enrollment fees. Redwood Basics for Sales & Marketing, a self-paced correspondence course proven in the field for more than a dozen years, provides valuable training on all aspects related to selling redwood. The course addresses topics ranging from what grades are appropriate for certain applications to details on redwood chemistry, finishing tips, sustainable forestry certification, and more. The enrollment fee has been reduced to $100 per student. For more information or to sign up for the course, contact Anita MacKusick at (925) 935-1499 or email@example.com. “It’s important that everyone in the supply chain be able to articulate the environmental benefits of choosing redwood,” Mion says. “Retailers are encouraged to download materials from our site and share them with customers, and to establish links from their website to ours. We’re committed to making our website a valuable tool to help drive sales.” Building-Products.com
INDUSTRY Trends By Carl Shoenhofer, The California Redwood Co.
What’s ahead for redwood?
the past decade has proven to be one of the most challenging business environments that the redwood industry has ever faced. In addition to the headwinds created by the recent economic downturn, redwood products have faced increasing competition from composite offerings that have challenged its leadership position in key markets. These challenges have forced the industry to reevaluate its market position and create new strategies for remaining competitive in an increasingly crowded market. Despite the inroads made by composites in the marketplace, natural wood still represents the lion’s share of all decking materials (with approximately 80% of the total market, primarily southern yellow pine). Redwood occupies a premium, niche segment of the total decking industry, with an approximate market share of 17% west of the Rockies. Due to the economic pressures of the downturn, it is likely that the industry will experience consolidation within distribution and manufacturing. Several key consumer trends are affecting the markets that redwood producers serve. Changing consumer needs in the outdoor living segment have created an environment in which consumers are much more careful in their purchasing decisions. Due to economic uncertainty and decreasing home equity, consumers are more price-sensitive and more likely to stay close to home. With approximately one-quarter of homeowners facing a situation where they are “underwater” in their mortgages, many consumers are choosing to upgrade their current homes to make them more livable, instead of buying a new home. One of the most popular upgrades to achieve this objective is the addition of a deck or outdoor living space (approximately 82% of all homeowners desire an outBuilding-Products.com
door living space to share with friends and family). The segment’s growth has been focused primarily on smaller and less expensive projects than we witnessed during the housing boom. How is redwood performing in these market conditions? Dealers report that redwood is in a “sweet spot” due to its superior performance, natural beauty, and excellent price position. Consumers who have navigated to “new” materials have come back to revisit redwood. It is certain that this has been partially price-driven (redwood is consistently less expensive than composite material, for example), but we also hear that consumers are coming back to redwood because it is a “tried and trued” material they can trust. Research also consistently shows that redwood is perceived to be the most beautiful outdoor lifestyle material. Although consumers are price-sensitive, they still care very much about the aesthetic value of their outdoor living projects. Contractors report that redwood is increasingly popular in their projects because it can help create customized outdoor living spaces at an incredible value relative to other options. Greg Vorce, Vorce Construction, Chula Vista, Ca., sums it up best: “As a third-generation craftsman, I learned the benefits of redwood at an early
Photo by The California Redwood Co.
ITHOUT A DOUBT ,
age: beautiful grain patterns, easy to work with, and long lasting. Redwood is my first choice for all exterior decking projects.” Even given the momentum that redwood is experiencing in the marketplace, how will the industry remain competitive in the future? The redwood industry cannot rest on its laurels and assume that the material will “sell itself.” In order to successfully compete in a crowded market, redwood will have to continually improve and innovate its product offerings, product quality, and marketing communications. The industry will also have to create value-added support for its distributors, retailers, and contractors. Marketing campaigns must better communicate to consumers the benefits of redwood and support our channel partners more effectively. And, finally, our industry must begin to effectively communicate our forest stewardship practices and the fact that natural redwood products are the truly sustainable and renewable material for outdoor living spaces. If we are successful, redwood will retain its legacy as a leader in the outdoor living category for years to come.
– Carl Schoenhofer is vice president and general manager of The California Redwood Co., Arcata, Ca., (707) 2683000; www.californiaredwoodco.com.
September 2010 The Merchant Magazine
PRODUCT Spotlight Western Red Cedar Siding
Siding with green
as beautiful, durable and sustainable. Materials that offer all three qualities provide the most value—especially when it comes to siding. Exteriors make both that all-important initial impression and figure heavily in environmental impact. Wood meets all three style criteria. Independent research verifies wood’s green credentials. A life cycle assessment performed by FPInnovations-Forintek, Canada’s leading forestry research laboratory, found western red cedar to be the “most sustainable building material.” The study took a cradle-to-grave look at environmental impacts of various building materials, comparing residential siding applications such as WRC, brick, fiber cement, and vinyl. Complex analysis considered such factors as resource use, water use, energy use, transportation and waste created. WRC fared best overall among siding choices. It was found to create lower greenhouse gas emissions and allow for recycling and energy recovery opportunities that cut methane gas emissions in landfills. Alternative building materials, often lauded for durability, create more environmental life cycle burden than wood, according to the study commissioned by the Western Red Cedar Lumber Association. “As green building regulations become the standard in building, consumers who previously favored more ‘maintenance-free’ materials as their siding products of choice will need to consider alternatives such as western red cedar to help lessen their environmental footprint,” said green consultant John Wagner.
Photo by Western Red Cedar Lumber Assn.
TYLISH HAS BEEN REDEFINED
WESTERN RED CEDAR siding offers the top three qualities sought in a building material—beauty, durability and environmental friendliness
The Merchant Magazine September 2010
Outdoor apparel retailer Columbia Sportswear places a premium on high design, function and sustainability when selecting materials for its stores. The Portland, Or.-based company selected WRC exterior siding for a new Seattle store and a remodeled flagship store because of the wood’s aesthetic and environmental appeal. WRC also contributed warmth, longevity and character as one of the more prominent sustainable materials of the Margarido House in Oakland, Ca.—the first home in the country to receive LEED-H certification and a GreenPoint rating from the state. Cedar’s performance and maintenance record is also strong, so the choice to finish a WRC project is up to the project owner. WRC can weather naturally or, with the application of a protective coating to ensure maximum performance, retain the natural beauty of the wood, or enhance those good looks by applying coatings in an array of colors. A factory-applied primer and/or top coat keeps cedar’s long-lasting good looks and ensures optimum performance. Some applicators offer long-term warranty programs. Factory priming is performed in an industrial setting where a machine applies a coating to all six sides of each board. Coated boards are dried prior to shipment to the job site. Pre-primed siding and trim delivered to a job site should be kept dry and clean prior to installation. All field cuts should be resealed with a primer prior to the boards being installed. Top coating should be completed as quickly as possible, as most primers are not intended to be exposed to natural weathering for more than 90 days. Factory finishing is similar to the above process; however, it allows for the additional application of one or two topcoats of acrylic latex paint, solid stains, or natural stains in job lot quantities and in the colors selected by the builder or homeowner. A beautiful example of a well-finished home—Hillside House in Mill Valley, Ca.—marries high design and high sustainability in an elegant natural wood exterior. Wrapped in the reddish hues of WRC siding, the house is the first LEED-for-Homes Platinum custom home in Marin County and one of only a handful in Northern California. “An important part of minimizing the impact of a project involves selecting products, like western red cedar, that minimize the carbon footprint from manufacture to end use,” said Mike McDonald, owner of McDonald Construction & Development, the green builder that constructed the home. Recent history suggests consumers will continue to push for the best design and most sustainable materials, while architects work to balance those needs in what some are calling “eco chic.” Durability will always be important to builders. Natural wood siding offers the whole package. Building-Products.com
INDUSTRY Trends By Bill Tucker, Simpson Strong-Tie
Structural fasteners turn on changes in building materials
EALERS MUST KEEP UP on the latest construction trends in order to provide customers with the right fastener for the right building material and ensure the best home building package. Fastener companies can assist dealers and builders to make sure they are educated about the factors that impact proper fastener installation.
