etitive ligence Chiseling niches

By Carla Waldemar

fT WAS a fancy-schmancy architect lwho said it. but it holds true for lumberyards: 'icod i, in the details."

John Olson, owner of 47-year-old Olson Lumber, Seattle, Wa., is a softspoken man, a modest, "aw shucks" kind of guy who took his father's business to $3 million in 2003 ("and this year, sales are up another 107o") in the face of a pair of boxes side by side just a mile down the road. John took advantage of offbeat niche markets nobody else was touching while at the same time aggressively rebounding from the onslaught of Lowe's and Home Depot through what's always been his mainstay, quality and service.

He doesn't mind going to the ropes on price, either-although "we never try to be the cheapest," he says today of the inner-city store nicknamed "the poor man's lumberyard" when his dad bousht the location back in 1957.

"You'll go broke that way. Somebody will always beat you."

Nonetheless, when sales plummeted the first year the boxes came his way, "I was really worried," he admits. "What happened?" As he learned, "Everybody needed to try them once. Then, everybody came back, saying, 'The quality's terrible,' 'You can't get waited on,' and other horror stories. The biggest complaint I hear from contractors is that they have to go through 100 boards to find the good ones. The boxes talk a good story, but they often can't follow up on their promises." In contrast, Olson stakes its reputation on its honesty: "What we say, we do."

To settle upon a counter-thrust, John says, "I went up there and headed for their high-end sales departments-doors and cabinets-and listened to them talk to their customers.

That way, you understand in a hurry what's needed: someone who understands the product and shows his commitment to the customer. When the boxes don't deliver, you step in and bid properly and get the job." Hardly rocket science, but that kind of thinking builds results. "Olson has never lost a cabinet quote to the boxes," John can claim.

In fact, cabinet sales have been "phenomenal. They really took off last year. Good margins, too. And it snowballs. When they come in for cabinets, we end up selling them the whole kitchen."

To combat the image of the boxes as the low-price provider, Olson adopted new advertising maneuvers. "We attacked their aggressiveness on blind items," he says. He now posts a weekly-changing price board listing l0 items with Olson's prices alongside those of the boxes under a heading asking, "Why pay more?"

"On average, we were lOVo to l5vo lower in price. Their sale price was higher than our regular price. A lot of people have it drilled into them that the boxes are the cheapest in town, so we want to educate them to compare," he explains.

His husky walk-in trade has mastered the math. as well as an appreciation of the value-added expertise of veteran employees. "We have good relationships with our remodelers, too," John adds. "They know they can pick our brains. A lot of [success] is personality-an air of confidence, showing them you like to be around them, that this is a friendly place."

John can walk the talk with the pros. Before joining his father's company after college, he signed on for some "post-grad" education. In order to get a feel for the business perspectives of other facets of the industry, he decided to work a year for a contractor and another year for a wholesaler before stepping behind the counter.

The investment in empathy has paid good dividends. John is able to source scarce products that have carved a couple of singular niches for the company. "We've built our reputation on very high-quality material," he reiterates. "Now, everybody's cutting second growth, and it's hard to distance yourself in content. But we keep in contact with the right mills; we guard our suppliers and in turn we can stock what nobody else does, like long timber, which I also then sell to other lumberyards. I just quoted a job needing 24"x24"x60'. Not many mills have the capability to cut that, so, while people have a lot of wants and desires, a lot of it is knowing where to go to source them, because a small mill can handle only one or two players. By the time we quoted it, it ran over $100,000 for not all that much timber.

"We also carry clear cedar gutters," another small but unique niche that pays. "People often need them for replacements, plus new construction, and it can be lucrative. Aluminum runs $2 a foot, while cedar goes for anywhere from $8 ro $10, $12, $13. We sell a lot of that to other lumberyards, too," he allows.

Adding yet another niche to the mix, "we'll stock a product others have discontinued, such as shiplap board used under siding, which is needed for repair work. Nobody else stocks it anymore-and when a roofer comes in, he also picks up a few boards and a pound of nails...."

Along the line of discontinued material, John also specializes in boat timber. In the mid-'80s, his father bought another small yard that made the product its forte. "We continued to grow that niche, serving fishing boats, tugs and decks in need ofrepair. They need such high-quality materials, and few other yards can handle it. We just got an order from Portland," he reports from Seattle. Portland, Maine, that is.

Another niche came about by accident-well, an accident based on Olson's solid reputation. While having lunch at a nearby restaurant, a stranger started sketching on a napkin as they talked. "I want to build a house, so send me some lumber. Here's a check for $10.000: let me know if you need more," the guy said.

Turns out he was from Alaska, where quality is crucial because the cost of shipping adds considerably to the materials ordered. "You pay $500 for freight and if the material's no good, it really adds to your cost," Jack explains. "Our reputation for high quality preceded us, backed up by our honesty."

Since then, the customer has been back to order a garage and also spread the word. "Now we send materials to l2 or l5 Alaskan native villages, thanks to word of mouth-'Gee, you ought to try Olson Lumber; they've got good quality.' The business is seasonal-we ship March through June-and very, very labor-intensive."

