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While competition with large national chains is nothing new to independent dealers, consumer concerns about inflation and rising prices has made vying for business even more difficult.

“We face an increasingly competitive environment in our local market. We have the capabilities and the capacity to serve builders, but frequently can’t get past the larger, national chains operating locally, taking projects at significant discounts. We’d love to learn how other dealers compete effectively against much larger competitors.” How would you respond to a dealer who posed this scenario?

Responses from lumberyards, full-line building material dealers, and specialty dealers/distributors:

“We specialize in post-frame building materials and in that niche we are able to compete with larger suppliers.”

“We are located in a rural area and primarily serve rural and agricultural builders.”

“We have a corporate company culture on customer first service where we try to be legendary in the level of service we give all our customers from the retail stores to our jobsite deliveries.”

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“We belong to buying companies, which helps us stay competitive on price, we give great service, and people save two hours of driving time by buying from us.”

“Better service during and after the sale.”

“To stand out from our competition, we strive to make a personal connection, and become an invaluable resource. Utilize technology to be our most efficient and work as a team from sales to yard and delivery.”

“Service levels that offer value.”

“Honestly, we don’t try to compete with the larger chains. We do what we do best and that’s offer great customer service, stay on top of the most up-to-date technology to benefit our customers and employees, and focus on making lasting relationships. We’ve never claimed to be the cheapest but strive to live our Service Promise and Value Statement in each situation.”

“There is nothing that Builders FirstSource, US �鶹��ý, 84 Lumber, etc. can do that an independent can’t do better. You mentioned price in your question. Okay, remember that you have that weapon too … and sometimes you have to use it.”

“We struggle with that exact same problem, also keeping CDL drivers who are in very short supply.”

“Focus on your strengths or create an advantage. Large nationals aren’t known for high quality, just low prices. Don’t join the race to the bottom. Spend time sourcing quality material. Don’t cut corners. Make every sale profitable. It’s okay to make fewer sales at a higher (or more appropriate) margin. Laser focus on quality material and superior service. Then focus on the customers that can appreciate that and offer the same to their customers. Promote this advantage to your market and make sure the end consumers can see it too.”

“Sell in service.”

“Find out all their details: What product(s) are they selling and how do they compare to yours? How are they buying? Do you share wholesalers and would a conversation with your rep help? How do your delivery fees/scheduling/flexibility compare?”

“We stay fairly competitive price-wise with the larger chains, but where we beat them is with delivery and service. We also have very knowledgeable sales people vs not being able to find someone to help you in the large chain stores.”

“Keep quoting and try to sell your service and competency for handling large projects.”

“Better service/expertise and quality products.”

“As an independent gypsum specialty supply location, we compete against the top national chains in the same industry. We lose out on some of the huge projects simply due to national-level price advantages and the sheer volume of material. On all other projects, we can get close to the winning number. To compete with these folks, you have to be better and faster at the things they’re good (or not good) at. For example, they have a corporate safety program, so you build yours to match or surpass theirs. Since your competition sends all quotes to corporate for pricing, it takes them 48 hours to get a quote back to a customer. So, you make your window 12 hours. Also, make one of your goals perfection in regards to shipping and billing accuracy.”

“Ask questions of customers to seek if discount dealers have issues with service.”

“Remind your customers about how you’re saving them time and headaches when pricing issues come up. As for your vendors, you have to be the squeaky wheel and don’t let up. Try to partner with ones your competition doesn’t use and don’t be afraid to put a longtime ‘old reliable’ vendor in the penalty box if they’re not helping you. My last advice is to embrace being the underdog … you won’t win them all, but the ones you do will be sweet.”

“It’s about serving the customer and providing a personal approach to their projects. We get to know our customers and it’s not all about price. You have to compete on price to a certain level but if it’s close it really comes down to service.”

“We are good at our specialty.”

“Be more nimble, out-service the competition, and care about your customers. Be the best you can be.”

“One of the biggest hurdles we face is not being able to be competitive with the big chains from a price standpoint, but rather the perception that because we are an independent, local lumberyard, people are often under the assumption that we are automatically more expensive than the big guys.”

“Offer exceptional service.”

“Service, service, service. We do complete take-offs and turn them around quicker than the big boxes can. Most of our deliveries are same or next day on lumber because the big boxes can’t react that quickly.”

