Volume 44, Issue 2 - February 2009

Feature

Dog- Eat- Dog?
In Today's Economy, Everyone's Looking to Sink Their Teeth Into Your Market Share
by Megan Headley

Times are tough. Profits are down and glass companies are closing every day; it’s no wonder some people will do anything to make a buck. Competition is certain to become more intense in 2009, with companies bidding for a smaller number of available jobs.

“What we’re seeing now is another turnaround [like we saw] in 2002, 2003 maybe, with hard bid. Instead of there being one or two contractors now you’re going to see three, four or five,” says Michele Juba-King, Juba Aluminum Products Co. Inc. Or, less optimistically, “Where there might have been five companies quoting there might be 12 to 14 now,” says Bill Rhodes, vice president of sales for Glass Distributors Inc. (GDI) in Bladensburg, Md. 

Experience Counts 

It doesn’t help that in today’s market glazing contractors are facing new competitors—from contractors breaking out of their niche to other trades people and, in some cases, even suppliers. 

Philip Desilet, estimator and project manner for D&A Glass Co Inc. in Meridian, Idaho, says his company has always gone after the smaller jobs. As he points out, “At this time in the economy, any work is better than none. If you can turn in a little bit of profit that’s better than none.”

As some of the country’s largest glazing contractors begin to see their backlog plummet compared to the past couple years, many are adopting the same mentality. 

As a result, some contractors have found themselves pursuing projects that are smaller than their usual job. It’s a natural extension. 

“As some of the bigger jobs have dried up we’ve gone back and looked at some of the smaller jobs to keep our backlog full,” says Craig Carson, vice president of A-1 Glass Inc. in Englewood, Colo.

And, naturally, this has the potential to add pressure to smaller glazing contractors.

“That little guy is more vulnerable than he’s ever been,” Rhodes says. However, he also points out that there are instances in which those smaller subcontractors can take the advantage.

“Sometimes the [smaller] company that has less overhead is able to maneuver accordingly more so than the large companies,” Rhodes says. 

More common, according to the contract glaziers we talked to, is the emergence of more small-scale contractors trying to take on larger jobs without thoroughly knowing what they’re getting into. 

“The residential business market has fallen so you’re finding more residential people running in, putting a rack in the back of their truck and putting in shower doors and mirrors,” says Desilet. Or, he adds, home improvement professionals are beginning to do window replacement. 

“They’re not subcontracting that to the glazing contractors anymore, but they’re taking on their own crews to do that,” he says. “When you get that kind of action within the glazing industry it busts down the price and it makes competition pretty tough when you’re a competent glazing contractor.” 

“We saw that back in 2003, 2004, where you’d see a pick-up truck and they’d have a sign on the side; anybody in a pick-up truck that talked glazing terminology would get the job because they were cheap. The problem was they were not experienced,” says Juba-King. 

“People who used to do auto windshields are now getting into the flat glass industry,” adds Tom Vezdos, vice president of sales for Basco Shower Enclosures in Mason, Ohio. “And I’ll even say that people who were in the basic shower door installation are starting to get into showrooms and custom shower enclosures.”

“There are a lot of new competitors. They’re in over their heads. I see a lot of ‘what were they thinking?’” says Sam Handley, a partner in D&S Glass & Door in San Jose, Calif.

You might be tempted to think that seeing the mistakes of these subcontractors seep into commercial construction would lead those errant general contractors back to the professionals with true commercial glass expertise. But Handley says that customers burned by an unknowledgeable installer can be difficult to work with. 

“By then the customer’s so upset and they’ve already put out so much money, I’m walking on eggshells,” she says. “It actually hurts us more than anything else—especially when I give them a higher price to begin with and they tell me they’re going to go with somebody else and then call me in the end.”

Part of that experience is knowing how to work with the customer, as Carson points out. “A lot of times, when you’re talking about some of the larger general contractors, some of the smaller guys will say how hard they are to work for … We don’t find that to be the case [but] we know what their expectations are when you get onto a jobsite.” 

Carson adds, “The real danger of that is … the smaller guys don’t realize how much project management, and safety concerns [exist]. They severely underbid these projects and they wind up surviving but hurting themselves and taking a good job out of the market … They just aren’t aware these are added costs to a job.” In addition to size, location now may play more of a role too, as Juba-King points out. 

“A lot of the building owners want to use local suppliers and vendors. Well, when you do work in the Southeast United States … we’re in Concord, N.C. … but local may not necessarily be in Alabama for us.”

She adds, “If they’re good, there’s certainly no problem—but I always say you’ll pay for either on the front end or the back end.”

Supplier or Competitor? 

It’s not a new story, certainly, but as everyone involved in construction is trying to reduce their costs, it’s not unheard of for a general contractor to bypass the glazing contractor to purchase products directly from the supplier, in order to avoid any mark-up on materials. 

Most suppliers, no matter how large, know that to sell directly to the general contractor means damaging a relationship with their glazing contractor customer, and in this industry it’s all about the relationship. 

“We don’t like dealing directly with general contractors because that would undercut our own customer base,” says Doug Derusha, Eastern national sales manager for C.R. Laurence Co. Inc. in Los Angeles. 

But for small projects, it’s not unheard of. 