Structural Screws for Laminated Materials
More diverse building materials are entering the marketplace, and fastener companies have been charged with keeping up with these new materials. Glue-laminated beams (glulam, LVL) are a good example. They’re engineered in several different sizes for a wide range of load capacities and applications. Traditional, old-style lag screws do not have the performance
requirements that are needed with today’s engineered building products. To handle the load capacity of these building materials, a larger diameter fastener is required. Installation of traditional lag screws in glulam materials also poses a challenge. The correct way to install a traditional lag screw is to drill a pilot hole for the thread length and an oversize clearance hole for the shank of the fastener. This practice is very time consuming and costly. Couple that with the need for larger fasteners and you’ve spent a lot more money on the job. To address the problem, manufacturers are creating fasteners for engineered building products with safety, load capacity, corrosion resistance, and speed of installation in mind. These new structural wood screws are designed for a variety of wood-towood applications and feature special thread and point styles that in most cases reduce installation torque, make driving fasteners easier and predrilling unnecessary, and minimize wood splitting—while still meeting the requirements of the building.
Structural Screws for Use with Metal Connectors
STRONG-DRIVE SD structural-connector screws have been tested and approved for use with many popular Strong-Tie connectors.
In some structural connector applications, screws have been developed to replace nails. For example, in tight spaces or overhead applications, screws are much easier and more convenient to install then standard structural connector nails. New structuralconnector screws feature an optimalsize shank that is specifically designed to match fastener holes in connectors. The fasteners’ material also mimics the bend and yield of a connector nail, achieving the appropriate load values needed with metal connectors.
The Merchant Magazine September 2010
STRONG-DRIVE SDW structural wood screws are code-listed to fasten multi-ply truss and engineered-wood assemblies.
New coatings are now available that exceed the standards of hot-dip galvanized fasteners. It is important that building inspectors and others get up to speed on these new coatings in order to determine if the coating has enough microns of plating to match or exceed hot-dip galvanizing. The education of builders, contractors, inspectors, code officials, and homeowners will continue to be the key to fastener growth and innovation. The best way for dealers to encourage customers to upgrade to better fasteners is to educate them about the products, their choices, and the results of those choices. Since fasteners are such a small cost of the overall project, it always pays to specify and buy the proper fastener for the job.
– Bill Tucker is a fastener project manager with Simpson Strong-Tie. He can be reached at firstname.lastname@example.org. Building-Products.com
COMPETITIVE Intelligence By Carla Waldemar
Thinking positive pays off
IMING IS EVERYTHING. That’s both the good news and the bad news in this desolate economy if you’ve been dreaming of adding another yard. Time to turn lemons into lemonade? A year ago, when things were at their bleakest, Dennison Lumber, of rural Northeast Wisconsin, took the
plunge. They anted up for real estate they’d had their eye on, then built a new store in Shawano, 30 miles and 30 minutes from Dennison’s original yard, operating in Clintonville since 1981. The new store is different, explains co-manager Cody Bessette. And that’s
WISCONSIN’S Dennison’s Retail Lumber owner Rod Dennison—with manager Cody Bessette at his side—cuts the ribbon (above) for his new store, which (below) was designed to resemble a log cabin so it fits into the vacation home community.
The Merchant Magazine September 2010
what made it a now-or-never opportunity. “Our original store is in the middle of nowhere,” he admits, where only its contractor base can find it. In Shawano, owner Rod Dennison purchased the name and inventory of longstanding Retail Lumber, with its established retail following, then proceeded to erect a brand new 18,000sq. ft. store from scratch. In a mere four months. And in the midst of a deadly Wisconsin winter. Says Cody, laughing now that it’s done and over, “It was a challenge! We built it between November 1, 2008, and April 1 last year. For the size, a big, big task. Besides, we got hit with winter snow daily, so we’d spend the mornings shoveling it, then work all afternoon—and start over the next morning.” But back to our original premise: If timing is everything, then—why now? “It was a good decision,” he submits. “We got better prices by building in 2009; the price of lumber was down. Plus, we were able to negotiate deals with vendors and manufacturers, who needed to move inventory.” To sweeten the pot even further, idle contractor customers were delighted to pitch in on the project—and likely to return the business as an uptick gains momentum. In the new building, they and their homeowner customers now have a showroom to visit, which already is driving business upward as planned, Cody reports. “Before, they had to order something from a catalog, but people want to touch and feel, not buy something out of a book. It’s helped us big-time,” he testifies. “Sales are up in all those departments,” thanks to the new kitchen design center and display areas for windows. “We’re adding flooring, too,” he says. Building-Products.com
RICH WOODSY feel carries through from the exterior, straight through the sales floor and right to the central sales counter.
Plumbing and electrical SKUs have mushroomed as well. Hardware also has multiplied, and by strategic planning: “There’s an existing hardware store in town, so finally we can compete with them. And if we don’t carry something,” he adds, “we’ll get it for you.” And they’ll deliver it. Thanks to the 19-strong staff of experienced employees Dennison inherited, “we go the extra mile. We answer homeowners’ questions and walk folks through their projects—something the boxes” in nearby Wausau and Green Bay “can’t hope to offer. We try to beat them on service,” Cody explains. “People shop them once, then come back to us. They weren’t happy.” Having two stores now allows for greater buying power. And inventory can quickly be shifted between locations when needed. “Plus, we’re a member of a nine-yard buying group,” Cody adds. The Clintonville store, which serves contractors, also offers a forklift to rent. Contractors love the new Shawano store, too. It was designed to include a special area where they can enjoy free coffee and doughnuts while their orders are being filled, as well as a second-story conference room. Cody uses this space to host a variety of the classes these pros need to keep up their accreditation in the state’s builders association—sessions on lead paint safety, trusses and engineered wood, housewrap and other new products—“another new service to gain and retain a builder’s business,” Cody explains. “When a contractor is successful, that makes us successful,” this savvy manager knows full well. In the months to come, he plans to host additional contractor events, such as cookouts. He encourages his own staff to sit in on these sessions, too, when duties allow. They’re otherwise mentored on the job by Dennison’s veteran outside sales and counter personnel. “We care about our co-workers just as much as our customers,” Cody notes. “That’s why they stick with us.” He’s proven himself to be a smart and passionate manBuilding-Products.com
ager—one to the manner born, all right, but not exactly to the industry. Until hired at Shawano, the young man had worked in the automotive field. But, as he himself underscores, “You can teach product knowledge, but you can’t teach customer service,” an area in which he clearly knows how to shine. New business comes Dennison’s way thanks to its outside sales crew. “It’s a small, tight community,” explains their boss, “so you know what’s going on. We don’t go out scouting building permits. I’m not a believer in that; by then, it’s usually too late.” While contractor business is bigger in dollar amounts, percentage-wise the new Shawano store draws more retail customers. And, while few new homes are going up in this hard-hit area (its interior door plant went into bankruptcy, throwing many town folks out of work, but hopes are for a restructuring), homeowners are working on smaller projects—maybe replacing windows or doors. “Even during this struggle, there’s remodeling going on,” Cody notes, pointing to nearby summer cabins in this vacation mecca, for which the new Shawano store— designed to resemble a log cabin itself—is ideally located. “We’re very visible from the highway, so we’ll get ’em coming or going. And they still seem to have money to spend!” So, even during this slowdown, “sales have increased in most departments, especially our new ones. Now,” he boasts, “we can compete!” Carla Waldemar email@example.com September 2010 The Merchant Magazine
OLSEN On Sales By James Olsen
Sales is not for everyone
RIENDLY, OUTGOING AND DRIVEN
people make the best salespeople. The order is not that important, but if one of these traits is missing, we will have a struggling seller in our future. Companies waste millions of dollars every year hiring people who have very little chance of success in sales. Below are methods we can use to start with a “better piece of clay.”
