Manufacturing Success

Primary business emphasis of the ProSales 100

65 o/c Dealer with manufacturing o capabilities

26% Dealer without manufacturing capabilities

9% specialty dealer/ distributor

SURVEY BASE: PROSALES 100 TOTAL RESPONSES: 100

Remodelers Move up Remodelersgrewtoaccountf~r

19% of PROSALES 100 companies

business in 2010, compared to 15% in 2009. Meanwhile, the percentage of business from single-family custom builders has fallen to 34% vs 35% in 2009. Note: Several Top 10 companies-some of which are known to be deeply involved in component manufacturing and installed sales-didn't answer this question.

Revenues by market segment

34 o/c single-family custom o builders

19% Remodelers

9% Single-family production builders

I

I . . ,,~"I

SURVEY'~~) SE:/PROSALES lOU: TOTAL RESPONSES 85

., " I

',f'r 1,1'

• '~'I ·1~, .

9% Consumers/homeowners _;_____.,- 8% Commercial builders 4% Installed sales

2% Building materials dealers

More Up Than Down

Sixty-four members of this year's PROSALES 100 reported positive sales growth in 2010, compared to only six last year. Of those on the upside, 31 posted increases of at least

10%. On the other hand, 32 companies dropped from 2009's sales levels.

Number of ProSales 100 dealers tallied by sales growth between 2009-2010

9 1YS to 20% growth 22 zero to 10% growth 3

10% to 20% decline 4

SURVEY BASE: PROSALES 10U; TOTAl. RESPONES: 1(JU

Growth S P u rt An overwhelming number of PROSALES 100 dealers

are predicting growth of some form or other In particular business segments over the next five years, particularly in multifamily and retail sales. Then again, hope springs eternal-virtually nobody expects declines in any category. Top response for each business segment is highlighted.

How ProSales 100 dealers see segments of their business
growing over the next five years
More 5% Zero Zero 5% More
than 10% to 10% to 10% No to 10% to 10% than 10%
Business segment decline decline decline change growth growth growth
New home building 1% 1% 0% 30% 19% • 15%
Remodeling 0% 1% 0% • 22% 24% 10%
Retail sales 1% 0% 0% 10% 23% 8 24%
Multifamily 2% 2% 0% 7% 28% " 25%
Commercial 0% 1% 1% 27% 8-30% 4%
Installed sales 1% 0% 0% 16% 33% 13%
Component manufacturing 1% 0% 0% 17% 26%-. 17%
SIJP\iI:Y BASE: PROSALI:S 100; TOTI-\L RI:SPONSI:S 83 TO 88; DUI: TO ROUNDING, NUMBERS IN SOME BUSINI:SS SEGrv11:NTS DON'T TOTAL 100% Same Products, More Services

PROSALES 100 members offered the same products at about the same rate this year as last year. Meanwhile, contractor services continue to rise as it becomes clear that such offerings help set dealers apart from competitors. Over the past five years, training programs have undergone an eight percentage point rise, while the use of volume discount programs have risen seven percentage points.

Product categories sold by the ProSales 100

Doors, exterior

96%

Siding Decking

95% 95%

windows Doors, interior

94% 94%

Lumber, treated Lumber, engineered

91%

Lumber, dimensional Molding/millwork

91%

90%

-- -- -- -- -- -- -- -- -- ---

SLJR\i!:::Y BASE: PROSALES 100; TOTAL RESPONSES: 9J

o trac or servic so fer bv t

roS les 0 a

Contractor services offered by the ProSales 100 and future plans to expand offerings

Service

Already offer

Future plans to offer

t 99% I

1%

Same-day delivery

--------- -- -- -- -- -- -- -- -- -- ----

Showrooms

--------- -- -- -- -- -- -- -- -- -- ----

Volume discounts

--------- -- -- -- -- -- -- -- -- -- ----

Blueprint takeoffs 2%

--------- -- -- -- -- -- -- -- -- -- ----

Training programs 11%

--------- -- -- -- -- -- -- -- -- -- ----

Installed sales

--------- -- -- -- -- -- -- -- -- -- ----

Rebates

--------- -- -- -- -- -- -- -- -- -- ----

Co-op advertising

. 92% I •

2%

" . 90%

2%

12%

, 67%

2%

61 %

Whole-house engineering Construction services

--------- -- -- -- -- -- -- -- -- -- ----

Financing programs 7%

--------- -- -- -- -- -- -- -- -- -- ----

Whole-house design 12%

37%

38% _

8%

SUR\/EY 8;;St:: PROSALI:::S 100: TOTAL RESPONSES: 85 TO 9CJ

Installed, Not Stalled

Those dealers who say they do installed sales are continuing to push these services, with 13% predicting growth of more than 10% over the next five years. Another 33% say they expect their installed sales to grow between 5% and 10% during that same period. Meanwhile, 37% expect zero to 5% growth in installed sales. Only one company expects a decline in installed sales. As for the categories themselves, cabinetry was the most offered installation service with carpet installation not far behind. Framing is in third, but 10% of respondents plan to offer it in the future.

