Sellins a new kind of customer Story ot o Gfonce

A. Just like starting a brand new business. Reliable had had a couple of mobile home and component maker accounts as early as 1967, but we really were starting from scratch,

A. None in California we know of. As for the other l0 western states your magazine covers, wetre not sure enough to say.

Q. Do you recotntnend, the business lor the aaerage retailer?

A. Nq definitely not. Chances are he doesn't have enough customers to absorb the entire inventory.

Q. How about a retailer alread'y sell' ing builders?

A. No dice there. Ifhile buying requirements are somewhat related, it is really a separate business and a highly specialized sales field.

Q. What is your trade areo rww?

When Reliable Lumber Inc." Rosemead Calif., decided to try and sell to the mobile home manufacturers. they were fortunate to obtain the services of Ray Van Ide, a 33 year veteran of the lumber business whose experience includes operating his own business for more than a decade.

Q, Nun tha,t you hnue been operating lor nearly two years, Ray, lwp d,oes it look to you?

A. It's beginning to be very gratifying. Now we have people calling us on the recommendation of others, quite different than when we started.

Q. How long wu it betore you lelt you had, a .going thing?

A. It was more than a year before we passed the go/no go stage. We etarted in a bad sales period, the first quarter of 1970.

Q. Relio,ble Lumber lws long been actkte selling tracts and ild,ustrials. Do you get into any ol tha,t?

What ha what happens wh€ lumber dealer sets lumDer sets up a department to sell module and when a retail mobile home manufacturers . the problems, the potentials, the grief and the joy, in this Merchant Magazine interview with Ray Van lde, mgr., mobile home lumber sales div.

Q. Whnt are the most irnportant factors in setting wp a d,epartm,ent like this?

A. Four thingso (l) capitelization, (2) learning what your customers need and want, (3) how much and kind of inventory to carry and (4) selling it . . that's the big one.

Q, How d.oes capi.talization d,ilfer lrom an ord,inary lumber operatinn selling conlrqctars?

A. You've got to be willing to go all out on this thing. Remember, you have no lien rights and the cash flow is considerably slower. We normally expect payrrent in 30.45 days, with a builder the usual time is more like 10-15 days.

Q, Who is your conrytitian?

A. Other lumber companies, wholesalers like Far West Fir Sales, Fir & Pine Lumber C,o., Pine Ridge and Inland Lumber Co.

Q. Aoy retailers?

A. The four county Los Angeles metropolitan area.

Q. How lar away haue you soW an account?

A. We figure we can sell and service in about a 350 mile radiug.

Q. What other areas in the west would be suitable lor an operation such as you haae?

A. This is really in the nature of a guess, but I'd say Sacramento, Portland, Eugene, south of Seattleo Boiseo Phoenix, Tucson and Denver.

Q. You seII mostly n mobile home manulacturers nou), uhat i"s the potential lor the lactory builts and modules?

A. We think it could be as big as the mobile home business is todav.

Q.'In fue years, what percentage ol the single lamily home market da you see mobile and, mnnulactured hornes taking?

A. A lot of people say fifty percent.

Q. How na.ny custunners d,o you haae now?

A. About a dozen, with a potential of several more. On a basis of sales, we figure we are in the top three in the L.A. area among suppliers of mobile home manufacturers.

Q. How is your oolume ol sales?

A. The latest final figures we have are for March, when we did double what we had done theprevious year. It's our biggest month ever.

Q. How iloes'71:72 laoh?

A,. Better, getting better all the time. ln five years we should go off the chart. This is turning out to be a better thing than we expected.

Q, Getting bach n the selling, Ray, hnw ums it at the inceptian?

A. Youove got to be prepared for a Iong pull in the sales end. We called one account practically ev. ery three weeks for more than a year and a half before we sold anything. This is also where capi. talization counts. You've really got to be able to go all the way with the thing. tlEtDlllc questions on the involved requirements 0f his customers, Van lde reliei on comprehensive information files he has oompiled for his specialized sales field,

We use a lot of falldown due to the manufacturer's specialized production line uses. We remanufac. ture a lot of stock for them.

Q, CouLd a frm conceiuably use custom, mihl lacilities?

A, I suppose so, but you would be making constant trips to the mill. We boughr machinery to avoid that problem.

Q. Haoe yoa used, the custorn mills?

A. We have a little.

A. They really hurt. This will bring about the use of substitute materials faster than anything'else.

Q. Do you see manulacturers going to new metal lrarning systetns such as Alcoa's new Alumilrame?

A. Probably nog it is too difficult and expensive for the plants to con. vert. The only thing that could do it would be if the price of lumber went up to the point where it paid them to make the change.

Q. Do you talk mostly to purchasing agents?

A. Yes, and that's a different thing than selling builders. The p.a.s are responsible for buying between 800 to 2,000 items. Chances are they dontt know much about lumber.

Q. Is that why there haue been cases ol, shall we cahl it, unconoentionol uses ol lumber in mobile homes?

A. Yeg and that's why one of the most important things we do is to educate customers as to the best useq, grades and species. Initially, they are not too receptiven generally, but as the advantages are there, they usually become so later.

Q. H"* do you hand,le the inaentory set-wp?

A, We have a five acie lot in Temple City where we do most of ihe milling and have covered storage.

Q. Haae you hnd, any particul,ar problems seroicing atcounts?

A. No unsolvable problems, but they really keep us hustling. Produc" tion hold.ups aren't allowed, the line can't go down.

Q. A"y examples?

A. It doesn't bother them to get you up at six a.m. to make sure you'll have what they want. Reliable's flexibility and cooperation providing this kind of service has been a gr€at benefit. Our yard superintendent has been here at 4:30 a.m. loading trucks.

Q. Hoae thc mills up northbeenhelplul in supplying spciahy items?

A. Yes, special lengths.

Q, How haue recent price hikes in lurnber and fl,ywooil ofrected you?

Q, How rnuch ol a mobile home is made ol wood or wood, products?

A. Lumber, plywood and underlay. ment are the biggest single dollar cost in the unit.

Q. What was the efrect ol the new lumber snndard,s changeouer?

A. Brrrr. Don't mention it. But we have passed through the worst part of it.

Q. Whom do you see as your luture competitors?

A. Possibly other dealers, major lum. ber manufacturers, some are eye. ing the field now, even mills from as far away as Canada.

Q. Wiil your ma,rket use nore lwnber in the luture?

A, Yeso manufacturers are using more wood for decoration, trying to get away from the tin box look. Aluminum people are trying to dupli. cate the loolc of wood. They have some advantages as their product is maintenance free and weighs lers, an important factor in this market. But there is really noth. ing that can do the job like wood.