Those 2Vz million 'used' homes sold in '66can be good dealers'business source

T|HINK OF IT! Two and a half milr lion lamilies will move inlo "used" houses this year, according to an estimate from the National Association of Real Estate Boards. That's 2r/z times as many as those moving into new houses.

Remodelers can look at 2t/2 million older homes as ripe prospects for business on just one premise: Every incoming family will want to make some changes.

The outlook embraces everything from repainting to a room addition.

And, when we sa,y "rernod,elers," too many lumber d,eal,ers still think ol somebody else, when actunlly they shouJd Iook into their own minors.

First, dealers have all modern building materials for any remodeling job. Second, they have the know-how from wide experience with contractors and other tradesmen. Third, more comprehensive know-how is readily available to dealers who want it.

Profit Plqn Needed

And fourth, setting up a remodeling department and running it profitably on sound business principles has become a proven marketing approach in the lumber and building materials business.

Here's a case in point.

A midwestern lumber dealer purchased the DSC-HIMC ooProcedures for Profit" plan developed by Herbert Richheimer, but he neglected to act until unexpected competition forced him to do it.

He reported: o'We suddenly were threatened by the unorthodox merchandising methods of two competitors. Then and there we decided to meet this competition by selling service, not price. We found that the only efiective way of setting up a remodeling department was by following the oProcedures for Profit' plan.

o'In just a few months, we have sold a number of remodeling projects and have established our yard as a remodeling center. We know our customers are satisfied because they have sent their friends to us, and we have sold them improvements, too.

"We feel that a good remodeling department, run efficiently by a lumber yard, is the insurance we need to stay in business."

Having his own remodeling business is important to the lumber dealer for various reasons. These include:

(l) Survival, as in the case of the midwestern dealer quoted above.

(2) Greater profits for your business. This includes a normal contractor markup on materials, plus a profitable markup on the labor and installation.

(3) Service to your community. Soundly-based "remodelers" are much in demand. A well-run remodeling business can very well become the tail that wags the dog.

[et's Push Remodeling!

You might have guessed by now that I'm urging gualified building materials dealers to go into the remodeling business-or at least diversify in this direction. We have seen in the past few years how important it is for building products retailers to give the public what it needs and wants. More and more yards have become virtual department stores. This is not always possible, of course, but any alert dealer can get into the remodeling business on any scale he desires and make a good profit from this activity.

The years just ahead are going to be a real challenge to the dealer whether he has augmented his activities since World War II or has stagnated. Unless he grows with the population and its needs, the dealer eventually will succumb to progress. The battle for a share of the consumer's available dollars is going to become even more rugged as automobile and TV dealers vie with travel agents and other vendors of big' ticket items.

But remember: 'oHome" still is the most important word in the American vocabulary. Home ownership is growing steadily.

Many dealers can sell their share of the building products going into the 1 million new homes to be occupied this year. A great many more of them can claim a share of the remodeling business (2t/2 million prospects here) if they're equipped.

More famiiies are going to be formed in the next few years. It'll pay the building materials merchant to be ready. They're going to spend a lot of money on remodeling if the remodeling dealer can convince them and then can deliver the goods.

Prepore for the Fulure

Census bureau projections say more than SYz million additional households will come into existence between 1965 and 1970; that's an average of around I million a year. We can accept these figures on a well-educated estimate. The point is:

W'hat can and should be done about it?

To compete and to survive, the dealer of today must make plans for tomorrow. In my opinion, based on close observation of the market over many years, opportunity for profitable business in the coming years lies in diversification -especially in remodeling. Already the established dealer has built a sound reputation in his community. He's known to his customers. To meet the demands of the computer age, however, he can't rely on his present clientele, which is ever-changing, increasingly sophisticated, more and more torn between all the tempting ways to spend its money.

A Well-Greosed Trqck

Thus, to stay ahead, the successful western dealer will have to increase advertising, promotion and services. Having a remodeling department run on a well-greased track makes possible an excellent answer to the problem of supplying service at a profit.

Earl W. Hadland' the author ol this thought-prouoking article on the dealer's need to be in remodeling up to his ears, is the general merch,andising mnnager ol the Masonite Corporatinn. -Editor.