And worth it. Just keep an eye on - Award-winning LBM trade magaztne those details, and the big picture paints editor Carla Waldemar writes frequently itself. on the building material industry. Contacl her at cwaldemar@ mn.rr.com.

l:trlrrrs

B e r g e ron Lumb et, Vancouver, Wa., has closed after 57 years; Wayne Bergeron has sold the 2.5acre site to developers and will now work with his father, founder Murry Bergeron, in ranching

Olson Lumber Co., Seattle, Wa., has been acquired by Dunn Lumber Co., Seattle, as its 1lth Puget Sound area location; the 47vear-old business will retain the blson Lumber name and Jack Olson at its helm ...

True Value Hardware. Glenwood Springs, Co., is searching for a new location after learning that the neighboring high school will expand on to its current site

Environmental Home Center has reopened its 30,000-sq. ft. showroom that was destroyed by an August fire at an interim location in Seattle, Wa.

Kelly's Home Center will add a second store in Salem, Or.

Lowe's Cos. opens a new store Feb. 22 in Huntington Beach, Ca., and unveiled locations Feb. 1 in Espanola, N.M.; Jan. 25 in Meridian, Id., and Jan. 18 in Fremont, Ca.

Lowe's applied to build a I.4million sq. ft. regional DC on 204 acres in Lebanon, Or., with room to expand to 2.2 million sq. ft.; the fully automated DC, which will supply stores in Oregon, Washington. Idaho. western Montana. and portions of Nevada and California, will take two years to build

Lowe's will open in 4th quarter 2005 in E. Tucson and Happy Valley, Az., and NW Las Vegas, Nv.; applied to build a second store in Roseville, Ca., and is eyeing a site in Hanford, Ca.

Home Depot opened new stores Jan. 27 in Selma, Ca. (Brenda Boggs, mgr.); Jan. 13 in Red Bluff,

Ca. (Tim Anderson, mgr.); Dec. 16 in Nogales, Az; Hilo, Hi., and Stanton, Ca., and Dec. 9 in Millcreek (8. Salt Lake City), Ut. ...

Home Depot acquired 11.5 acres to build its second store in Eugene, Or.; is constructing a 130,501-sq. ft. store with a 27,988-sq. ft. garden center in Poulsbo, Wa.; anticipates a December 2005 opening in Hermiston, Or., and a January 2006 opening in Liberty Lake, Wa.; proposed a new store in Auburn, Ca.; is considering a site in Newark. Ca.. and is in talks to relocate to a larger site in Salinas, Ca.

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Owens & Hurst Lumber Co., Eureka, Mt., will shutter its 60year-old mill in May and auction off its equipment due to a shortage of national forest timber ...

Sears Trostel Lumber, Fort Collins. Co.. has moved its hardwood manufacturing operation and wholesale DC into a larger 19,000sq. ft. location ...

Montana Lumber. Corvallis. Mt., has been launched by office wholesaler Chris Lecce. ex-Lewis Lumber ...

U.S. Timber Co.,Eagle,Id., has resumed operations at Willamette Forest Products, Sweet Home, Or., manufacturing dimension lumber, studs and timbers; the facility should reach full production by mid-March; sales and administration are also now located on site in Sweet Home ...

Pacific Lumber Co., Scotia, Ca., eliminated a shift at its Fortuna, Ca., mill, laying off 38 employees and reassigning ll others

Ketchikan Gateway Borough Assembly agreed to lease the former Gateway Forest Products veneer plant in Ketchikan, Ak., to Washington timber products con- sultant Ted Falconer; the facility, which went bankrupt four years ago, is to reopen in May

Weyerhaeuser Co., Federal Way, Wa., is reportedly in talks to sell its coastal Vancouver, 8.C., lumber operations to Brascan Corp., Toronto. Ont.: the former MacMillan Bloedel assets include five sawmills, two remanufacturing plants, timberlands, and Crown land cutting rights....

Weyerhaeuser completed the sale of its Chester, S.C., plywood and lumber complex and its hardwood plywood mill in Moncure, N.C., to Wood Resources LLC, Greenwich. Ct. ...

Pope & Talbot, Portland, Or., has acquired Canfor 's Fort St. James" B.C., sawmill and related harvesting rights ...

Simonton Windows has moved its vinyl window and door operation to a new facility in Vacaville, Ca.; the new site has 195,000 sq. ft. of space, with 175,000-sq. ft. for manufacturing, distribution and warehousing and 20,000 sq. ft. of office space ...

Do it Best Corp. is now fulfilling online orders from the majority of its DCs, including Woodburn, Or.; previously all online orders originated from its DC in Cape Girardeau, Mo.; a planned DC in Mesquite, Nv., will also participate once it begins operations in early 2006...

Enterprise Computer Systems will offer seminars through its estimating department, licensing the rights to the workshops designed by the late Bill Darling ...

Housing starts in December (latest figures) rebounded nearly IlVo to a seasonally adjusted annual rate of 2 million ... single-family starts increased l3.lvo to 1.68

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