FOR,R,EST VY.YYILSON

Lumber Retoiling in the Sixties

(Conknued, fro'n Page 77) industry in the future:

1. The dealer-distributor selling essentially to the large contracting trade and smaller retailers.

2. The supermarket selling essentially to the shoulder trade.

3. The remodeling specialist o\'vners. essentially to home

(a)

The dealer-distributor is the kind of specialist who can develop and prosper on a high volume, low margin business. His piimary customer group would be made up of the largei home builders and commercial contractors. He rvould have facilities for doing a certain amount of prefabrication for these kinds of customers. He would have sufficient buying power to purchase straight cars of various materials, inclu-ding specialties, and warehouse them for resale in a metropolitan area. The dealer-distributor also might provide a time and place utility function for smaller general line retailers in the area who would buy certain specialty products from this specialist.

(b)

The supermarket specialist is a true retail merchandiser' He should be the kind of merchant who can build a relatively high margin, volume business through the use -of specialiied products and services aimed ai the shoulder tiade customers. He should have an attractive store that permits full material display and a self-service type of shopping. The supermarket specialist should offer those services which the do-it-yourselfers and small builders require and are willing to pay for. These kinds of services probably would include such things as planning services, how-to-do-it meetings, special displays, consumer financing, credit and perhaps delivery. The supermarket specialist is more than merely a cash-and-carry operator who sells primarily on price.

The cash-and-carry dealer is an additional lumber specialist who may continue to provide only time and place utility in some locations but who probably will become a supermarket specialist and offer additional services. Just as the cash-and-carry grocery store in the early thirties developed into today's supermarket; in my opinion, so will today's cash-and-carry lumber store become tomorrow's lumber supermarket.

A type of lumber dealer who has an outstanding and largely untapped opportunity is the remodeling specialist. A dealer who has a relatively small general-line establishment in a metropolitan area and who feels about to be squeezed out by the large specialized dealer-distributors and supermarkets may find his place in the sun as a remodeling specialist. This dealer has the unique opportunity of being able to control the use of materials supplied by himself at prices with a full margin. In addition, he is in a position to make a profit on the labor portion of the remodeling contract. Those dealers who do not feel they have the financial requirements, the desire, or the risktaking disposition to become a dealer-distributor or supermarket may fit the requirements very nicely for comple- menting their lumber business with a remodeling business.

(d) The General-Line Dealer

The general-line dealer will no doubt continue to be the predominant type of retailer in the rlrral areas. if he provides for the customers' total needs, he probably will do well. There will be a number of general-line dealers in metropolitan and suburban areas as well. These dealers may be casualties o.rer the long term, however. The rural or semirural general-line dealer probably will continue to serve the contractor and shoulder trade, but in my opinion 'r,vill corne to_ depend more and more on a small contricting function of his own. A contracting side-line may be partil cularly appropriate for those dealers who orin land in their communities.

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It. seems perfectly logical to me that the general-line retail lumber dealer in the smaller cities should-ofier a full line of services to the ultimate consumer. Who is in a b_e_tter position to perform a complete remodeling service ? rrArho is in a better position to build a custom home ? Vertical integration is as much an opportunity for the lumber dealer who can become a builder and thus control the use of his materials as it is for the builder who oDens a retail lumber yard to buy materials at lower prices.- The day of the general-line dealer is not past. He should have a bright future, but he must do more than merely make some products available to whoever comes along.

WHAT KIND OF A DEALER ARE YOU?

Based on the above descriptions of the four kinds of lumber dealers, what kind of a dealer are you ? More impor- tantly, what kind of a dealer should you be ? To help answer this question you may want to complete the following check list. Check the descriptions that most closely describe your business. The type of dealer category within which they cluster will indicate lvhat type you are. Do you see any opportunity in remaining this kind of dealer? If you are satisfied with your present situation, are you adecluately fulfilling all of the appropriate criteria?

If the check list answers indicate a change to your present way of doing business, are you willing to accept that challenge and the attendant risks? To me, lumber retailing offers one of America's great business opportunities-but only to those dealers who have the vision and the courag'e to convert that vision into reality. What is your place in the sun ?