Despite the CircumstancesAugust 18th, 2021 by Nathan Hobbs
For top dealers, 2020 was about more than just managing. It was about growth.
By Drew Vass
For most door and window dealers, 2020 was filled with juxtapositions. As a global pandemic grew and raged, they had to continue operating while looking out for the safety of their employees and customers. As some areas of the economy crumbled (most notably restaurants and hospitality) and the supply chain weakened, demand for doors and windows grew stronger. Shut inside, people came out in droves for home improvements.
“We were confident things were going to get very bad for us financially and wanted to be prepared. The exact opposite happened,” says Joel Fleischman, president of Drexel Building Supply in Campbellsport, Wis.
As a result, “We had to figure out how we could still do our jobs, while keeping everyone safe, but making it work for our customers,” says Bob Shackford, president of Paramount Builders in Va. Beach, Va. “But we figured it out.”
As a company that traditionally leans on door-to-door sales, “When COVID-19 hit, canvassing became a big no-no, so we had to figure out a new way,” Shackford says. “I have to give our owner all of the credit in the world. He said we have to find new ways to advertise and come up with a brand-new plan.” That plan included television advertising—something Paramount had never attempted prior to the pandemic. It was a huge gamble, he says, but also one that paid off. In 2019, Paramount’s revenues were $25.3 million; in 2020, they grew to $35.1 million.
Paramount’s success in 2020 might sound at odds with increased unemployment and struggling local economies, but data gathered for [DWM]’s annual Top Dealers list (starting on page 30) shows that even amid a pandemic, 60% of the companies providing revenue figures experienced increases.
“We’ve connected with a large group of people who’ve been home during the day but were never home before. That gave them time to look at their homes in ways they never had,” says Mike Finley, Paramount’s sales manager. “Suddenly they weren’t spending money on summer vacations,” Shackford adds. “They weren’t taking trips to Disney World; they weren’t paying to send the kids to summer camps, because no one could go anywhere. Instead, they said, ‘Let’s put this money into our homes.’”
As orders rained in, however, a pandemic worsened some of the industry’s long-standing issues, making it harder to deliver. Ahead of 2020, door and window companies reported they were plagued by a lack of labor. As unemployment expanded and federal stimulus checks made their way to potential workers, those issues only worsened, some dealers say. “It seems like the labor shortage has gotten worse since demand suddenly increased in May of 2020,” says Phillip Isaacs, president of California Energy Consultant Service in Rancho Cordova, Calif. Now, as legislators call for increases to the federal minimum wage rate (see article on page 16), already, “We have found that even [those in] semi-skilled labor are demanding premium wages,” Isaacs says. “For what they bring to the table, it makes it very difficult to make a profit.”
In a surprising twist, some companies report that by changing the way they work, they were able to increase production with fewer people or hours. At Drexel Building Supply, after shutting down for two weeks, “What we did realize, we somehow did in a 32-hour week,” Fleischman says. “And if we can do that, we can go to 40-hour work weeks forever,” he adds. Many of his employees received raises to compensate for their usual overtime pay, he says.
With the year starting off on mandatory shutdowns, inevitably, manufacturers and material suppliers fell behind, adding lag to the supply chain for doors, windows and other materials.
“Pre-pandemic, lead times were about four to six weeks to get windows, so our customers would wait approximately six to eight weeks to get their projects installed,” says Jennifer Lanigan, director of marketing for Clear Choice Home Improvements in Manchester, N.H. “Since the pandemic began, it has been 10-plus weeks just for our windows to be delivered, with no resolve in sight. Our average time from purchase to install on window projects is now about 16 weeks due to a growing backlog.”
Fleischman describes the supply chain as “complete chaos,” adding, “It’s out of our control, but an unfortunate situation.”
In cases where manufacturers have managed to keep up—or at least provide accurate expectations— dealers have shown loyalty, they say. But when push comes to shove, for “the ones that can’t seem to get things together, we have worked at finding substitutes,” one dealer tells [DWM]. At the same time, once manufacturers manage to catch up, “we will have great years of increased revenue ahead of us,” says John Wilding, founder of FAS Windows and Doors in Orlando, Fla.
Manufacturers aren’t the only ones under an eye of scrutiny these days, either. Inflated backlogs have some companies taking a closer look at which customers and projects they want to tackle. After a year of strong demand and with the same expectations going forward, “We have advised our sales team to be vigilant on qualifying customers,” Isaacs says. “We are trying to focus on larger, more local projects, while staying clear of customers who appear to be quarrelsome and/or overly budget conscious.”
Those leftovers could end up in the hands of newbies, some dealers suggest, as more door and window companies surface, looking to take advantage of an inflated market. This isn’t the first time the industry as has seen an influx of opportunistic-minded people, Shackford says, as a similar pattern occurred in the early 2000s amid a boom in new construction. But when the market cooled, many of those newcomers didn’t survive, he adds. There were also plenty of follow up jobs for his company, he says, cleaning up shoddy workmanship—something he expects could add to demand even further going forward.
At the same time, the pandemic has already weeded some companies out, Shackford suggests. “Any company that was willing to step up and be adaptable survived ,” he says. “It’s the ones that couldn’t manage to think or operate outside of the box that took hits.” Regarding the position that 2020 placed most dealers in, “Do you just say, ‘Oh well, that’s how we’ve always done it and we’re going to continue,’” he asks, “or are you adaptable to change and willing to work within the environment you find yourself in?”
Drew Vass is the editor of [DWM] magazine.
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