How to get higher treated margins

By Huck DeYenzio Manager, Advg. & P.R. Hickson Corp.

It OU can make more money on I pressure treated lumber. Don't feel trapped by low price pressures.

At many lumber yards and home centers, pressure treated wood has become a commodity-type product, or close to one. It's a high volume, low profit item. Fifteen years of consumer demand growth prompted building material outlets to add treated wood to their inventories. Now with nearly all lumber dealers carrying treated products, demand has quit growing. Competition is tougherthanithas everbeen. The pressure on treated wood prices is intensified by the emergence of mass merchandisers.

While probably no dealer has been immune from competitive pressure, some dealers have been successful in preserving reasonable margins. Their secret? If you don't want a product to be treated as a commodity, don't treat it as a commodity yourself.

You have to make your product different from the rest. You have to set it apart in name, features, display and advertising. This differentiation is not difficult. A good supplier can fumish considerable help and you can improve your margins handsomely.

(1)

A known brand gives your customer confidence in the quality and safety of treated wood. Generic wood and unfamiliar brands are not going to boost your margins or reflect well on your store. Which would you be willing to pay more for: Coca-Cola, Dave's Cola oranunmarkedcan? Stockbrandnames and advertise them by name.

(2) Offer special products.

Consumers will spend more for an item that saves them time or has a clear benefit. Carry value-added treated products such as pre-cut step stringers, spindles, newel posts, mailbox kits, weather resistant lumber and prestained wood.

(3) Promote projects, not products.

Highlighting lumber prices in ads causes consumers to use price as the main measure for comparing stores. Instead, focus on product differences and benefits, and promote projects. Homeowners don't really care about the price of a2 x 6, but they do care about the cost of a new deck. Offer deck packages that include hardware and building plans. Throw in an instructional video tape, or a discount on stain.

(4) Put your treated wood where it gets respect.

If your treated wood is in the farthest corner of your yard and unprotected against weather, your customers will have low regard for it. To make more money fromtreated wood, give it some respect. Indoor supplies should be in a well-lit area like your packaged goods. Outdoor racks should be accessible without a four-wheel-drive mud monster.

(5) Keep an orderly yard. You'll have a hard time getting higher margins if consumers see broken bundles, individual pieces scattered on the ground, steel bands lying around, and trash littering the area. Demand goodJooking, even bundles from your supplier. Then stack them neatly. Tell your yardmen that maintaining the lumber area can bring in more profits and see that your yard is orderly.

(6) Make use of point of purchase materials.

Posters, literature racks, deck displays and pamphlets can help customers understand the features of your treated wood. Such items also encourage cornumers to build more projects. If you're not doing sonow, getbuilding plans and promotional materials from your treated wood supplier. Display literature prominently and keep racks filled. A sloppy or half-empty rack leaves an undesirable impression.

(7) Train your countermen.

It's not easy to have a knowledgeable staff. You suffer continual turnover of personnel and you carry thousands of SKUs, but helpful, informed countermen can have a significant impact on your bottom line. If a prospective customer wonders why your treated wood prices are higher than a competitor's, a trained salesrnan can explain the differences: brand name, lifetime warranty, lumber grades, retention levels, built-in water repellents, etc.

Nearly all recent surveys indicate that while consumers are buying conservatively, they are willing to spend money on quality products. Your salesmen can sell higherpriced wood if they can explain the benefits. Competent salesmen can also take advantage of cross merchandising opportunities.

Story at a Glane

Techniques for selling treated wood as a specialty item .. name brand material, proiect sellang and promotional activities to increase rcturns on sales.

(8) Conduct a deck clinic. Sponsor a deck clinic. With some planning and promotion, you can effectively differentiate your treated wood and your store from others. Your treated wood supplier should be able to help you with ideas and presentation materials.

(9) Hold a program forcontractors. Make sure your professional customers and prospects understand the features of your treated wood. Have a product seminar for pros or host a contractors' breakfast. Supply information that contractors can pass along to their customers. At a minirnum, contact builders with a mailer or include flyers with your monthly invoices.

.1. HERE is more to merchandising I structural wood fasteners than simply selling them for the lowest price. Concept is essential. If the ultimate customer cannot appreciate the value of the product, there will be no market.

Some may think fasteners are used only in the architect/engineer/ builder fleld. Others may view them as do-it-yourself products. Actually, they are used in projects ranging from simple backyard sheds or decks to huge buildings with manufactured joist and laminated beam components using l-Beam hangers.

Proven, successful merchandising techniques that stress product quality, ease of use and customer service will keep you ahead of the competition and out of pricing games.

o Create point of sale displays for connectors in the various product departments where they will be used to cross-sell merchandise and sell solutions for projects.

o Offer a selection of sill plate

Story at a Glance

Suggestions for increasing tums in fasteners. point of purchase display ideas, prepackaged kits, free literaturle, crossF selling product selection tips ways to use o(x)p advertising.

anchors, sill-to-slab anchors, post bases and anchors, Brick-Tys, hold downs and straps for concrete.

o Assemble a selection of fence rail and post brackets, wet post anchor bases. fence section rail brackets, face rail brackets and post covers for fencing. o Create a special deck promotion display. Using a sectional demonstration deck (2' x 6') you can build yourself, show the customer how simple the building process is. o Offer pre-packaged deck construction kits of lumber, connectors, concrete, nails and decorative railing materials. Display tools, paints and stains needed to complete the project. This kind of sales leverage will increase turns by 20 to l. o Include an offer for free do-ityourself plan folders using structural wood fasteners in your newspaper ads and circulars to increase store traffic and customer interest. o Cross-sell connectors with related products in your print advertising to generate awareness and create demand. o Combine co-op advertising allowances from related product suppliers to help fund blockbuster sales promotion events. o Keep in mind that connectors are solutions to wood framing problems confronting builders, remodelers and do-it-yourselfers. People seeking solutions don't shop price. If a product is reasonably priced, of good quality, well engineered, building code approved and supported by helpful, user-oriented instructional material, it will sell and provide sales leverage to increase turns. o When you help a customer solve a problem you do far more than make a sale. You also make a friend who will come back to buy again and again.

. Use small, mobile merchandisers with header signs and shelf talkers available from distributors and manufacturers for specialized displays that demonstrate product use.

. Stress product quality and acceptance. Stock connectors that are engineered and tested, made of galvanized structural grade steel and nationally code approved by all major building code authorities.

Merchandising suggestions in this article are based on an inlerview with Edh,ard P. Mooers, vice president, sales and ma rket i ng, Teco/Lumbe rlo keditor.