Our Fragmented Industry

Monday, June 15, 2015
“Our Fragmented Industry”

-- Al E. Bavry, CEO, Kimal Lumber & Hardware
I don't think anyone would deny that as independent lumberyard owners/managers/operators, we are among the most creative, unique, and entrepreneurial bunch of folks in business in the country. And I'm not talking about this as a "Guy" business. Some of the most creative owners are women. If you were to have an opportunity to travel around the country and visit one hundred independent lumberyards, you'd come away from it with the observation that you'd just seen “One Hundred Unique Operations.” Chances are you would have observed a true uniqueness in each one...Something that stands out from all the rest.
When I started in the industry about 54 years ago, in Sarasota, I worked for a gentleman by the name of Billy Sullivan who owned (at the time) a pretty unique Redi-mix company. He put a deal together with Peter Fuller, who was heir to the Fuller Brush Fortune. They started to build a very unique lumberyard. (A story for another day, where they built a “Mono-Rail” system in their yard and warehouse to move materials!) Eventually they planned on controlling their lumber sources, build trusses, and other components, and incorporate Redi-mix, fabricated steel, and many other components into the mix. Their goal, 54 years ago, was to be truly a "One Stop" operation for the local building industry. They saw a “National Footprint” in the future. Instead, they actually lasted about two years and then "Crashed and Burned"...because they forgot to do their most basic homework. By basic homework I mean they needed to "Learn" that every market...in our case, Manatee, Sarasota, Charlotte, Polk, and other surrounding counties…was "Unique." They failed to acknowledge or adjust to the total differences in the market that existed county by county...for example one county using Galvanized nails only, another county nothing but "Brite", 35# to 47# loading on trusses in one county, 55# in Sarasota county, just to name a few of the simple differences.
It turned out that Billy Sullivan and Pete Fuller were “so into themselves” and the “brilliant” plan they had devised, that they assumed after they build it, all would come. And one of the strategies was to start off “selling cheap” to wipe out local competition, and be the only force left standing. Does that sound familiar? Over those 54 years I've been in the industry, how many have tried to be “The Only Giant Left Standing?” I worked for Wickes for 11 years watching a company starting with a pretty sharp focus to “Go South Quickly, and Die”...West Building Supply, Grossman's, and many, many others had the same story. And you know what has happened recently...and that game is still very much in play.
My guess is, when the dust settles in the near future, for the most part, the “Independents” will still be alive and well. So the Dirty Little Secret is right there in plain view...and always has been. Every market is unique and different in our industry. TRULY, CHAOTIC FRAGMENTATION…not a lot of commonality. Those of us that survive know how to take what is unique in our backyard situation and run with it. I won't say it would never happen, but to take a company with a “National” footprint and adapt it to the local market remains as elusive as ever. So my real message is to celebrate and build on our Fragmented and unique Industry. When you look at the giant food Super Stores, furniture, computers, etc. that have consolidated and grown huge, we stand alone...Concentrate "Locally" and we'll all continue to be strong. Build on that "FRAGMENTATION."
Al E. Bavry, CEO 6/15/2015

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