A lot of lumber dealers in the U.S. can trace their company’s origins back to when “grandpa started it after the war.” What they mean is World War II, and while those businesses—many now in their third generation—are incredible success stories, Gordon Lumber is a cut above.
In 1868, as the country was recovering from the Civil War, Washington Gordon traveled to the village of Oak Harbor, Ohio to start a saw mill on the banks of the Portage River. Little did he know, that 150 years later the single mill would grow to a family legacy of six lumberyards, a truss plant, a land management firm, and an installed sales company, all still owned, in the largest part, by the same Gordon family. The great-granddaughters of Washington Gordon are still on the company’s board of directors.
This summer, the Gordon Lumber family will celebrate the company’s 150th anniversary with a company party at a Toledo Mudhens game.
Company structure
Any company that survives 150 years is sure to have changed with the times. Gordon Lumber is no exception. Most recently, in 2017, the company became Gordon Lumber Holding Company, which wholly owns Gordon Land Holdings, Gordon Components, Gordon Lumber, and Gordon Contract sales. The restructuring has allowed Gordon Lumber to align itself for growth, says company President Erin Leonard.
“Gordon Lumber operates six full-line lumberyards in the towns of Fremont, Bowling Green, Genoa, Huron, Bellevue, and Port Clinton, Ohio,” he says. “Gordon Components operates one component plant in Findlay, Ohio. Gordon Contract Sales is our installed sales company that solely handles installs and large contract material sales.”
Less than a year after the restructuring, Leonard says he sees Gordon Lumber to be well-positioned for success. He thinks the positioning will help Gordon Lumber reach into bigger markets than it has before.
“We’re square between Cleveland and Toledo,” he says. “That’s our geography. We’re prepared now to dance in Toledo and we’re looking to get a dance card going in the western Cleveland suburbs.”
Gordon Lumber’s footholds into metro areas will allow the company to work with some larger builders that aren’t found in the less populated areas of Northwest Ohio.
Adding to their prospects in the larger areas is the fact that Gordon Lumber manufactures trusses at its Findlay facility. Through truss production, Gordon Lumber is able to serve as a partner to more builders and even to independent lumberyards that do not offer truss manufacturing. The company currently serves a 150-mile range for trusses shipped.
With a customer base made up of 85% professional builders and remodelers, Leonard says he doesn’t consider big box stores his competition as much as he does other, larger chains.
One Gordon Lumber location where the company has built a considerable focus on retail customers is its Port Clinton yard. Port Clinton is a resort town that Leonard says triples in population on the weekends.
“The running joke is that from 5:00 p.m. on Friday to 2:00 p.m. on Sunday, Port Clinton has the highest per-capita income in Ohio,” he says. “The downside of that, of course, is the rest of the week or outside of the summer season it isn’t remotely the same.”
To reach the most customers in an area like Port Clinton, Leonard has focused that store on serving vacation home owners in the area. The Port Clinton store maintains a large showroom presence and serves a mix of vacation home owners who still do DIY repairs, and those visitors who might need a bit more help.
“The DIY market is certainly dying out,” he says. “People don’t know how to do as much anymore.”
For that growing customer base less inclined to tackle DIY projects, Gordon Lumber has introduced a service providing small installs on items such as storm doors and windows. He says the customers trust them with the keys when they’re gone and then they come back and know where to find them at Gordon Lumber if there was a problem.
Opportunities
Seasonality certainly affects employment numbers in a town like Port Clinton, Leonard says. In all, the company has about 130 employees at any given time. The component plant in Findlay accounts for a large number of them. Gordon Lumber also has a separate outside sales force that is able to operate out of any one of the company’s facilities.
Still, keeping staffed is an issue in Northwest Ohio as it is almost anywhere else in the country. From April into the summer, Leonard says, there’s a sharp bell curve in hiring seasonal help.
“It used to be, some 20 years ago, everyone sent their kid to the lumberyard to work for the summer. We don’t see that as much anymore.” To keep employees moving up through the ranks from yard positions, Gordon Lumber fully pays for CDL licensing for its drivers.
On track for revenues of $40 million this year, Leonard says that Gordon Lumber has built a solid foundation under what was a couple years of rapid growth after the Great Recession.
“We had increases of 20%, but we found areas of our foundation that were weak, and we made a conscious decision to work on the business to ensure we weren’t just putting Band- Aids on systemic problems that led to small profit returns.”
As a result, Gordon Lumber realigned its component plant to service out-of-market independent lumberyards that don’t have plants of their own. After years of the component plant languishing, Leonard says, it has now become one of the largest growth channels for the company.
Leonard says he sees that trend continuing. “Our biggest opportunity is in providing components to other independent yards outside of our market. In particular, where components are becoming a larger and larger portion of the customer purchase as site labor is becoming even more scarce and more expensive.”
In essence, by selling components and trusses, Gordon Lumber is helping its builder customers—and the builder customers of other independents—solve their largest problem, which is the overall shortage of labor.
“It’s driven by the fact that no one is going to trade schools to be a carpenter anymore. When I talk to other guys at lumberyards, we joke that there may not be anyone smart enough to cut wood and put it up pretty soon. We could be selling products that ultimately there’s not anyone capable of using or installing it. It used to be that lumberyards occasionally had truss companies. If the labor shortage trend continues, the real future is component facilities with lumberyards underneath them, not the other way around.”
Company culture
Perhaps one of the biggest changes Leonard has led Gordon Lumber through is hardly visible to the customer. Leonard has changed the company from an individual store culture to one that now works together for a common goal, while still carrying on the family-business traditions that have made Gordon Lumber successful.
As President, Leonard has been with the company since 2011. Previously, he worked at larger chain independent lumberyards, including one of Gordon Lumber’s largest competitors. With a seat on the board, Leonard is not only a boots-on-the-ground President, but he is also strategically involved on the Board of Directors.
“There is such a benefit to me being a board member also, the real asset that running a business like Gordon Lumber has is that it’s low to the ground, we can make necessary market environment changes quickly. No red tape. It seems like very little changed for 100 years in this industry, then suddenly in the last 20 years everything changed and it’s changing every four years since then. It seems to be speeding up. For instance, we were always a company that prided ourselves on individual store profitability. Even if it was a detriment to the company’s overall profitability.”
Leonard says that given the company’s relatively small geographic footprint, he saw that stores were fighting over some of the same customers until a few years ago when he changed the focus of the company’s culture to support the greater company as a whole. “The goal is simple,” he says. “We provide the customer with the best possible experience for the least cost available to the company.”
Since the change, a customer purchasing a product at one yard may have it delivered from a different yard. Distribution is now optimized to ship from the yard that has the least-costly distribution point for each delivery. “The old way was that everyone looked at the end of the year to see if their own store was profitable. They all competed against each other for customers. Going into the downturn, a lot of companies, like us, figured that out. We need to behave like one large store that happens to be in different locations.”
Now, Gordon Lumber has one location that ships shingles, one that does drywall deliveries, and two that are primary shipping distribution centers for lumber.
“Now, we’re not paying for a lot of redundancy that we just don’t need. We’re moving extra trucks to hub locations and the smaller yards are on singular trucks. We can also pare down inventory that way.”
Gordon Lumber is competing at a level beyond its six stores, Leonard says. With a solid footing in place, the company is able to bring the same products and services to rural markets that were traditionally only offered in urban areas.
“Being a smaller company allows customers to meet the decision makers at Gordon. That still means a lot to the local customer, knowing they are not just an account number at a faraway office. We, like most independents, are tied into the communities we serve on a level the larger chains can’t touch,” he says.