“Any customer that buys on price alone may not be your customer. Focus on customers that are in line with your value proposition.”

“When you hear of a job that was lost to another company, be upfront with the contractor and ask what they did that you didn’t, was it pricing or service? This will in turn build a relationship with that customer above the big stores. We all know they don’t get treated at a ‘human’ level at the big stores. Also, tell your front counter to greet customers by first name every time they see them. This creates a welcoming feeling, which is also not received at the big stores.”

“Superior product knowledge and customer service.”

“We offer the builders a lot of customer service and many years of experience to assist them with projects that big box retailers just don’t have around here. We do not focus on the discounts that builders get from those places, but on the one-on-one interactions we provide to them. We keep a list of contractors on hand and go through it every fall. We give about 40 contractors a $25 gift card in a Thanksgiving card to the grocery store closest to them. Then we also give them a hand-delivered Christmas gift with our logo on it, i.e. sweatshirt or this year a sports chair. We choose to spend money on the contractors by thanking them in this way. We have some new builders in the past couple of years who have specifically said how much they appreciated being appreciated by us.”

“One of the ways we compete is with higher levels of service, specifically more knowledge about the product and its application. We also buy as strategically as possible to level the margin playing field.”

“Know what you are and know what you aren’t.”

“Just keep trying/find a niche.”

“We distinguish our company by providing more services and financing than our competitors. We don’t try to compete with the bottoms feeders. We have learned that builders who always want the rock bottom price will never be good profitable customers, so let someone else lose money trying to sell to them.”

“Our outside sales team prices to where it needs to be to win.”

“We definitely rely on our knowledge, prompt follow-up, and expedited delivery capabilities.”

“Service, you can’t beat them on pricing.”

“Pick your battles. Try and go after work that they aren’t interested in. Find local builders to work with, partner with them, and service them to the best of your abilities. The big jobs always look intriguing, but no one makes money on them by the time they beat you up on price.”

“On-time delivery with no mistakes.”

“Focus on custom builders. Focus on homeowners by changing the way you market your business. Look to schools and civic organizations so homeowners know you are present in your community. Make a point to market yourself differently.”

“Provide service, have knowledgeable sales staff, and stay in front of the customer.”

“There is no silver bullet—it comes down to continually working on building relationships and being ready to jump when an opportunity presents itself. The big guys will mess up eventually. When they do, take your shot and impress the customer. Consistently outperforming and out servicing your competitor is the only way. You will never win on price so don’t try, but you have to be close. Almost equally important is evaluating your operation. Make sure you’re not beating yourself first. You may have to change how things ‘have always been done’ to stay competitive.”

Responses from wholesale distributors, manufacturers, and service providers:

“It isn’t hyperbole to say if the price difference isn’t in the 25-50% range with a big box/national chain, it simply isn’t a better overall value. This is of course true in terms of service but it may be most prevalent when it comes to billing. The time invested dealing with these billing departments can be a hidden expense that often goes unaccounted for.”

“Adapt and change approaches to your strategies. Whether that be alterations to your supply chain processes, adopting new technologies, sales tactics, etc. Overall, becoming more creative will open up new avenues.”

“Relationships backed by products with a proven track record of success and first class service.”

“Lead with value and service first. Price will only be an issue in the absence of those two offerings.”

“We try give the fair prices along with quicker service. Personally as a sales representative, I keep a professional etiquette with the competition.”

“Everyone needs to make a profit. Don’t be fooled by some of the discounts that are thrown around by the large chains, deliver what you promise, more often than not they can’t. Don’t be afraid to go after the big stuff, just don’t let them down and more will beat a path to your door. We have done it too many times to count and we are operating out of one location but are shipping products nationally.”

“Leverage superior service, support, and relationship building, show how you can be more flexible than larger organizations. Stay close and wait for opportunities great or small to service the builders’ needs or be the person that picks up the pieces when others stumble.”

Which of the following best describes your primary competition?

Comments from dealers:

“We are the only lumberyard in this town, but we have several big box stores 50 miles away.”

“Amish lumberyards.”

“Two competitors would be Supply houses and White Cap.”

“Specialty 1 Step, Roofing, Siding Deck.”

Comments from vendors:

“Equity-owned manufacturers.”

“Consolidation and mills.”

“Other lumber treaters/manufacturers.”

“Technology/POS systems.”

“Other manufacturers.”