Rightsizing Green 

American Lumber Company helps dealers manage
recession-sized inventories with their Small Order Initiative
 
You might think of it as the ‘Not So Big' sales strategy, but it's a very big part of how this Walden, New York, wholesale lumber yard goes to market. “We launched our small order campaign in direct response to the depression in home building,” says Joshua Kaye, Marketing Director for American Lumber Co. Inc. “The original campaign idea was a pledge of allegiance to lumber and building material dealers: to help them manage the lean years, and make smaller businesses part of that. But we ultimately felt that ‘We want your small orders' was the one thing dealers really needed to hear.”

As it turns out, this wasn't an entirely new policy. They had been doing it anyway – packaging job lot orders and combining small quantities of multiple items to create shippable pallets. “Our operations are built around that, and we know that these services are now more valuable than ever,” said Kaye. 

That's a smart way to develop relationships during a slowdown. Ideally, customers will recognize that if your company is equipped to manage small orders, getting the big orders will be easy. 
American Lumber services a dealer network that ranges from Baltimore to Boston. This company is located in Orange County, NY, at the point where I-84 and I-87 intersect. Their facility consists of 22 rail-sided acres and includes 4 covered buildings, the largest of which approaches 100,000 square feet. Sales are in the middle-eight figures and daily truck depart­ures number in the mid-teens.

This family-owned company started in 1918 and has already survived a load of depressions and recessions in the nine decades following. After World War II, American Lumber Co. focused entirely on sales to retailers from its wholesale distribution warehouse operations in the northeastern and mid-Atlantic U.S. 

Joshua joined the company in 2004 after earning an MBA and on the job education from a previous career as a turnaround specialist for a large retail chain. “I have American Lumber in my DNA, obviously,” he chuckles. “My father [Barry Kaye], is the 4th generation owner of the family business.”
 
Rightsizing FSC orders
The small order option may provide some valuable extra support for FSC Chain of Custody dealers. For many yards, stocking large quantities of FSC lumber would be a burden when they're trying to keep their overall inventories lean. “We've been told by multiple customers that they can get one FSC item or another elsewhere but they often have to buy whole pallets,” said Kaye. “Builders don't want to buy the excess. And besides, when someone is motivated enough to seek FSC certified material one thing they don't want is waste.”

For dealers, a ‘just-in-time' inventory approach only works if you are confident that you can indeed get that inventory in time for your customer. “With FSC – in terms of specialties, which is what we sell – it had been very difficult to source in the past,” said Kaye. “There are so many different items, and even people who dabble in FSC don't carry enough to really be a reliable source of FSC. We've worked very hard to overcome that and be at the point where you can have pretty good faith that if you're looking for something we're going to have it.”

From Kaye's experience, if somebody calls a lumberyard for a quote on FSC materials – and they can't quote on it – that buyer will be calling somebody else. “If you can quote on it,” he says, “then you're keeping the business in your own house. It's our job as a wholesaler to make that possible for them.”

American Lumber earned their FSC COC in 2007, and Kaye believes they were the first wholesaler of its kind to do so. “The process wasn't particularly hairy, it was more of a process of learning all the relevant acronyms,” he recalls. “But that was good for us, because we were some of the first people who really understood what was going on with FSC and what we would be able to accomplish, and that put us in the right position to be able to speak with our customers about it.”

While some FSC wholesalers will deliver product to the jobsite for clients who don't have their own COC, Kaye thinks that's a bad idea. “We won't do that,” he said. “We would hate for one of our customers to see one of our trucks pulling in to a jobsite and be concerned that we were selling around them.” In fact, for many years American Lumber didn't have their phone number on their delivery trucks for fear that end-users might try to contact them directly.

With Kaye's background, dealer support extends into marketing support. “We have had a lot more interest lately from dealers, who want to talk with us about their strategy and marketing plans for green building and certification, and in more concrete terms than they used to,” he observed. “It used to be dealers would ask ‘What's this certification stuff, and can you tell us about that?' Now it's more like, ‘How do I win orders with FSC Certification' or ‘How do I achieve my strategic marketing objectives.'”
 
Building a Green Mix
In recent years, American Lumber has developed a repuation for an array of products that can contribute to green building certification. That includes the QuietRock soundproof drywall line; Armorcoat's pre-primed trimboard; the Ashton Lewis line of certified yellow pine flooring; PureBond's NUAF hardwood plywood; and two different lines of certified cedar. “We're known to be leaders in Western Red Cedar and pine,” said Kaye. “In terms of what's hot right now, there are a lot of innovations in trim; we supply zero-VOC factory primed pine and poplar, which are very current.”
 
Kaye is especially gratified by the dealer response to the NuCedar line. “It's a cool product, and they have shingles coming out which look fantastic,” Kaye declared. The product is composed of 20% recycled material, comes prefinished in a VOC compliant coating, and even has some energy saving claims. “It's been reviewed by the department of Energy, and meets the same criteria as Cool Roofing, but there is no category for Cool Siding yet,” he lamented. “They can't award ENERGY STAR for it because there's a rule that you need to have at least 2 competing products in the category, otherwise it's an unfair advantage. NuCedar can't take much credit for it yet, but the DOE has studied it and it looks like it would save 9 to 13 percent on your energy bills during the summer.” NuCedar is available pre-finished in 1400 color choices, and the factory finish carries a lifetime warranty. 

Kaye says he isn't a big fan of pressure treated wood for decking, preferring more lasting options such as Western Red Cedar, Ipe or the Kodiak composite line. As for other exotics, “We've been very successful recommending Red Balau or Batu as a preferred alternative to a lot of species in the mahogany category,” he said.

American Lumber supplies a variety of factory primed, factory finished, factory sealed, and factory treated products, in everything from pine to composites to plastics. Aside from the builder advantages, factory pre-finishing is seen as a popular eco-choice because whatever VOCs might be involved can be captured at the source rather than released into the air. “I think that the applicators have become more sophisticated, and now you can find zero-VOC factory finishes,” said Kaye.
 
Making it through the Recession
At American Lumber, desperate times call for… well, staying faithful to the strategy they've developed across several generations. “We anticipate the homebuilding market may remain severely diminished for a protacted period, and our company is geared for that because we are in it for the long run,” said Kaye. “Our traditional customer base is the professional lumber/building material dealer and home center, whether independent or pro chain. We have remained loyal to that base over many decades. We refused to help the big boxes enter the eastern market back when they were really growing and aggressively courting us,” he asserts. “Some people call that a bad business decision, but it was clear to American Lumber at the time that our dealers needed our support, so we linked our fate to theirs and worked hard to give them advantages over the big boxes.”

That said, Kaye believes that everyone needs to be alert to changing times. “All firms in our industry have to re-engineer their operations to take advantage of the new normal – or risk extinction,” he insists. 

Green building is clearly a part of American Lumber's strategy, one he is not reticent in recommending to his customers. “We will continue to take out a leadership position in green building because we think it will continue to grow,” he concludes.
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