NBfftDAnnuql Told Plonning snd Foresight Necessory To Survive in Ero of Intense Competition

Problems facing building material distributors and trends for the l0 years ahead oc-upied sessions of the eighth annual convention of the National Buildine Material Di.tribu_ tors Association in Chicago's Edgeriater Beach hotel, November l6-18.

M. C. Blackstock, vice-president of Lumber Supply & Warehouse Co., Seattle, Wash., was electecl Assoiiailon president. He succeeds Don Knecht, general manag'er, B-uilding Material Distributors, Rapid CiIy, South nat6ta.'

M. L. McCreery was named yi6g-presidlnt and Don B. Richardson, Richardson Lumber Co..^Denver. Colorado. was elected treasurer.

New directors of the Association, for three years, are C. L. Johnston, Davenport, Iowa; Walter G. Marsl, Detroit. Mich; M. L. Murphey, Sioux Falls, S. D. ; Mr. Richardson, and C. W. Walters, Somerville, Mass. Re-elected for oneyear.terms as directors are Mr. Blackstock; J. F. Dillon, Sgth Bend, Ind.; C. J. Friedl, Louisville, Ky.; A. B. Lewis, Columbus, Ohio, and J. L. Stoneback, Quakertown, pa.

Directors re-elected for two years are E. H. Fahrenkrog, St. Louis; C. Lawrence Fenner, Rensselaer, N. Y.: R. R. Haley, president, Haley Wholesale Co., Inc., Santa Barbara, Calif.; Harold C. Muy, Little Rock, Ark., and Mr. McCreery.

A panel discussion, "The Next Ten Years-What's Aheacl for the Wholesale Distributor ?" presented as panelists

F. E. Dutcher, vice-president-sales, Johns-Manville Sales Corp., Building Production division, New York, N. Y.; G. Peter Oldham, vice-president-marketing, Allied Chemical Corp., Barrett Division, New York, N. Y., and Marland S. Wolf, vice-president-sales, Wood Conversion Company, St. Paul. Don Kr.recht acted as moderator.

-.Dutcher pointed out that our present economy is quite different than it was a few years ago as far as the building industry is concerned. "Today," he said, "we have high money costs both for new house financing and remodeling and repair-4 to 4i1% a few years ago and now 6 to 6l/i. This represents a 50/c increase." Hi said within 10 years the cost of construction labor has risen at least 25/o on an hourly basis.

In other words, he said, the suppliers of materials for the new construction market are in a squeeze because money and labor costs cannot be squeezed in an inflationary market.

Dutcher reported that between 85 and 90% of. TohnsManville_asph.alt roofing is sold through jobbers ; between 9_l and 95/o of all their insulating board pioducts are billed through jobbers; well over half of the rbck-wool products are still being sold through jobbers; between 90 ind 98/o of all asbestos siding sales are through jobbers, and the same situation exists in asbestos flexboard sales.

Asking the question, what can management do to make sure his business will continue to grow in the next 10 years, Dutcher answered:

1. You sl-rould annually conduct a very careful survey of y_our market and your customers to find out what high- profit items your dealers do not stock. This. then. shoild be the key to the products that are deserving of your time.

2. There is a trend on the part of many important wholesalers to go into the manufacturing and stocking of component parts of a house. There is no question that these components -c,an be produced in quantity far cheaper than they can at 25 or 30-difierent points through a territory. Is it not reasonable to assume, then, that th*e highly r".porl- sible building- materials distributor would bJ tie logical source to produce and distribute these components thrdugh his particular market?

3. The manager or owner of a wholesale company must be very sure that he has the right kind of a sales organiza- a big part in this program.

4. The wholesaler must do a better job of advertising his o.wn_products alrd service. One of the best ways of d6ing this.is by direct mail and Ta-ny of you do an outsianding jo6 in. tl-ris_re-spect. Sales training schools and merchandili"g clinics held in conjunction with your suppliers are also afi excellent way to build a good will witli -yorrr dealers. Be known a-s a company that is always trying to help your (lealers show a larger profit.

5. It.is.1lighly important that you analyze your inven_ tories of all commodities and maki certain ihat-you alwavs have them available when the dealer orders.

Oldham emphasized that with the 40 to 50 competitors lanufacturing materials in the building field, his problem ls to. hgure out how his company can iurvive in the com_ petitive picture. Those who will-survive, he said, musf be able to sense changes and trends.

Oldham pointedlut:

-the need.for specialization is greater.

-the distributor must not feellomplacent because he is told he is the most important spoke in the distribution wheel.

-the mediocre distributor will have a hard time to sur_ vive in the next five years.

He said the manufacturer must get maximum distribution at maximum return and the distributor must serve an eco_ nomical purpose and functional purpose by providing sales power.

"You sl.rould think of material as being solcl, not handled," he said. "You should ask yourself the qiestion ,Are we pei- forming the function for-which *. oi. in business?' 'We mu-st clarify the difference between distributor, wholesaler and jobber. You should think of yourselves as distributors because you are distributing for profit.,'

Wolf recommended that lease-back and field warehouse arrangements be -considered by many companies in the building material field as a means of increasing capital. He said one of the most important problems facing-the-building material distributor in the nexl decade is to -make sure hE has.enough capital to finance his business. He said companies can increase capital by channeling it from unproduc_ tive activities.

