Home Industry News REAL ISSUES. REAL ANSWERS: Razor Thin Margins



“Develop better, deeper relationships than your competition has with prospects and customers.”

“Focus on finding fresh opportunities and developing them. The way you’ve always done it isn’t necessarily the way you should keep doing it.”

“1: Try to find unique/niche products or services that allow you to be different from the competition and use this to increase margins. 2: Monitor inventory levels in regards to projects sold and try to do direct load purchasing or take the time to manage purchases and not be forced to do emergency buying. 3: Take advantage of margin sales training from the experts. Picking up on one new practice can help turn margins around.”

“Retire and let the young bucks fight it out.”

“Throw out slow moving products and categories, and pay more attention to what you do best, and that earns you the best margins. We got rid of paint, plumbing, and electrical, since the boxes do a great job with those categories. There are many items that offer higher margins if you really look. Push quality and service, many competitors don’t care. We are 80/20 trade to consumer. We let the consumer know we are there for them and we’ve worked to grow that part of our business—without downplaying our attention to procustomers.”

“Always stay in communication with the customers who are not currently buying from you because of price. Stay in front of the buyer and check to see if they are being serviced promptly; if not, that may be your approach to communicate about your service. Evaluate the situation and show them how you can be of help. Waiting on material can be extremely costly for builders. Follow through and earn their business!”

“Get in a specialty market.”

“Do not shrink your sales force. Keep investing in them with effective sales training. We tend not to spend money on sales training when times are leaner. Now is the time to do that. Always look to improve or expand your sales force. Keep your current sales accountable to their goals. Don’t make excuses for them in a soft market.”

“If your lumberyard is struggling to get by on razor-thin margins today, then that means you weren’t adding enough value to justify your higher margins yesterday. We don’t stay in business by having the lowest price; we stay in business by adding the most value for our customers.”

“Manage your expenses while going after sales. Sell service, not product. Everybody can sell a 2×4, but not everybody can sell and deliver service.”

“Diversify and adopt the technological tools that will allow for more efficiency within your company.”

“In the past year we have changed all of our dimensional lumber from #2&BTR to Appearance/Premium grade lumber. Doing this has allowed us to move away from the price game and work on selling quality and service, which is what most of our builders value anyway. The Appearance/Premium product is harder to find, but so far we feel that it is making a difference.”