1. Write a good ad. What kind of person are we trying to attract? We should not write the same ad for an accountant as for a salesperson. Ernest Shackleton’s Arctic exploration ad: MEN WANTED FOR HAZARDOUS JOURNEY, SMALL WAGES, BITTER COLD , LONG MONTHS OF COMPLETE DARKNESS , CONSTANT DANGER , SAFE RETURN DOUBTFUL , HONOR AND RECOGNITION IN CASE OF SUCCESS.
What kind of people answered this ad?
2. Screen applicants by phone. The salesperson who says (s)he can only sell face-to-face is not a complete salesperson. If they can’t convince you over the phone, how will they get appointments?
3. Reality Sales Training. Have an outside professional interview new hires before you pull the trigger. We interview potential hires for our customers.
4. Go deep. Ask about grade school, high school, jobs, and friends. Is this person social? Do they have the support of their parents? How young were they when they started accomplishing things? Did they show initiative early or did their parents pave the way for them?
5. Ask situational ethics questions with no right or wrong answer: “Your customer tells you they will give you the order if you can ship it in two weeks. You know that what you have is going to ship in three. What do you do?” Our applicants answer will give us a real idea about them, how aggressive they are, etc.
6. Tell them no. Sometime towards the end of the interview, say something like, “Steve, you seem like a great guy, but I don’t think you are cut out for sales the way we do it.” If they cannot or will not overcome this objection, how will they overcome objections from customers? 7. Beware of the friendly interview. Being likeable is a great tool for the salesperson, but they must be able to take the friction that comes with the job. Friendly salespeople who can overcome objections will be great salespeople.
The Merchant Magazine September 2010
Those who want to be liked more than they want to grow their business will not make you money and will be difficult to fire.
8. Read two books: Top Grading for Sales by Bradford Smart and Greg Alexander and The Ultimate Sales Machine by Chet Holmes. Both have developed “systems” for hiring salespeople. Both are short and very specific about the steps. 9. Put the potential hire in front of a committee. In addition to getting buy-in from our current sales team, questions coming from different mind-sets are a great test. We are also able to observe our potential hire more freely than we would be able to in a one-on-one interview.
10. Dig in on the details of their resume. Drill all-theway-down on the sales question. Many applicants say they were in sales when they were only involved with the sales process. 11. Ask about best/worst order. Great sellers will give a lot of detail and will show emotion as they tell the story. Journeymen salespeople will give less. An applicant’s answers will tell us how developed a salesperson we have in front of us. Beware the excuse maker! 12. Test the personal. Caliper Inc. has an affordable personality test for evaluating possible hires.
13. Don’t be the “college transition” job. The best salespeople are the ones who have already sold or are already selling. These people are looking to better their career, not just land a job.
14. Family, children, mortgages and consumer goods. People who have, like and want these things are good salespeople. We don’t want to hire a bohemian minimalist to sell for us. We want people who are selfmotivated to make money. If we have to motivate, we are lost before we begin. Building a sales team is a long-term project. Hiring the wrong salesperson will derail our growth efforts more than any other thing we do. The best time to solve the struggling, non-profitable salesperson problem is before it happens. James Olsen Reality Sales Training (503) 544-3572 james@reality- salestraining.com
The future of the lumber business is in good hands
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September 2010 The Merchant Magazine
Ace Hardware at Cornerstar has been opened in Aurora, Co., by Ted and Kristy Schenderlein.
Three-unit Mitchell Hardware will add a second Bend, Or., Ace Hardware in the spring.
Western Building Solutions negotiated a onethird rent reduction with the city of Aspen, Co., to allow continued operation of its local Harbert Lumber yard. The deal will save the yard $1.26 million over the threeyear lease.
Scarborough Ace Hardware, Scotts Valley, Ca., is expanding by annexing the vacated storefront next door. More floor space allows for larger hardware and barbecue sections, an expanded nuts-and-bolts room, and the addition of garden and patio furniture. Discount Windows & Doors added a showroom
in Kaneohe (Oahu), Hi.
Lowe’s opened a 94,000-sq. ft. home center Aug. 20 in Los Lunas, N.M. (Walter Cordova, mgr.); has started construction of a 140,000-sq. ft. store with 25,000-sq. ft. garden center in Sonora, Ca., and got the go-ahead to proceed with a 153,974-sq. ft. store in Carlsbad, Ca. Home Depot continues fighting for final approval of its proposed store in Grants Pass, Or.
Swanson Closing Glendale Sawmill
Swanson Group, Glendale, Or., is idling its flasgship sawmill in Glendale once current log inventories are depleted and is slashing production at its Roseburg, Or., mill by two-thirds, resulting in 90 layoffs. “Unfortunately, we are seeing no positive signs in the U.S. housing market, U.S.-Canada trade relations, or federal timber supply, which have made today’s decision a harsh reality,” said president Steve Swanson. Although the duration of the Glendale closure is listed as “indefinite,” Swanson fears it may never be restarted, even when the economy rebounds. The mill historically has relied on Bureau of Land Management sales for its logs, but environmental litigation and changing priorities at BLM under the Obama Administration have reduced federal timber supplies to less than 4% of the mill’s needs. The Roseburg plant will trim its operating hours from 60 a week to about 20. Swanson continues to run sawmills in Springfield and Noti, Or.
Peninsula Yards Consolidate
Lumber Traders, Port Angeles, Wa., has closed its design showroom, The Showcase, and hardscape and masonry yard, The Quarry, transferring product lines and staff to its local lumberyards. The Quarry’s materials and window specialist Donna Hoyt moved Aug. 31 to Hartnagel Building Supply. The Showcase’s windows, doors, cabinetry and other lines are now at Angeles Millwork & Lumber Co., along with contractor salesman Mike Blodgett. Former owners and trustees Arnold and Debbie
WE SAW THIS STORM COMING. AND ENGINEERED FOR IT YEARS AGO.
Cost more? No. Work better? Yes. End of story.