. {olf also e-mp_hasized the importance of budgeting and budget control. He said :

"At the end of each year, shipments for the following year

Source

lmported ond Domestic Hqrdwoods ond Softwoods for Every Purpose

All Species of Fine Cobinet Woods

Interior Poneling-All Species

Old-Growth Douglos Fir from Ross Lumber Mills, Medford, Oregon

Door Cosings cnd Stops Pockoged in Sets

Speciol Selection for Speciol Requirements-Widrhs, Lengths' Golors

Over Ten Yeors' Dependoble Service to Retqil Lumber Deolers

Modern New Fociliries for F-A-S-T DELIVERY qnd PICK'UP should be budgeted by product line and variety. Selling prices for each product should also be budgeted and thereby a budget of net sales built up for tl-re year. Both shipments and net sales should be budgeted by months, as should all operating costs. From budgeted net sales and costs, a budgeted profit is arrived at. Experience, both regarding costs and experlses on the or.re hand, sl-ripmer.rts and salei on .the other, should regularly be checked against budget, and variations both favorable and unfavorable should be analyzed and appropriate action taken."

In the annual report made on a two-microphone hookup by retiring president Don Knecht and S. M. Van Kirk, gen- eral manager of tl.re Association, they gave the following statistical roundup as of November 1st, 1959, of combined facilities and manpower of the Association membership:

Number of warehouses, 632; square feet of warehouie space, 30,658,2j9; nnmber of managers and salesmen,2,392; total of other employes, 8,216; number of carloads of building materials handled in 1959, 234,472; number of delivery trucks in operatiol.r, 1,896 ; averag'e monthly inventory, $147,198,744; total investment in leasehold improvements, warehouse ancl equipment, $119,400,288 ; annual sales, $896,953,992.

There have been 18 regional meetings since Denver and there have been many meetings with manufacturers and allied trade groups, reported Van Kirk, who said that President Knecht clevoted a week out of every month to travel for the Association, taking valuable time from his own business affairs.

Advance registration reached 600 and some 650 to 700 attended the banquet. Before the convention was over attendance reached an all-time high of 720, more than 25/c, over last year. Ladies registration was more than 135 and more than 80/t of the membership was at tl.re convention.

Dr. Kennetl-r N{cFarland of Tobeka. Kans.. educational corsultaut with General Motors Corooratiorr ancl acclaimed one of the outstanding speakers in the rration, addressed the convention bancluet. To the more than 700 attending, Dr. X'IcFarland said that for the first time in many years the free enterprise system is starting to function agiin', not only in this country but in lingland and Europe.

Harold rrAr. Sparks of the Lumberyard Supply Company, St. Louis, reportetl for tl.re Marketing Trendi Study Committee ar.rd said tl.re ltroblen'r of over production must be faced.

Walter E. Hoadley, Jr., treasurer of Armstrong Cork Compar.ry, Lancaster, Pa., told the convention that the new home building ir.rdustry has once again "bumpecl agair.rst a tight molley ceiling and can be expected to follow an irregttlar dowrrwarcl trend over the year aheacl-chiefly because of reclucecl availability of funds."

"Hou'ever, there is no evidence to inclicate any slackening in tl-re general desire anlo11g American families to ir.r.rprove the quality of their I'rousing, old as u'ell as rrerv," Hoaclley saicl. "Risir.rg incomes, increasing numbers of teerr-agers ir.r famili:s, more retirecl couples, ancl tl.re begirrning of a nerv

First Alqskqn NBn DA Member

The warehouse of the Palmer G. Lewis Company at Anchorage, Alaska, has been accepted as a member of the National Building Material Distributors Association, according to Don Knecht of NBMDA. He advised that the Anchorage warehouse had been ap- proved at the recent Board of Directors meeting in Chicago on November 16.

The wholesale warehouse at Anchorage handles a wide line of lumber and building materials and is so located as to provide rail, truck and air shipments to the entire state.

In addition to the Anchorage warehouse, the NBMDA directors approved membership of seventeen other warehouses, including three in Florida. Knecht reported that, with these additional members, NBMDA's total membership accounted for almost 700 warehouses in the continental United States. Canada and Alaska advance in the marriage rate, poir.rt to an expanded need for more adequate, attractively designed, ancl properly located hor.rsing for many years ahead.

Knecht also advised that a new committee would be formed in 1960-a Lumber and Wood Products committee-which would have a permanent chairman, hold periodic meetings and have a specified time for meeting. during the semi-annual conventions of the Assoclatron.

"The long-run outlook for new housir.rg is among the most promising for American business over the decade ahead," he said. "I)espite many old and new problems, 1960 u'ill still prove to be one of the best for the home-building irr dustry. "

William J. Guyton of Chicago, an associate of A. T. Kearney & Company, nlanagement engineers, told the convention that one of the keys to improved management control is an objective review of plans, facilities and ecluipment, controls and organizational strength.

Speaking on "\Arl-rat Makes a Star Salesman," H. B. "Doc" Sharer, sales-trair.ring specialist, U. S. Tires Division, Unitecl States Rubber Company, New York, N. Y., said a salesman sliould understand that he is selling people, not a procluct.

If a sales situation ends in a disagreement, he said, the clisagreen.rent is between people, not the procluct. Yet while a successful salesman concentrates on people, he said, the salesman must know his product :

-Product knowledge is an endless endeavor and a mediocre salesman usually has knorvledge o{ procluct but doesn't know holv to use this knowleclge.

-The customer lvallts to know what the product will do for hinr.

-A star salesman makes it easy for the customer to see the product arrd should lrot try to sell with empty hands and utords alone.

-Manufactllrers prepare literature for customers, not {or salesmen.

-A star salesman must know how to close a sale; to give a choice betrveen something ancl sometl.rirrg, not something and nothir.rg.

Following are comments, in part, by members who spoke at various business clinics:

Palmer G. Lewis, Seattle, Washington-Capital is the life blood of the busir.ress. Look at your operation like the bar.rk does. Have a maximum of money in bank at end of year to establish a good credit position. There should be a mir.rimum of inventory at the end of year. How you handle your borrorvecl money is the most important part of your business.

Don Knecht-If an item is not profitable you should buy

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