What rain can do to a wholesaler

Story sI q Glqnce

With rain again battering the West wi.th heauy damage lor a second, con' secutiae winter, this remind,er ol lnst year's losses ill,ustrates the brood seraices wholesalers giae the industryEd,itor.

The rains came early in southern Cali' fornia last spring; and, by April lst, three times the normal precipitation had fallen. In addition to flooding and much dislocation, distribution yard inventories became excessive due to the inability o{ customers to place shipments on construction job sites.

Robert S. Wells, director of distribution for the wholesale distributing yards of American Forest Product's Tarter, Webster & Johnson div., watched his courpany's yard inventories climb at every lo' cadon. At one yard in National City, the inventory value jumped $500,000 in just a 4fi-day period. As the location deals in large quantities of cargo lumber, the buy- ing by TW&J must be done far in advance of delir.ery. And, as Wells stated, "You iust don't turn off the spigot on cargo shipments."

Such material is paid for inl0 days from receipt of invoice and, in this particular case, had to be held at the yard for sixty days. Even figuring better than average receivables and normal cash flow, one hundred days for cash turnover was the norm. Lumber averaging $I00 per M in cost at B7o interest amounted to over $2.00 per NI in added interest costs alone.

To compound the problem, this adversity happened during the time of the California State lnventory Tax, which represented an additional cost of approximately $3.50 per M board feet.

"What started as a profitable transaction ended on a rather sour note,'o stated Wells. "Still, this is one of the risks the wholesaler can be faced with when he properly performs his function."

Stocking products to fill the needs of his market area makes it necessary for the wholesaler to "weathert' the storms as he stands ready to serve his trade.

Such concepts of current distribution practice point up the fact that the marketing function is being pursued by today's modern wholesaler, the functioning sales arm of the lumber industry.

Lumber Deolers Doy ot Show

A special invitation has been extended to all lumbermen to attend the 21st annual Western States Hardware-Housewares'Paint & Garden Supply Show, Mar. 1-3, at Brooks Hall, San Francisco. March 2 has been designated Lumber Dealers Day at the show. All lumber dealers are invited to spend the morning on a tour of Schlage Lock's manufacturing operations, and the afternoon at the show.

The tour leaves from Del Webb's TowneHouse at 9:30 a.m., Monday. A champagne breakfast precedes the tour. Invitations will be mailed to all dealers.

Special attendance and buyer prizes will be awarded to buyers and store employees. In addition, separate prizes will be awarded for Monday and Tuesday buyers. Color TV sets, trips to Hawaii, Las Vegas and Disneyland, and cash prizes will be given away.

Lumber dealers should not overlook the chance to see the thousands of lines of merchandise all gathered in one place for easy viewing at the 100,000 sq. ft. Brooks Hall, in the Civic Center of San Francisco.