Schouten have rejoined Lumber Traders as board members and, respectively, interim c.e.o. and interim c.f.o. “Closing The Showcase and The Quarry is a difficult decision to have to make, but Lumber Traders is committed to doing what is necessary in order to remain viable while there is a reduced demand for building and construction materials,” said Arnold Schouten.
Tucson Supplier Calls It Quits
With no turnaround in sight for Arizona’s construction industry, A&H Building Materials, Tucson, Az., has closed after 47 years. “Closing down was a big decision. From all the info we could find, the economists said Arizona is not going to improve until 2014,” said general manager David Rung. “We decided to close, get out before we go totally broke.” Rung will retire Sept. 30 after 29 years with the company. Three employees transferred to parent company Grant Road Lumber, Tucson. Six others were laid off July 30.
Welco Restarts Fencing Mill
Encouraged by better-than-expected demand for fencing, Welco Lumber Co., Shelton, Wa., restarted its Naples, Id., sawmill after a seven-month layoff. General manager Brian Cox said production will ramp up in stages. The facility restarted on a limited basis in June with 13 employees. It started operating full-time July 17, with 37 workers. Considering 93 employees were laid off in December, Cox hopes to rehire more workers as fencing demand increases.
Pagano’s Hardware Mart, Alameda, Ca., opened a second location—an 8,300-sq. ft. store with 900-sq. ft. outdoor center at Alameda Towne Centre.
Eleven-unit Fasteners Inc. has moved its hardware showroom in Ferndale, Wa., to a larger facility. Other locations will also be expanded to appeal more to do-it-yourselfers.
Habitat for Humanity moved its ReStore discount LBM outlet in Clovis, Ca., July 10 to an 11,000-sq. ft. storefront directly behind the local Lowe’s.
Ace Hardware , Oak Brook, Il., has been ranked “Highest in Customer Satisfaction Among Major Home Improvement Retail Stores” by J.D. Power & Associates. The co-op has also launched a Helpful Hands campaign, a nationwide contest that will award a $2,000 paint makeover to one high school in each of the 50 states. Hanson’s Building Supply, Langley, Wa., marked its 30th anniversary Aug. 13 with a celebration that included a salmon feed, an air show and a dance.
Anniversaries: Collins Cos., Portland, Or., 155th … Ramshaw’s Ace Hardware, Mount Shasta, Ca., 65th … McKinnon Lumber, Hollister, Ca., 100th … Parr Lumber, Hillsboro, Or., 80th … Uptown Hardware, Portland, Or., 60th.
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GREEN Retailing By Jay Tompt
Sorting out recyclables
“GREEN” like recycling—or so many people assume. Since the pioneering programs in the 1970s, recycling has become one of the greenest virtues we Americans can claim. However, all is not what it seems. Like most issues in the realm of sustainable business and green building, there are various shades of gray, not to mention green. In today’s green building and green consumer markets, “recycled” and “recyclable” have become the low-hanging fruit for marketers eager to pin green credentials on their products. But these attributes alone don’t necessarily signify sustainable or green in any meaningful sense. Context is everything. What kind of material? What percentage is recycled, and is it post-consumer or postindustrial waste? How relevant is “recyclable” if in fact the material is not recycled? In addition, LEED guidelines vary by application and product type, so a building material with some recycled content may or may not earn LEED credits depending on how and where it’s used. It behooves the merchandiser to dig a little deeper to determine whether these terms indicate real value or are simply “greenwash.” OTHING SAYS
In the LBM and home improvement supply chain, aluminum, steel, glass, plastics, paper and wood are the predominant materials potentially recycled or recyclable. Aluminum, glass, and steel can be used indefinitely to manufacture the same kinds of products, and can therefore be truly recycled. For example, products like Maze Nails typically contain a high percentage of recycled steel, as do most steel products made in the USA. Generally, plastics, and paper can be used to manufacture things of lesser material integrity in a limited number of cycles, and are therefore downcycled. A great example here is Green Fiber cellulose insulation, which is made from more than 50% post-consumer recycled paper. Whether a material is recycled, down-cycled, or even up-cycled, it’s a good thing, since manufacturing from recycled feedstock is often less energy intensive than manufacturing from virgin feedstock. So, buying and stocking products with recycled content is a good thing, too, creating a market for such products and keeping the demand cycle going, so to speak. But when evaluating products, all “recycled” and “recyclable” claims are not created equal. Post-consumer recycled content trumps post-industrial every time. Claims that don’t make this distinction should be assumed, if true, to be post-industrial. Is this still good? Yes. Is it the mark of truly sustainable product? Not always. Post-industrial recycled content is usually scraps and cuttings that may or may not be easily put through the
The Merchant Magazine September 2010
production process again. In some cases, such as “re-grind” in the world of plastics, it’s easily reprocessed and is normal operating procedure. Generally speaking, it’s also harder to earn LEED credits with post-industrial recycled content. The term “recyclable” is next down the list. In fact, it’s very often misused by overeager marketers and can be deceptive. If the material is recyclable in theory, but not in practice, then the claim is probably not worth the virgin paper it’s printed on. In fact, deceptive claims of this sort violate the Federal Trade Commission’s Guides for the Use of Environmental Claims. Where there is no recycling infrastructure, per se, a manufacturer may have a “take back” program, which accomplishes the same thing. In sorting out product claims concerning recycled content and recyclability, manufacturer transparency and third-party certifications can help separate the green from the greenwash. It can also help to determine whether the product will meet your customer’s LEED project requirements.
Jay Tompt Managing Partner William Verde & Associates (415) 321-0848 firstname.lastname@example.org Building-Products.com
Anfinson Lumber Sales, Fontana, Ca., is now simply Anfinson Lumber , following its acquisition by Mendocino Redwood Co., Calpella, Ca.
Rick Anfinson continues heading the office, which now offers â€œeven greater inventory and selection,â€? according to Mendocino c.e.o. Sandy Dean.
Siskiyou Forest Products , Anderson, Ca., has added a new planer and moulder line in a new 10,000-sq. ft. building. Reid & Wright , Broomfield, Co., now distributes Yardistry wooden screens, modular structures, and fences.
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BlueLinx is now distributing Barrette Outdoor Livingâ€™s Xpanse brand railing, fencing, sheds, lattice and
yard accents nationwide.
Fiberwebâ€™s Typar facility in Old Hickory, Tn., is now marketing and distributing Benjamin Obdykeâ€™s Home Slicker rainscreens that incorporate Typar housewrap.
Plum Creek Timber Co., Seattle, Wa., has temporarily cut back on production at its Columbia Falls, Mt., sawmill, due to market conditions. . The company also has authorized a new $200 million share repurchase program, after completing a previously approved $200 million share buyback in May. Boise Cascadeâ€™s 211-acre former mill complex in Yakima, Wa.â€”idle since 2006â€”is on the sales block for $29 million.
Inteplast Group , Livingston, N.J. has licensed the exclusive rights to manufacture and market the CEVN brand decking using Inteplastâ€™s proprietary cellular PVC manufacturing process. The manufacturer has also launched the industryâ€™s first dual-color, dual-sided cellular PVC deck board. CertainTeed Corp.â€™s T-Roc thermal laminate foundation insulation system has been ICC evaluated and confirmed as building code compliant.
LP Building Products, Nashville, Tn., was awarded the UL label for its LP FlameBlock fire-resistant sheathing.
