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TWO,THREE years ago, with rhe I cyberspace race at full speed and full paranoia, executives were rushing to get their companies on line, even though they didn't know what "on line" meant. They just knew they had to be there.

Technology experts promised that there were millions of potential customers around the world lined up outside your computer screen door, and speculated about the day when the physical retail store would be obsolete-everyone would do all his shopping on line.

Yet, even today, the largest "e-tailers" (Shopping.com, bookseller Amazon.com) are losing millions of dollars each year. And most building material dealers' Web sites look more like on-line brochures than order desks. The question remains: Is anyone in the building products industry actually selling anything over the Internet?

Four-store ElliottAce Hardware, Milwaukee, Wi., is typical ol building material dealers on the Web. Despite stocking 65,000 items in each store, it limits its Web site to customer service: answering product inquiries, allowing customers to subscribe to its newsletter, inviting feedback on the stores. As a test. the chain has recently begun on-line sales of books on home improvement, gardening and woodworking.

James Lumber & Ace Hardware. Poulsbo, Wa., has been conducting online sales to the government since 1989. and launched its Web site in mid-1995. The site has provided new contacts and inexpensive advertising, but limited actual sales of a few trial items (Dewalt power tools, barbecue accessories).

"You have to have a reason for people to continue to come back to your site," says Mitch James. "Web site content about building materials is kind of dry and slow to evolve, compared to an industry like computers. My primary business is not publishing, so I can't devote all my time to adding content to it. The one draw I use is a Price Estimating page that I update every one to three weeks, depending on market conditions. I have received many comments from folks around the country who use it regularly and adjust for their local market."

Other sites, such as Columbia, S.C.-based Boozer Lumber Co.'s, feature a local weather icon. with suboptions for weather in nearby towns. Boozer's site has helped potential customers find the store (maps can be printed out) and helped the store find prospective employees. Potential vendors can check the business out before making a cold call.

On-line sales, though, are "a ways off," says Dale Boozer. "We can only deliver to about a 1OO-mile radius, and without a large order, even that would be hard to do profitably. If we had an exclusive product that would ship easily, we would consider it. A me-too product, available everywhere, could hardly be justified as an on-line sales item."

He sees certain products as Web friendly: power and hand tools, arts and crafts, especially one-of-a-kind or hard-to-find items, spindles, some stair parts, cabinet hardware hinges, swing and slide kits (without lumber), and yard items such as pots, park benches and fountains, things that are one-time buys and allow room for innovative design.

"I don't think lumber, siding and plywood will ever be sold on the 'net to consumers," Boozer says. "Maybe contractors would buy it that way, under certain circumstances. in local areas. But the bulk and shipping costs make most commodities, like drywall,

totally unfeasible."

That's why Home Lumber Co., Whitewater, Wi., operates its Web site as an extension of its successful 13year-old mail order program. It has been selling tools via the Internet since late last year, and hopes to expand to accessories, such as leather cases and special router bits, and post tops, all items which also should be easy to ship long distances.

According to Jay Savignac, v.p.- operations, it comes down to "can I get you the correct product in a timely manner for the right price?"

"Sometimes it's something off the wall," says Dale Bernard, v.p., George Kellett & Sons, Inc., New Orleans, La. "The first call we got was from a contractor in Virginia who was looking for old timbers to renovate a 3OO-year-old church. We got a call from a craftsman in Ohio looking for some southern yellow pine boards, because his local lumberyards were charging too much for it. We also sell a lot of our fire retardant product, while the export stuff can be steel, lumber, anything."

Bernard attributes additional sales of about $100,000 to Kellett's twoyear-old Web site, mostly from out-ofstate or international buyers. It has also provided contacts with agents in Costa Rica and the Caribbean interested in reselling some of Kellett's products.

He created and maintains the site himseli and attracts interest to it by registering with various search engines and linking with as many other related sites as possible.

Bernard doesn't foresee the company ever having an on-line order desk, although sales should continue to grow as the Internet continues to increase in popularity. "To me, it's more like Yellow Page advertising, but on a much broader scale," he saYs. "We dumped a lot of our Yellow Page advertising to pay for the Web site, and it's been a whole lot more effective. It's like an intemational Yellow Page ad. We never would have reached customers in Panama, Costa Rica or Virginia, without it."

