Lumber and building materials (LBM) distribution, a $120 billion industry, is part of the larger building products industry in North America. Channel participants handle a range of products from basic materials of construction to highly branded manufactured goods.
The industry holds substantial potential for profitable growth over the medium- and long-term based on improvements in remodeling and commercial spending, increases in U.S. population size and age, existing housing stock profile, and favorable lending markets.
A number of market conditions and trends are providing tailwind for profitable growth in this industry. A greater demand for housing and remodeling projects, combined with concentration among distribution’s customer base, contribute to the expected growth and profitability in LBM distribution.
LBM distribution companies are adding complementary product lines to leverage cross-selling opportunities with existing customer relationships. Distributors and dealers are also looking to “out of category” products to reach customers in brand new areas that are not traditional LBM markets. An increasingly larger segment of LBM distribution has manufacturing capabilities including roof trusses, wall panels and stair production, with installation service available.
In addition, value-added services such as direct takeoffs from building plans, quick-turn jobsite deliveries and advice on project design are offered to generate revenue and build customer loyalty. Merchandising, including product showrooms and vignettes, are also a growing trend among more progressive distributors and pro dealers to reach builders and the trades, as well as property owners, to grow their businesses.
Ken Jacobson, a Partner at Principia, adds, “Distributors and dealers are carefully reviewing which products represent the best margin opportunities and how to support these products with current and prospective customers. This program will pinpoint where and how channel dynamics are likely to impact strategies for both manufacturers and distribution, and where alignment opportunities exist.”
Lumber and Building Materials Distribution 2015 provides a baseline analysis for business planning for industry participants. Using 2014 as its launch point, the study is founded upon primary research that includes probing interviews and surveys conducted among more than 1,000 value chain participants and will identify the best growth opportunities through 2017, strategies for value creation and competitive advantage, and the changes in distribution channels for products serving the LBM industry.
Subscribers also have access to Principia’s proprietary market model and forecast tool. This powerful new web-based tool is designed around best practices of data visualization and usability. The online platform enables users to log in from any desktop or mobile device to access all of the data from the report, with the added ability to instantly customize the data views and integrate with their own information.
Further, subscribers will have access to an online database of over 20,000 North American distribution outlets. The searchable database will enable users to assess key building product manufacturer relationships with wholesalers, lumberyards and specialty one-steppers with details along the following parameters: distributor name, location (city, state), channel type, product categories, and major suppliers.