Azek Building Products has launched a green website at www.cpggreeninitiative.com.
APAâ€“The Engineered Wood Association preAnthony Forest Products Co., Georgia-Pacific Wood Products, LP, Norbord, Rosboro, Shelton Lam & Deck, and Stark Truss Co. sented safety awards to 16 mills, including
Redesigned websites: American Architectural Manufacturers Association, www.aamanet.org â€Ś BW Creative Wood, www.stairsimple.com â€Ś Hardwood Council, www.hardwoodcouncil.com â€Ś Superseal Window & Door Co., www.supersealwindows.com.
The Merchant Magazine September 2010
anywhere and everywhere
Fasten your tool belts. Simpson Strong-Tie has hit the accelerator with its offering of high-performance fasteners. Our new and extensive line of premium stainless-steel screws and nails offer corrosion resistance and a long life span from frame to finish. Our Quik Drive® collated screws are designed for many different applications, including roofs, subfloors and decks. And our selection of structural fasteners continues to increase with our new Strong-Drive® SD structural-connector screws and stainless-steel SDS screws. For the most complete line of fasteners that you can quickly drive anywhere and everywhere, make sure you stock Simpson Strong-Tie. To see all of our innovative fastener solutions, visit www.strongtie.com/fasten or call 800-999-5099.
© 2010 Simpson
Strong-Tie Company Inc. FASTEN10-D
and sell solar electricity to Sunset through a long-term, power-purchase deal. Excess energy will be sold to Pacific Gas & Electric Co. “Pacific Power made it easy for us to make the decision to go solar,” said c.e.o. John A. Morrison. “We wanted to be as green as possible for our environment while still being prudent with capital expenditures. By entering into a PPA with Pacific Power we were able to accomplish both of these objectives, and have the added advantage of stabilizing and reducing our energy cost.” Sunset hopes to install similar systems at its plants in Live Oak and Idabel, Ok.
BlueLinx Granted Extension
BRIGHT IDEA: Sunset Moulding allowed a power company to build a solar electricity generation system on its excess acreage in Chico, Ca., to power its millwork facility next door.
Solar Powers Moulding Plant
Sunset Moulding Co., Live Oak, Ca., unveiled a new solar-tracking electric system that was installed on three acres adjacent to its plant in
Chico, Ca. The project was financed and constructed by Pacific Power Management, which will operate the system
The Merchant Magazine September 2010
Cerberus ABP Investor LLC has twice given BlueLinx Holdings more time to evaluate a proposed $49.6million offer by the private equity firm to buy all outstanding shares of the distributor’s common stock. Cerberus already owns a 55.4% stake in BlueLinx. Its cash offer was extended from Aug. 27 to Sept. 3 at the request of a special committee of BlueLinx’s board, then extended again to Sept. 10.
BF<bWc[8beYa<_h[#HWj[ZEI8I^[Wj^_d] LP® FlameBlock™ Fire-Rated OSB Sheathing offers you the best of both worlds—impressive structural strength and remarkable burn-through fire resistance. Created by applying a patented, non-combustible Pyrotite® coating to LP® OSB panels, LP FlameBlock Sheathing is an ICC certified (ESR-1365), PS2-rated structural sheathing with a Class A Flame Spread Rating. It provides extended burn-through resistance, delivering a 20-minute thermal barrier (ASTM E119). It’s durable on the job site, easy to work with, and is Exposure-1 rated to withstand rain during normal construction delays. LP FlameBlock Sheathing is cost effective and available in a variety of PS2-rated thicknesses and lengths, including Struc-1. And from an environmental perspective, it contains no hazardous chemicals. Backed by a 20-Year Transferable Limited Warranty, LP FlameBlock Sheathing is the panel to count on when every minute matters. For more information on LP FlameBlock Fire-Rated Sheathing, call LP Building Products at 1-888-820-0325.
© 2010 Louisiana-Pacific Corporation. All rights reserved. Pyrotite is a registered trademark of Barrier Technology Corp. All other trademarks are owned by Louisiana-Pacific Corporation.
FAMILY Business By Bernard Kliska
What is the definition of family?
and regular family meetings are two of the strongest predictors for a successful family business. How do we decide who’s to be involved in a family meeting process and who can’t be? That used to be an easier question to answer. Family members have expanded to include individuals who could not have been predicted (or at least openly acknowledged) a few decades ago. Recently, we consulted with a family business owner who openly talked about and accepted his daughter’s lesbian relationship. His daughter—the company’s chief financial officer—and her significant other had been living together for 10 years and both were always present and comfortable at all family gatherings. Our client had scheduled an important family meeting a month away to discuss a critical issue in the family— a succession plan—and had called us in to help make sure that things ran smoothly. As we went over the list of attendees, we expressed concern when we realized that his daughter’s partner hadn’t been invited. “My God, I didn’t even think about it!” he replied, embarrassed. We realized that on one level, despite his good grace and benevolent intentions, he still hadn’t really accepted his daughter’s partner as a real family member. Fortunately, he OOD FAMILY COMMUNICATION
realized his omission in time to avert a potential disaster. Although underway for decades, fundamental changes in American families still challenge our long-held values and half conscious assumptions. It used to be that all we had to worry about were in-laws. Some people are still surprised to learn that the traditional nuclear family is actually a statistical minority. Between 1970 and 2000, married families with children dropped from 40% of American households to 24%. Unmarried couples account for 4.5% of all households, an increase of almost 75% in the past decade. At some point in their lives, more than one-third of American children can expect to live in a single-parent household. These facts suggest that any modern American family business is likely to include live-in partners (of the same or opposite sex), divorced or separated spouses, stepparents, adopted children, or stepchildren. We can decry, worry about, or embrace these changes, but, at the very least, family businesses have to acknowledge that these changes exist so family members can make clear, conscious decisions and anticipate their consequences. For example, what’s to be done with divorced spouses? Will the ex-spouse’s extent of participation hinge upon the amicability or bitterness of the divorce? What if the original family member is the one who caused the divorce by doing something horrible? What’s to be done for the children? Will decisions about the children be based upon their ages or their feelings and actions during the divorce? Are there any conflicts between what other family members feel is
The Merchant Magazine September 2010
right and what the embittered family member wants to do? Although there are no hard and fast rules for making these difficult decisions, a wide array of options exist. During emotionally wrenching times, it usually best to think of options as existing along a continuum. A vast middle ground lies between doing nothing and doing everything possible for a family member who is legally moving away from the center, and it is the area between the poles where the wisest solutions usually lie. When our hearts yank us toward extremes, it’s best to invite our heads into the negotiations. For example, a family may decide to exclude ex-spouses from ownership in the business but still include them as employees. Blended families can also present dilemmas. If a family member marries someone with children and legally adopts those children, are the children to be included in the family with the same rights and privileges as other family members? Some families decide this on the basis of the children’s ages at the time of marriage. But occasionally, notions of fairness and inclusion may conflict with some family member’s inherent belief that blood is thicker than legal status. In such situations, remembering to bring heads as well as hearts to the negotiating table will help members find compromises. Some values clarification may also help. Values are infinitely more rigid when they’re unconscious. Often, after people are allowed to clearly express their own values, they are willing to modify them. The trick in helping family members discover and express their values is to make certain they take responsibility for every statement they make. Saying, “I have trouble accepting that Building-Products.com
children who don’t share our genes and family history should have the same rights as my own children,” puts the issue squarely and honestly upon the table. Saying, “Why should your new husband bring his kids into our family and expect us to take care of them?” is certain to intensify the kind of defensiveness that can erupt into a battle. Finally, are long-term, live-in partners part of the family? If so, for how long must they live together before they’re accepted? Here, again, so many variables exist that the answer can only come from the family’s willingness to discuss the issue without insult or recrimination. A good starting point may be to discuss what each person really means by family. Some family members may purposely tailor their definitions to include or exclude the person whose presence has triggered the discussion. To avoid that, everyone should write down his or her definition. Then someone collects the papers and redistributes them so that each person ends up with a definition written by someone else. One by one, each person reads aloud the definition in his or her hand and a discussion follows. This exercise will not necessarily lead to a consensus definition of family—although that would be the ideal—but it will generate an honest, vigorous discussion that enables each person, as well as the family unit, to come closer to deciding what constitutes a family. Doing this exercise orients the family toward working together. It saves them from fighting for values that actually stand in the way of what is usually the ultimate goal: family unity. A parent’s fantasy is that the family that they have always envisioned will work together and stay together. It doesn’t always work out that way. But if parents can approach the new realities with understanding, if they are willing to accept a challenge and to work at the challenge, then the most important parts of their dream—a supportive family and a successful family business—can still come true. – Bernard Kliska is an associate of the Family Business Consulting Group, Marietta, Ga. He can be reached at (800) 551-0633 or email@example.com.
