Refuse to Participate in the Recession
The economic downturn has been especially tough on the construction industry, but the roofing segment has been more resilient than most. Despite of the tough economy, some independent distributors have had record years recently. Two representatives of independent distributors, Earl Ward, president and CEO of NEMEON, Inc., and Richard “Rick” Pogue, sales manager and owner of Arrowhead Building Supply, Inc., shared their thoughts on the market with Roofing Contractor.
“In early 2008, Arrowhead Building Supply boldly chose not to participate in the current economic recession,” said Pogue. Headquartered in St. Peters, Mo., Arrowhead Building Supply just opened its newest location — its sixth branch — inLowell, Ark. The 3.5-acre facility includes 30,000 square feet of warehouse space and a showroom featuring a variety of different products, including home facades complete with sidewalks, landscaping, and decks. There’s even a street sign at a crosswalk that reads “Arrowhead Way” and “Arrowhead Lane.”
“We have decided to ‘sell the dream’ in all of our showrooms, as our General Manager, Jim LoPiccolo says, in order to make the selection process easier for our customers,” Pogue said.
The company also started construction on a brand-new, 42,000-square-foot facility in Springfield, Mo. “The new Springfield location will be the state-of-the-art facility in our entire industry, said Pogue. “This new building will host a 5,000-square-foot showroom with two miniature homes inside to display product and give a realistic feel to our customers who are there to pick products and colors. As with our Hollister, Mo., location, Springfield will have a drive-thru window, just like at a fast food restaurant, allowing customers to call ahead and have material ready for pickup when they arrive, never having to exit their vehicle.”
Despite the tough economic climate, Arrowhead has had four consecutive years of record sales since 2008, noted Pogue. “Over the last 11 years, we have grown from a $7 million company in 2000, to a $53 million company in 2011. Projections for 2012 are in the area of $70 million and, with all of the spring 2012 storm activity in the St. Louis area, sales will probably be well north of that figure, with only six total locations.”
Strength in Numbers
Arrowhead Building Supply is part of NEMEON, a roofing and siding distribution cooperativeheadquartered in Woodbury, Minn. According to its president and CEO, Earl Ward, NEMEON is comprised of more than 180 independent roofing and siding distributors — with more than 500 branches across the country — who are all equal owners. According to Ward, working together has helped NEMEON’s member companies be more profitable. “Business has been very good overall,” he said. “The independent distributors have weathered the recession very well and are positioned well to capitalize on the improving economic conditions.”
The cooperative offers purchasing power and other perks. “We concentrate on the purchasing aspects but have introduced many initiatives including development of a national presence through our NEMEON Network, point of sale digital signage program. We have also introduced our own private brand — LionGUARD — which is comprised of professional-grade complementary and accessory products produced exclusively for NEMEON by the industry’s premier manufacturers. Our newest initiative is our Buy Local campaign. Our membership has national strength while maintaining their local ownership and independence. Buy Local will bring to the forefront the opportunities and advantages of doing business with locally owned and independent roofing and siding distributors.”
Members can also learn from one another. “Working together in the cooperative model gives the independent the ability to share best practices and utilize the collective leverage necessary to not only survive but thrive in this highly competitive marketplace and feel good about perpetuating their business,” said Ward. “We also see that contractors are recognizing that doing business with the local independent distributors is good business as they can develop strong owner to owner relationships.”
It’s those relationships that can help both contractors and distributors cope with an uncertain world ahead. “Going forward, contractors need to stay close to their suppliers to be on the cutting edge of information as more changes are sure to come,” said Ward.
Pogue agrees, and urges businesses to focus on what they do best. “My father and our company president, Jerry Pogue, taught me long ago that you cannot be all things to all people,” he said. “He is correct, as usual. Instead, we have chosen to focus on being the very best at what we do, and customers have rewarded us with a lot of business. In short, if you put out a superior product, customers will find you, and they have done just that in large numbers.”