But as more potential buyers come on line, more hopeful sellers also will surface. Providing helpful information, such as installation instructions, warranty information, or Material Safety Data Sheets, may lure buyers to a site, but will not necessarily translate into a sale. "Internet commerce could be like a Brookstone's-a place to get tons of detailed information, more than a clerk in any store could possibly know," Boozer predicts. "Problem there is: what is to keeP someone from using your Web site to get this great information, then going to his local store, armed with all the information he needs, and buying the product there----cutting out the person with the nice Web site. I see this as a real danger-stripping information and not reciprocating with a purchase. And, I don't see any way to prevent it. The Internet is a great information disseminator-but whose information is it?"

For manv. the most sensitive data are prices. Several dealers have considered a restricted-use database for approved contrac- tors, with password access, ,\ S to reach a dealer's pricing \files and place orders.

But, cautions Boozer, "full service dealers might not be comfortable putting their entire price book on line, even with password access. Customers could become disgruntled, and give their password to a competitor lumberyard, who could have a field day downloading all the price files. A 'price' yard might not consider that a risk, and in fact already publish their commodity prices. Some might feel that the more potential customers that access their prices, the more sales they would make."

What about for service-oriented independents? "Selling 2x4s on line is going to be the exception rather than the ruIe," James predicts. "So much of our business is relationships. Look at Georgia-Pacific. They discounted the value ofrelationships and it cost them dearly."

He adds, "Many might think this is a way to automate the order taking process. I don't think we will get to that point for a couple of generations, if ever. It is and will be easier to pick up the phone and run off a list of items you want delivered because the person taking the order will know what grades and species you use."

Construction software developer Rod Giess agrees: "One reason Web sites typically do not work is that lumber vendors know they are selling a commodity, and can only justify reasonable profit margins by offering superior service and personal attention to their customer base. If you ask customers to order from a Web site, all of a sudden you remove that Personal touch, and therefore the justification for that customer to pay higher margins for service he is not getting."

With that in mind, Giess is introducing an Intemet-based, client/server package called SpeedBuilder that streamlines the trading process between lumberyards and their pro customers. Its purpose is not to locate new customers but to exPedite the trading process with existing customers.

He designed the system to benefit both seller and buyer, since it eliminates re-keying order information and makes job costs easier to track. "Contractors are a self-sufficient bunch, and while they exPect vendors to deliver materials on time as needed, they won't ) mind doing the work of keying items if it gives them the fast response they need, and saves them clerical effort

.,, later," Giess explains.

Over the last few years, other companies have develoPed software that would allow electronic buying and selling of forest products between retailers, wholesalers and manufacturers. Internet, Intranet (private server) and satellite-based systems have come and gone, usuallY with the epitaph: "They were ahead of their time."

More are coming. Set to launch in August, FPtx (Forest Products Industry Exchange), Dallas, Tx., is introducing a transaction-based platform on which buying, selling, and payment can be arranged. Through a private server, producers, wholesalers and retailers are linked together on a real time basis to conduct real time bids, offers and transactions. www.homelumbercom.com

"Customers can select who theY want to buy from, and sellers can preference whom they want to sell to," explains co- tl" founder Johnny Ainsworth. "General market price rePorting will be available on a daily basis, but all transactions are kept Private. The reason that we are not launching using the Internet is due to the instability of Internet service providers and speed. As we regard the nature of information we will process as mission critical for our members, we want to make certain that our system is fast, secure and stable."

Nelex (North American Lumber Exchange), Guntersville, Al., already has signed up 52 mills and 165 buyers for its private server network, which started up earlier this year and will eventually be over the Internet. The service provides approved buyers with quick access to mills' offerings, but does not accommodate actual transactions.

"We're trying to exPedite, not change, the process," says NRLrx's Mike Ferguson. "6OVo to 707o of the calls to a mill are querying what they have. This reduces shopping calls and increases buying calls."

In various forms, electronic commerce continues to increase in the building products industry. What form it will take and to what extent it will be used, no one can predict, exactly, even two or three years ahead.

James Lumber & Ace Hardware, www.hardware,com

Kellett & Sons rr'nvw, kellettlu mber.com