Lumberyards build a defense against big box stores

In this era of big-box competition in the retail, local lumberyard employees need to know their stuff.

“Our lumberyard guys have all built their own homes,” said Larry Paulsen, president of Ogden & Adams Lumber in Cedar Rapids. “We have trained them to estimate.

“They can build a structure in their heads, write it down, note all the parts it will require and teach the customer how to do it.”

There is a place for big-box stores, he conceded.

“Our niche is selling quality lumber to people who want to build or renovate. We offer windows doors, lumber, siding, roofing, decking anything it takes to build house ...,” Paulsen said.

“It is more profitable to cater to the professional builder, which is 65 percent of our business. We do not carry electrical and plumbing supplies or landscaping materials or greeting cards.”

15 KINDS OF BREAD

Paulsen made an analogy to another kind of retail.

“At the grocery there are 15 kinds of bread. You can buy the cheap stuff or go to the bakery,” he said.

“It is the same thing with lumber - if you buy cheap lumber, half of it is warped, twisted or bark-edged. My contractors do not have time for that. My walk-ins will get lumber that is twice as good at the same price.”

Larry Parks, the third generation owner of Vetter-Parks Lumber Co. in Cedar Rapids, noted that “it is difficult to compete with the big box stores, who lure customers with a lot of flash and pizazz. We simply sell quality lumber from the Pacific Northwest, Canada, and across the country.”

Sales were steady until 2008 when things took a dip, according to Parks. Though sales have come back, they are not as good as pre-2008 sales.

Ogden & Adams has seen a similar trend.

"Our lumberyard does $6 million and up, but we used to do $12 million before 2005,” Paulsen said. “Actually, lumber is selling for what it did in the '60s and '70s. There has never been a better time to build since lumber materials are low and interest rates are low. You'd think everyone would be building now.”

GOOD AND BAD ABOUT GREEN

One factor these lumberyards have noticed is that their regular customers aren't necessarily buying based on price.

“The greening of the industry is forced on us by some suppliers who will only sell green labeled items - but oftentimes green costs whole lot more money and customers may not be willing to pay the price,” Parks said.

“What customers demand today is the lowest maintenance possible. PVC and vinyl decking, windows and doors, which is not always the least expensive route,” said Randy Rothmeyer, operations manager of Gilcrest-Jewett Lumber Co. in Marion.

On the other hand, Paulsen noted, “The production process of plastic and vinyl is not necessarily good for the environment.”

The green effort has stopped the deforestation of old growth timber, Parks said, “which actually emit less oxygen than younger second and third generation forests. Young trees grow more rapidly and they consume more carbon dioxide.

“Also, the fiber from second growth trees is not as consistent. Some of these trees grow like weeds and are turned into engineered lumber, which can also be full of glue.

“It may be a good product but, again, a lot of energy is expended to manufacture it.”

And, Parks added, “people who want this lumber will get it, even if the lumber is coming from the rain forests instead.”