Lrumber Dealers Optimistic, But Cautious

By Jock F. Lumber Merchcrnts Associqtion

Retail lumber merchants in Northern California, getting their first breath of the pure air of free enterprise in many years, are inclined to look to the future as a challenge, and to watch very closely the trends and patterns that are forming in these first months of release from government control.

Since the demise of the OPA, greater quantities of lumber have begun to flow into the California retail yards, but the majority of the dealers have been cautious in their buying. Many have flatly refused shipments that were considered unreasonably priced. The prevailing attitude is to wait out the remainder of this year before doing any large scale ordering or buying.

A gradual shift is expected in the Northern California retail lumber scene with the fading seller's market of the past few years giving way to an increasing buyer's market, and as production increases there will be a proportionate increase in shopping around by buyers. Dealers in Northern California are determined not to be caught in the embarrassing position of having a yard full of high-priced lumber and being forced to sell below cost.

Increased competition will be given the retail yards by mail order houses in Northern California. This is especialty true in the building materials field. Many of the chain mail order firms are already well established in the roofing, paint, cement, nails, stock millwork, hardware, and pre-cut lumber business. To offset this expected competition, many of the dealers are enlarging their 1947 advertising budgets to allot more money to newspaper, radio, car cards, billboards and direct mail advertising than at any other time in previous years.

Manv alert Northern California retailers are planning to take more notice of their credit system in the months to come. Builders with overdue accounts will have a much more difficult time buying on credit than they previously encountered. In many localities contractors and others who orve lumber dealers for materials purchased on credit have already experienced this tightening up and have found themselves on a strict cash basis. This increase in the

Pomeroy of Northern Colifornicr, Fresno

standards for credit buying is accentuated during the present time when certain materials are critically scarce, and contractors are forced to leave jobs unfinished because they cannot afford to carry them until the shortage is alleviated. The lien laws that are now in effect are of no help to the lumber dealers in this instance because an unfinished house does not represent a tangible object and is not worthy of the full value of the mortgage. Hence the return of more strict credit systems.

The period that lies ahead for the California lumber merchants will be a "return period"-2 return to the job of selling, to smart merchandising, a return to better customer service, and, in general, a return to the prewar level of operating a business by selling quality merchandise at a reasonable profit. The return period may be Slow in coming and will have opposition from the unusual conditions of the times, but it must come.

The influx of ner,v products and commodities, developed during the war years as improvements or better substitutes, will definitely open new markets to the enterprising lumber dealer. There are numerous items already on the market that have turned the tide for many dealers in showing a profit when little or no lumber was available. But with the new products will come new problems in an increased inventory, in selling and in handling.

The general attitude among California lumbermen at the present is one of relief. The pressure of operating a business under government dictate has been lifted and a warranted feeling of optimism prevails throughout this section of the State. Although many shortages still exist and are hampering operations in many departments, relief is expected soon and many dealers believe their yards and stores will be well stocked by late Spring of next year.

The retail lumber dealers of Northern California are optimistic tou,'ard the future, yet cautious. They feel the period ahead will be one of tremendous grorvth and expansion but with keen competition growing with them. They feel that it rvill be the alert dealer r,vho takes advantage of all the merchandising and advertising techniques at his command will be the one to prosper.