Steve Bouchard, president of GDI, says, “We have some general contractors that are interior firms that actually buy stuff from us because the owners had relationships with my dad … but they’ll buy glass when they have three pieces to put in three doors, or something like that. But when they get a job that requires glaziers—they hire my customers, guys locally.” 

That doesn’t mean it’s unheard of for large orders. At least one general contractor that had purchased its glass supplies prior to searching out an installer has approached Carson.

“We have had one occasion of a request from [a general contractor] trying to buy something from one of our curtainwall suppliers and asked if we would install that. We said no. There’s nobody in our area that would do that,” says Carson.

Desilet could name industry suppliers off-hand that had bypassed glaziers to sell directly to the general contractor. “Skylights are a big issue,” he says.

“Hardware people are jumping me now and the hardware is in my bid package. That’s a big dollar amount.” Handley recalled that one job last year came about because the contractor had tried to replace a lite of bullet-resistant glass without calling in an installer.

“They managed to get their hands on it and they tried to replace it and it cracked and they wanted me to polish it out,” says Handley. “I replaced the glass. I gave them a whole new piece of glass; they ended up buying two pieces of glass. And as far as I know they haven’t done it since. That was a pricey mistake.” 

Although this might be one instance in which a contractor learned to appreciate the glazier’s expertise, there are plenty more instances where a hungry contractor will take what they can get, even if it means losing out on the profit gained from delivering products to the jobsite—especially when dealing with those “inexperienced” new subcontractors as mentioned above. 

Anything You Can Do We Can Do Better

It’s not always the general contractor, of course. 

“Facilities maintenance,” says Handley “The facility guys all the time are trying to do it themselves first. And that’s a mess to clean up.” 

But it’s a cheaper alternative than bringing in a glazier—until something goes wrong. 

Mike Bell, vice president of Bell Mirror & Glass Inc. in Wichita, Kansas, has run into a few instances of this so far. 

“I’ve known some overhead door companies getting into hardware for commercial doors and I have seen them get into mall railing,” he says.

“I foresee down the road that you’ll see handrail being installed by the gymnasium and bleacher people and things of that nature; there’s a lot of stuff going up in these gyms that requires handrail on mezzanines,” says Desilet.

After all, the glass industry isn’t the only group reacting to the threat of slowing commercial construction. Other trades may start to edge into glasswork, particularly for related items such as shower doors with a metal header or footer, or handrails that incorporate glass. But in general, Derusha says this works best in one direction—for glaziers looking to expand into metal work. “It’s harder for metal workers to get into glass than it would be for glaziers to get into the metals,” he says. “Glaziers already have metal sources whereas the metal industry is not familiar with the glass industry.” 

And that’s a trend that he’s noticed increasing. “I do notice that as things get more competitive, glaziers are looking to expand their business and are getting more into architectural metal and ornamental metal parts of the business.” 

Derusha points to such offerings as railings, sunshades and awnings as the types of products other glaziers could consider installing, if they don’t already fall into their line of work. 

Make Yourself Shine

With new competitors coming from every direction, it’s more important than ever that glazing contractors of all sizes know what they do best and how to promote that to their customers. 

For a lot of companies it’s a matter of building a relationship. 

“A lot of it is just the partnering, the relationship that one might automatically develop with an owner or contractor,” says Juba-King. “If you look historically at our work it’s repeat work because the construction teams know how Juba operates, they know what we do. It’s kind of like an old friend where you know what you’re going to get.” 

“I’d say supplier relationships are very important,” Rhodes adds. “Also developing relationships with the architects and solidifying those. Sometimes the bigger [subcontractors] get jobs because they’ve had relationships with these architects for 15-20 years, so they’re going to keep going to the same guys.” 

But, at a time when new competitors are coming out of the glasswork, so to speak, how do you begin to form those relationships? 

For starters, if you are able to offer other services, it’s not a bad idea to promote that, since other trades may be doing the same. 

“I would advise that glazing contractors let their contractors know that they can provide not only glass but they can provide a full service, an architectural metal service also,” says Derusha.

Otherwise, it’s best to highlight an area of expertise that helps you to stand out in your niche. 

For example, “We do a lot of design-build assist work here so we’re pretty much versed in what the current energy codes are, etc,” says Carson. 

The subcontractor’s ability to guide the designers through the process early on makes them an invaluable asset. 

And, as with any job, putting yourself and your reputation for quality and reliability in front of the general contractor or architect can help. Juba-King recommends providing case studies on prior jobs as a “portfolio of how you do what you do the best.”

“I think workmanship and quality of work, reliability, documentation, warranty issues are all very, very important,” Rhodes says. “If you’ve got a company that is building a building they’re going to want to know that company’s going to be around if there’s a problem.” 

Vezdos recommends using two strategies to stand out. “You either have to show that you can do a multi-family unit very efficiently and very effectively or you have to be able to take on a retail structure where you’re able to work with a showroom, you have to take on that kind of business plan,” he says.

Both show the company’s expertise, and a showroom can reinforce to the client that the company is going to be around, as Rhodes says. 

“You’ve got to handle yourself very professionally and document everything,” Desilet adds. “Just handle yourself in a professional manner and follow-up. The follow-up is a big deal.” 

USG
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