Reprinted with permission from The Family Business Advisor, a copyrighted publication of Family Enterprise Publishers. No portion of this article may be reproduced without permission of Family Enterprise Publishers.
September 2010 The Merchant Magazine
OVER THE Counter By Mike Dandridge
3 tools for providing an A+ customer experience “A
CTION, NOT WORDS!” is the demand of today’s customer. Just saying you have the best service isn’t going to cut it. Store décor, staffing, inventory, product selection, and timely delivery speak much louder than any worn out phrases we profess to believe. These elements are visual representations of the actions we take. The sum of these parts equals the customer experience factor—a mental scorecard a customer uses to grade your performance against his expectations. Meet expectations and you’ll receive a “5” on a score of 1 to 10. Congratulations. You’re average. Disappoint a customer and your score may fall to a 2 or 3. Do it often enough and you might end up on another mental list – the “Never Again as Long as I Live” list. Only by exceeding customers’ expectations can you ever hope to raise the score. Raise it often enough and you’ll earn their loyalty. Customer Experience Management (CEM) is a methodology and discipline for improving the customer experience factor. Of course, you’re already managing the customer experience to an extent. But, the real power of CEM is only tapped when every channel of customer interaction is carefully, intentionally administered. By every channel, I mean phone, sales counter, warehouse, Web presence, staff appearance and any other impression point between your company and the customer.
It Don’t Come Easy
Even though intellectually you may accept the idea that
What Customers Really Want
A 2004 survey taken by the IBM Institute for Business Value revealed that the key drivers of customer loyalty are the person-to-person and in-store experience. In fact, the scoring in these two areas was triple the response to “pricing and value.” (So much for the belief that all customers buy on price.) What customers really want is personal attention. They want to do business with a company who can turn an ordinary transaction into a compelling customer experience.
The Merchant Magazine September 2010
CEM is a valid strategy, it’s important to understand that it isn’t easy to implement. In fact, most businesses fail to deliver a compelling customer experience even after admitting that CEM makes sense. Often, it’s just a matter of using the right tools. Here are three tools that provide the foundation for building an exceptional customer experience unique to your customers.
Law #1. See through The Customer’s eyes.
John Daniels, manager of Average Wholesaling Supply, walked into the sales counter the morning after a heavy rain and noticed a roof leak had discolored one of the ceiling tiles with a muddy black stain. “I’ll have to get that changed,” he thought. But there were customers waiting and the phone was ringing and John was pulled into the busyness of the day. The next morning, John again notices the stain and makes a mental note. And the days turn into weeks. Gradually, the stain becomes invisible to John. He no longer notices it, but “The Customer” still sees it. And, as irrational as it may seem, The Customer makes a connection, a micro-association, between the stain and the service. He begins to think that John doesn’t care as much as he once did. Am I exaggerating? Tom Beebe, former chairman of Delta Airlines, didn’t think so. He told employees, “Coffee stains on the flip down tray may make a passenger wonder if we pay attention to engine maintenance.” For four bucks and 10 minutes, John could’ve headed this negative perception off at the pass. Again, this may not be rational or Building-Products.com
fair, but arguing the point is senseless. The Customer’s perception of your sales counter, your office, your warehouse, and dozens of other little impression points influence buying decisions. Change the ceiling tile, sweep the floor, and wipe off the dust. Pay attention to details. See your business through the eyes of The Customer.
Law #2. Listen to The Customer.
John thinks he’s a good listener, but like most people, he filters what he’s hearing through his own point of view. This causes John to jump to conclusions before the customer is through speaking. At other times, John is a selective listener. Remember when your parents said to you, “You only hear what you want to hear.” John is like that. One customer says something favorable about the service and it goes straight to his head. But, when another customer walks up and tells him the restroom is dirty, he dismisses him as being OCD. No matter how plain the words, John can never hear exactly what the other person says, because he cannot bring to the moment his undivided and unemotional attention. Active listening requires intense empathy. Act as if the person talking is the only one in the room. Then pretend the information you’re about to receive is a matter of life or death. If it were, I guarantee you’d suddenly develop listening skills to rival Superman.
Law #3. Empower all employees.
The phrase “You’ll have to talk to the manager” both emasculates the employee who has to say it and infuriates the customer who has to hear it. In the language of the consumer, this is known as “the runaround.” The needs and demands of customers vary daily and employees must be empowered to handle any situation. When you empower employees it transfers confidence to them and gives the customer an impression of competence. Richard Kessler, owner of Kessler’s Diamonds, tells his employees, “When you’re helping a customer, you are the company. If a
decision needs to be made, make it. Do whatever you think I would do.” When asked about employee mistakes, Richard admits, “One time in 10, I’ll wish an employee had done something different. But that’s a price I’m willing to pay to get the other nine fabulous decisions.” Remember, Richard is selling diamonds. If he can trust his employees to make decisions that carry that kind of price, shouldn’t you be able to trust frontline employees to use discernment when helping customers. If you’re not comfortable with giving employees total latitude, then set a dollar limit for what they can and can’t do. For example, one manager places a $100 ceiling on returns employees can accept at their discretion. Even then, teach employees something else to say besides, “You’ll have to speak to the manager.
Action! Not Words
Every business provides a customer experience. Most of time, it’s by default. Most of the time, it’s simply a matter of following what others have done before. But the great businesses, the ones that have become household names, like Apple, Starbucks, and Nike, design every detail of the customer experience. They understand that any chestthumping words of self-aggrandizement sound hollow and that a compelling customer experience smacks of action. Take a minute to think of the many tired phrases those words could replace. “Best service in town.” “The customer is king.” “Fast service, friendly staff, fair prices.” As a customer, I know that when I hear these empty clichés, I’m reminded of how the adults sound in the Charlie Brown Christmas special: “Wa-wah. Wa, wa, wah.” Show us, don’t tell us, our customers silently plead. Customer loyalty isn’t earned by the words you say, but by the actions you take.
