Building a Future for Distributors and Dealers of Building Products
Volume 44, Issue 4 May 2005
A DEALER'S PERSPECTIVE
The Times, They Are a
A Dealer's Perspective on a New Type of Company
by R. Mark Reasbeck
I’ll let you all in on a little secret. Ninety-five percent of the time when I sit down to write this I haven’t a clue of what to write about. Not today. I’m ready, and as always, it will be informative, entertaining and based entirely on a true story.
For review, I live and have my business in Las Vegas. It’s no secret that this is still a “Boomtown,” although the record pace of last year has tapered down, due to over-inflated values driven by a mass infusion of investors. The name of that game was to literally camp out in front of a sales trailer, brush your teeth in the parking lot and mob the salesperson when they arrived to open a new housing tract.
The non-occupying investor would buy the house without a stick of wood in place, and when the home was finished the plan was to “flip the house” and reap a windfall profit. There is a flaw in this scheme. Sure, builders were busy building phase after phase of houses, and were completing them in record time. But as phases were completed, realtor signs started springing up all over the streets.
The investors were now competitors with builders. This scenario is a hard one to overcome, and I believe this is why I see a new wave of bidding on new projects that require a one year occupancy in order to purchase in the development. But this is not what I had planned to write about.
There is a new type of company that has been creeping into our building community. For lack of a better title, let’s call it the “All Things to All People Company.”
This is where a concrete company wants to become a framer; electrician; plumber; HVAC, painter, drywall, window, door and insulation supplier; and, oh yeah, we still do concrete company. There are currently about four companies experimenting with this concept here in Vegas.
As I scratch my head, I wonder what is behind this movement. Is it money? Maybe I’m missing something here, but why would you want to specialize in everything?
At my company, we do windows. It’s a full time effort to keep ahead of the competition, handle day-to-day operation problems and maintain market share. Why would I want to multiply this with several companies at the same time? Conversely, what advantage is putting all their eggs into one basket to a builder? What if the concrete division of the “multi-company” does a superb job, but the paint and drywall sector can’t meet deadlines or the workmanship is inferior? From the builder’s view, wouldn’t the deficiencies of the paint and drywall company cast a negative shadow on the shining star concrete company? The next time contracts are awarded, will the concrete company, as a multi-company, lose a bid because of another division’s poor performance?
About two weeks ago, I received a call from a purchasing agent from one of my biggest customers. She asked me if I could take over a job that the current supplier could not perform. After doing a little probing, I found out that the supplier that had fallen down on the job was the window division of a multi-company.
The next day, I met the superintendent, went through the window lists and made appropriate changes.
The superintendent then said, “These guys have held up my job for weeks. How soon can you get the windows here?”
You saw that one coming. After burning up some valuable cell phone time, I was pleased to tell the man that one of my suppliers would put them into production immediately and have them on his job in seven to eight calendar days. We did it. We did it because we do windows. This is all we do, so we have to do it right the first time.
The best part of this story is how it came to pass. The president of the company was walking the project and asked the superintendent the reason for all the missing windows. The super told him he couldn’t get any answers from the supplier. The president then called his purchasing agent and told her to give the job to me, because we could bail them out.
No matter how bad of day you’ve had, that kind of call makes it all worth it, and it gives you encouragement knowing someone is noticing your efforts. Some of the best business relationships I have are because I played “clean-up” and put myself in a position to reap those kinds of benefits.
Last summer, I told you how I was being sued for $385,000 to repair $48,000 worth of windows I sold to a condo project eight years ago. The results are in: I lost, and here’s why. As I sat in a conference (boiler) room, I was accompanied by one insurance adjuster and two lawyers, who, I was told, were on my side.
Construction Defects Revisited
The mediator, or messenger boy, would go between us and the trial lawyer’s room and fire dollar amounts back and forth. (This is one time that I think it’s appropriate to “shoot the messenger.”) It’s kind of like the game played when you buy a car, only I knew I’d be lucky if I still owned a car after they got done with me. The insurance company agreed on a $50,000 settlement, not because I had done anything wrong, but because I was the “next one standing” with insurance. Huh?
They explained that the framing company had gone out of business and since they installed my product, I was the next “logical” company with insurance. The attorneys were “relieved” that they could get off so cheap and not go to trial.
They encouraged me to accept this because “you don’t want to go to trial where it could take three months. You know what kind of people could give up three months of their lives and side against the poor suffering homeowner. And you run the risk of the judge awarding the $385,000 if he’s in a bad mood.”
“But I haven’t done anything! Just once, can’t you just fight for one of these cases on principal?”
Ready for this answer, the lawyers replied, “Mark, this is not the right case to go to battle.”
My last remarks were, “When is it ever the right case to fight?”
The Last Word
No salesman will call, ’cause I don’t have a new one yet.
R. Mark Reasbeck is owner of Legend Windows for the West, a Las Vegas-based window dealership. He can be reached at firstname.lastname@example.org
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