Installed sales programs offered by the ProSales 100 and future plans to expand into those categories

Installed sales program

Already offer

Future plans to offer

Cabinetry

: 54% \ ."'<B

8%

Carpet installation

, .53%.

Framing Bathroom vanities

Mirrors

. 35% I

Entry doors 6%

---

Floor trusses 12%

---

Roof trusses 8%

Stairs 4%

Locksets/hardware 5%

III 37%' _

Siding 11%

Interior doors 5%

Wall panels oiiiiiiiiiiiiiiiiiiiiiOiiioiiii~iiiiiiiiiiiioiiiiiiiiiiiiiiiiiii--=~7~%

------- ------

Insulation

" 28% I

4%

Whole-house

. 28% I

1%

Roofing

27P1o

1%

:======--

1%

---

3%

Shelving

25% !

Decking

23%" •

Molding/millwork

16% ...

6%

Windows

3%

SUR',,/EY BASE: PROSALES 100; TOTAL RESPONSES: 70 TO 83

The Downfall of Components

Component manufacturing services have continued to decline over the past year at PROSALES 1 00 dealers, probably because of the plunge in new-home construction. Still, most who are in the business look to gradual expansion in coming years. pre-hung doors continue to lead the way.

Component manufacturing activities by ProSales 100 dealers

Type of component

Already offer

Plan to offer

Pre-hung doors

Roof trusses 3%

Floor trusses 0%

==:~w~a~11 ~pa~n~e~ls~iiiiii~~ i' 'iiiii~~~5_o/c_o _

Pre-built stairs 4%

Windows

'~ .- 54% _

6%

_" w23%

0%

SLJR\i!:::Y BASE: PROSALES 100; TOTAL RESPONSES 74 TO 78

Growth expectations of the ProSales 100 for their component manufacturing operations

57% Gradually expanding

30% Don't offer component manufacturing

8% No change

5% Rapidly expanding

SUrI\iEY BASE: PROSALES lUO TOTAI_ RESPONSES: 79

Tech n i ca I Growth This year, 43% of the PROSALES100 say

they plan to spend between a quarter

percent and a half percent of sales on technology and computer system products and services. Last year, only 33% of PROSALES 100 dealers were willing to spend that much. Meanwhile, the share of those willing to spend more than a half-percentage point of revenue has decreased to 25% of the total from 31 %. The services offered (see page 60) have remained mostly consistent, with plans exceeding realities.

Percentage of sales that ProSales 100 dealers plan to spend on {; technology products and services over the next year

43% 0.25% to 0.50%

33% Less than 0.25%

;~ \ I,

'1'11

., I

',I} ~I

SIIR EY BASE PROSALES 100 '.If ~. ~;~ J'

TOTAL RESPONSES 77 • ;, 'IJ. ,

l ~ :l i :/I'J c· ~

~ If"~ ::': ,

' -t,1 1:1 \

, " .~,,~ •• , -- I

2% 076%to 1%

.i

.' '"'I: ,,:~,

Online/e-commerce services offered by ProSales 100 dealers and future plans to expand offerings

Service

Already offer

Future plans to offer

Corporate Web site

'95% ' .

1%

Customer account access iiiii~~~~:::::::::~~' 46%

/,~;~.j Inventory/pricing via e-mail __ __ __ __ __ __ _ _

/} .f . Order tracking 49%

, £,.,.::;.' ~~o~n~lin~e~p~u~rc~h~a~se~o~r~de~r~s :!!!' .!~~~:~~~~~~ 45%

I ." ~ : •• Electronic data interchange 32_% _

':;: c· 'I Online inventory/pricing

Online payment

35% " ~. 11

, "".

Online invoicing Online store

-! ,",

.", '!.-.,

SURVEY BASE: PROSALES 100; TOTAL RESPONSES: 73 TO 80

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