Mike Dandridge High Voltage Performance www.highvoltageperformance.com (254) 624-6299 firstname.lastname@example.org
September 2010 The Merchant Magazine
MOVERS & Shakers Bill Myrick has been promoted to c.e.o. of ProBuild Holdings, Denver, Co. He succeeds Paul Hylbert, who is stepping aside from day-to-day responsibilities, but will continue as a senior advisor and board member. Eddie Smalling and Ryan Williams, ex-Forest Grove Lumber, are new to sales at Oregon-Canadian Forest Products, North Plains, Or. Steve Culbertson, ex-American Forest Products, is now part of the sales staff at Talon Forest Group, Portland, Or. Mark Durk, ex-Erickson Construction, is now general mgr. at Adobe Lumber, American Canyon, Ca. Jerry Miller has retired after nine years as a designer/estimator with Johnson-Madison Lumber, Great Falls, Mt., following 24 years at Lumber Yard Supply. Dan Byrne, ex-Hambleton Lumber, is the new sales mgr. at Family Investments Inc., which produces green fir and hem-fir cuttings in Battle Ground, Wa.
Matt Fields, ex-Pathway Marketing, is new to sales at Screw Products Inc., Gig Harbor, Wa. Sandy Alldredge, Shelter Products, Portland, Or., has retired after 47 years in the lumber business. Randy Robins, ex-Weyerhaeuser, has joined Ainsworth, Vancouver, B.C., as market development rep for the Pacific Northwest, including Washington, Oregon, Idaho, Montana and Alaska. He is based in Auburn, Wa. Rocklin, Ca.-based Greg Bates, ex-APA, is now covering the mid-Pacific region, including northern California, Nevada and Utah. Chuck Fuqua has been appointed executive director-strategic communications for American Forest & Paper Association, Washington, D.C. Brian Hawkinson is new as executive director-recovered fiber. John Smit will remain on the board of Woodgrain Millwork, Fruitland, Id., after he retires Dec. 31 as president of subsidiary Windsor Windows & Doors, W. Des Moines, Ia.
The Merchant Magazine September 2010
Peter Alexander, director, BMC Select, Boise, Id., has been named c.e.o., replacing Paul Street, who is now chief administrative officer and remains on the board. Stan Wilson, president and chief operating officer, will retire at the end of 2010. Michael Badgely has been promoted to executive v.p. Mark Carpenter has beennamed senior v.p. for the West region at Hanson Building Products, Irving, Tx. Charles C. Miller, president, Miller Lumber Co., Bend, Or., has been elected chairman of the Central Oregon Community College board of directors. Bob Palacioz, Thunderbolt Wood Treating, Riverbank, Ca., and his wife, Jeannie, welcomed the arrival of their second grandchild, 6 lb. 12 oz. Payten Elizabeth Clark, born July 31, 2010. Sara Bellum has joined the braintrust at Mungus Fungus Forest Products, Climax, Nv., report owners Hugh Mungus and Freddy Fungus.
B.C. Concentration on Low Grade Lumber Irks U.S. Mills
The U.S. Coalition for Fair Lumber Imports is considering filing a trade complaint that British Columbia wood producers are violating the Softwood Lumber Agreement. U.S. mills allege that B.C. manufacturers have been milling a larger percentage of low-grade timber procured with lower, government-subsidized harvesting fees. Reportedly, low-grade lumber rose from 10% of B.C. harvests in 2006 to 45% in 2009.
Universal Sells Endangered Truss Plant to Manager
When Universal Forest Products, Grand Rapids, Mi., announced it was closing its truss plant in Riverbank, Ca., general manager Jeff Qualle had to work fast to buy the facility and keep it open. “I guess you could call this a shortsale,” said Qualle, who had just weeks to find a silent partner and put together an offer. The sale became official August 9, when he took over the plant’s assets and lease. Now operating under the name of Better Built Truss, the company has about 33
employees. “I’ve worked with these people for years,” said Qualle. “Some of them have coached my kids in baseball.” When Universal Forest Products bought the plant four years ago, the facility had close to $20 million in sales annually. Last year, sales were just $4 million. But Qualle is confident that the plant will succeed. Business is already up 25% from last year, he said, and more than $500,000 in project bids have gone out. “We have fantastic people here who are working harder than they’ve ever worked. The workers, they feel like it’s part of them now. And it is. It’s for them.”
Green Building Show Delayed
Green Contractors Expo has been rescheduled from this month to May 17-18, 2011, at the Las Vegas Convention Center, Las Vegas, Nv. The inaugural show was held last year at the same site, under the banner of the National Green Builders Products Expo. Ironically, the first show had been scheduled to debut in the fall of 2008, but was postponed to May 2009.
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September 2010 The Merchant Magazine
the time Ace was selling franchises to going first year. The co-op also allegedly them, it wasfurther trying alleges to convert out 45 told the investors that if they built “It generate positive cash flows in the The lawsuit thatfrom at an owner-cooperative tofranchises a privately held orThe fourco-op stores also at once and contin-the time ng firstthree year. allegedly Ace was selling to basis for AFA’s entry intotothe U.S.publicprocess and we have tried to keep the Adds Talonalong as Division AFAwith corporation with intent offer dozens the Interstate 45since toldued theAFA investors that if they built them, it was trying to convert from an trading market and help expand its store sellable, moving things and closForest Products (USA) Inc.,area, a stock. o col- three74or corridor and Quad-City four stores at the once and continowner-cooperative to a privately held U.S. distribution market,” according to ing off sections to work on at a time.” subsidiary of AFA Forest Products The with plaintiffs thatpublic Ace was Another factor is that the couple mates ued they tens of millions ofcorporation ce with could dozensmake along thehas Interstate intentargue to offer an AFA release. Inc., Bolton, Ontario, acquired trying to increase sales of both fran-handled the whole project themselves, dollars. and the Quad-City area, ol74 corridor Talon Forest Group LLC, Portland, stock. chises and inventory toAce enhance The plaintiffs claim they repeatedly es they Or. could make tens of millions of The plaintiffs argue thatNears was thewhich included removing, replacing, Arizona Lumberyard likelihood of a public offering. tarts dollars. notified Ace about the poor perforand updating everything both inside salesRemodel of both franEnd to ofincrease Marathon Talon’s principals—Steven Ward, trying In inventory addition naming prices The mance of their franchises and demandclaim they repeatedly and the Aceand out. They also repaved the parking B&D Lumber to &toenhance Hardware, Robplaintiffs Turk, and John Percin—will stay chises Hardware as a defendant, the lawsuit ood ed assistance, but the and corporation lot, added a storage building for lumDouglas, Az., is nearing completion of Ace about partners the poor perfors in notified of a public offering. on as managing provide likelihood also names two men who sold Ace ng its “turned a deaf ear” and demanded ber and building materials, and a total remodel that was first enviof combined experiover es mance of 100 theiryears franchises and demandIn addition to naming Ace expanded the old office. franchises, as well as several directors yintime ed assistance, they back the money it had nearly four years ago. sioned ence inpay the forest industry. but the corporation Hardware as a defendant, the lawsuit “We wanted to make the store more “We are beginning to see the light and vice presidents of Ace. advanced to them. AFA already operates a distribution ts “turned a deaf ear” and demanded also names two men who sold Ace comfortable to shop in for our cusat the endasofwell the as tunnel,” Laura Portland, with theitaddition ush to theyyard me payin back thebut money had franchises, severalsaid directors tomers,” said David. “We also Studer, who ownsofthe store with her of Talon, “our combined size and and et has advanced to them. vice presidents Ace. widened the selection of products we husband, David. “It has been a long experience level will now serve as the presito sell, and wanted to make it more cusave to as tomer friendly.” si-marn any to Coos Bay Rail Line Returning ns.” rAfter a four-year closure, the Coos China ny Bay, Or., rail line is scheduled to w repreopen in spring 2011. natotal The Port of Coos Bay has been ket p- in granted $7.8 million by the state to ze the al rehabilitate the line. Most of the grant inlumwill be used to improve bridges and repair trestles along the Coos Bay-tohe Eugene route. m-
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The port earlier received grants to help purchase the railroad itself for $16.6 million, after it was shut down in 2007 due to unsafe tunnel conditions. The port then acquired another $13 million in grants to restore the tunnels. It is also seeking another $13 million from the U.S. Department of Transportation to fix rails, ties and ballasts.
