Building Your Business in the Building Materials Industry
by Karen Alves, September 20, 2018
In 2015, Global Industry Analysts, Inc. (GIA) published a study painting a rosy picture of the future of the global construction materials market. According to the report, the industry is projected to exceed $1.1 trillion by 2020, thanks largely to recovering construction activity across multiple sectors and a sunnier world economic outlook. The report also named the U.S. the market with the second greatest potential for growth, after the Asia-Pacific Region.
Three years later, do these projections still hold true? What are the current trends in the building materials industry, and how are they affecting wholesalers, retailers, contractors and end consumers?
Building Materials Industry Best Practices
These are the guidelines that must be taken into consideration by wholesalers, retailers and other shareholders who want to gain or maintain an advantage over competitors.
Best Practice 1: Leverage contacts at all levels within the trade.
High-level communication with businesses across the industry’s many sectors is one key to staying ahead of the curve. By establishing multiple contacts within the trade, you get a bird’s eye view of emerging and deteriorating markets. Knowing which new areas to exploit and which ones to gradually pull away from earns you the following benefits:
- More time to develop new investment strategies.
- Fewer competitors and more customers in new areas of investment.
- Reduced risk of outages and inventory waste.
Trade contacts are especially crucial for wholesale distributors, who are one step removed from end consumers and for whom timely and accurate demand tracking can be more difficult.
Best Practice 2: Leverage data-gathering and forecasting technology.
Few things are as valuable to a building materials supplier as real-time information and data-driven forecasting. In an industry as competitive as this, it means a lot for a business to have the ability to identify trends not just when they emerge, but as they emerge.
The right business intelligence software makes you more effective at:
- Discovering new sales opportunities.
- Optimizing your inventory.
- Establishing leaner purchasing habits.
- Adapting to seasonality and sudden shifts in product demand.
- Seeing how the latest trends affect your bottom line.
Additional Ways to Build Business
Beyond gaining access to accurate market information, here are some other ways successful suppliers stay successful.
- They optimize their business and warehouse locations.
- They find out how their customers define excellent service, then exceed it.
- They are not stuck in old ways of thinking, however effective they used to be.
- They educate their sales people about their products and how they are used.
- They hire intelligent, passionate young people—and listen to them.
As with any business, no foolproof formula for success exists for construction materials dealers and distributors. But if you want to build your business in the building materials industry, these are just some of the things worth considering.
To learn more, download our ebook, Building Your Business in the Building Materials Industry.
Work Hard. Work Smart.
The LP® BuildSmart™ Preferred Contractor Program supports all members in the quality installation of LP SmartSide® Trim & Siding products, and offers tools to help you build your business along the way. Through the program, members’ hard work is rewarded with access to proven product training, marketing support and priority lead generation.