Plywood Plant Adding Dryer
Boise Cascade will spend $11 million to replace an aging dryer at its plywood plant in Medford, Or., to boost capacity by more than 50%. “With the market like it is, this is the right time,” said David Elliott, engineering manager of Boise’s western Oregon region. “Seasonally, you would prefer to do it during the winter when you aren’t producing as much. Summer demand is usually greater, but the demand has fallen so short with the down market.” Boise Cascade hopes to install the new machinery late this month or in early October. Designed by Raute Precision of Finland with parts manufactured in China, the new dryer is bigger and more powerful, with increased capacity. “Each section has its own motor, so there is more air and more efficient use of air coverage,” said Elliott.
The Merchant Magazine September 2010
March 2010 The Merchant Magazine
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September 2010 The Merchant Magazine
Weyerhaeuser Selling Shortlines
Weyerhaeuser Co., Federal Way, Wa., has agreed to sell its six short-haul railroads—including the Columbia & Cowlitz Railway and Weyerhaeuser Woods Railroad in southwest Washington—to Patriot Rail Corp., Boca Raton, Fl. The other four lines are the DeQueen & Eastern and the Texas, Oklahoma & Eastern railroads in southeast Oklahoma and southwest Arkansas, and the Golden Triangle and Mississippi & Skuna Valley railroads in Mississippi. Combined, the six railroads operate over 160 miles of track, handling about 60,000 carloads of freight annually. The deal is expected to close in the fourth quarter.
Cabinet Demand Recovery Ahead
U.S. demand for cabinets nationwide is forecast to climb 7.4% annually through 2014 to reach $15.2 billion, predicts the Freedonia Group. From 2004 to 2009, demand decreased 4.8% a year. Kitchen cabinets, which account for 80% of total cabinet production, should rise 7.8% annually, while bathroom cabinets increase 6.9% a year. Cabinets elsewhere in the home grew 0.9% annually from 2004 to 2009, with the rate expected to jump to 3.8% a year to 2014.
IWPA Revises Veneer Standard
International Wood Products Association has approved a new voluntary IWPA Grade “Product Standard for Imported Rotary Cut Wood Veneer & Platforms.” The previous standard was released 10 years ago.
The Merchant Magazine September 2010
“It was time to do an overhaul,” said IWPA veneer committee chair Bronson Newburger, Clarke Veneers & Plywood. “Taking into account that veneer faces continue to be thinner and thinner, we realized that adjustments to the standard had to be made.” The new specs establish minimum requirements for each grade, and reflect the current trend in the way veneers are being produced and used in veneer and plywood markets. “It’s a better explanation of what mills need to know in order to satisfy customers’ demand, and what users can expect from suppliers,” added Newburger.
Oregon Harvest Down
Oregon’s timber harvest in 2009 was the lowest—at 2.75 billion bd. ft.—since the middle of the Great Depression, according to a new report. And experts don’t expect anything better this year for the nation’s largest timber-producing state. “The preliminaries I have coming this year show it’s going to be just about the same,” said state forest economist Gary Lettman, who compiled the new report. Butch Bernhardt, spokesperson for the Western Wood Products Association, noted, “This business environment is something most people haven’t seen in their careers. This is not once in a generation. It’s far beyond that. This is, perhaps, once in a century type stuff.” Robbie Robinson, part owner and c.e.o. at Starfire Lumber, Cottage Grove, agrees. “We’re running the sawmill one week, the planer the next week, trying to do everything with the same crew to keep working at all. We didn’t even do that in the ’80s,” he said. “I’m anxious. Every place you look, someone is reasonably anxious.”
Hampton Hopes to Restart Warrenton Mill in Late Spring
Hampton Affiliates’ sawmill in Warrenton, Or., could re-open by late spring next year, if the economy picks up. “If there’s a little improvement, we’ll open the mill,” said c.e.o. Steve Zika. “We’re investing money, it’s good for long-term competitiveness.” He’s hoping to restart between April and June. Hampton bought the mill from Weyerhaeuser in December 2009 and immediately closed it for extensive
upgrades, including log-scanning equipment and a new boiler. The mill’s new manager will be Bill Slagle, who formerly managed Hampton’s mill in Willamina, Or.
SPI Powers Up, Powers Down
Sierra Pacific Industries, Anderson, Ca., has suspended production at its power plant in Loyalton, Ca., as it awaits approval to expand the biomass facility at its sawmill in Anderson. SPI blamed the late August closure in Loyalton on decreased timber sales in the area, creating an insufficient
supply of fuel to feed the 20-megawatt cogeneration plant. The constrained timber supply earlier led SPI to close the power plant for several months late last year and shutter its Loyalton sawmill several years prior. The current facility in Anderson produces 5 megawatts of power for the mill. Once expanded, the plant will produce 31 megawatts—enough to power 24,800 homes—and the excess will be sold to a power company. “We won’t have a problem selling it,” said SPI spokesperson Mark Pawlicki.
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September 2010 The Merchant Magazine
KAHLE On Sales By Dave Kahle
Gain a sales advantage by collecting info about your competitors
we love to complain about the competition. Unfortunately, complaining doesnâ€™t do us any good. A better approach is to create a system to learn about the competition. Knowledge of the competitionâ€”not only their strengths and weaknesses, but also their patterns and tendenciesâ€”will provide you with a distinct advantage, and prevent you from getting blindsided or seriously outmaneuvered. That happened to me. To this day, I still get a sick feeling in my stomach as I remember the day when I lost my largest account to my arch competitor.
It was an account that made up 20% of my total volume. In my blissful ignorance, I was content to grow my business by calling on the end users and purchasing department, while my competition was successfully building a relationship with the administration. The result? My best account signed a prime vendor, sole-source agreement with my competitor, and within 60 days, I was almost totally out of that account. I was blindsided. Thatâ€™s a lesson that sticks with me, and one from which you can learn. To become good at knowing what your competition is up to, implement this
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