Sometimes, the old becomes new again. Such is the case for North Shore Lumber located in Two Harbors, MN, along what’s commonly known as the North Shore of Lake Superior. Founded in 1889, this LBM dealer is possibly the second oldest in Minnesota, yet it is experiencing a renaissance of sorts, thanks in part to its new owner, Adam Johnson, and his team.
Johnson acquired the business just last year, and in the face of economic uncertainties. This wasn’t his first foray into the LBM world however, as Johnson, a former contractor, also owns Lake Country Lumber in Minong, WI—a purchase he describes as a “flip.”
“It had been for sale for nine years, was very outdated, and was doing very little in business,” he explained. “I think at best, they were breaking even, but it had been in the same family for 60 years, and they were just sort of holding on. I was partnered up with a contracting company out of Duluth, MN at that time, and so when lumber prices shot through the roof three years ago, we decided to buy that lumberyard as a way to manage those costs. We had around 140 field employees, and so we thought it might be a way to sort of ride that out, but then interest rates shot up, and that sort of killed that idea. And so a year and a half ago, I basically bought them out of the lumberyard, and they bought me out of the contracting.”
Do, or do not
Even more challenging than the economy, was the fact that North Shore Lumber—then doing business as Two Harbors Lumber—had not received much attention for the last few years. “There really wasn’t much for selection. There was a lot of stuff in the store, but there wasn’t a strong LBM selection, and what there was wouldn’t have been compatible with today’s building needs. I think they just decided to retire and sell, and it sat for sale for seven years.”
Many might question the logic of such a purchase, especially in light of current economic and housing instabilities. Johnson’s experience, however, was his guiding star, and it led him to a place of confidence to move forward. Sounding a bit like the character, Yoda, from the movie “Star Wars: The Empire Strikes Back,” Johnson says, “Either you believe you can do it or you don’t.”
“In this market of Minnesota’s North Shore [the coast of Lake Superior and the surrounding communities], there is very little competition, and if you can deliver to your own expectations, you’re likely going to be successful,” he says about his philosophy. “As a contractor for most of my life, I know how to design the store to fit what my needs would have been, and so it’s trying to make sure that we reflect that. Service is defined as a reasonable price for the product, a higher standard of quality in the products you’re selling than your competitors, and being accountable to the transaction commitments that you’re making. So if I’m selling to somebody and I’m promising that we’ll send good lumber out and we’ll be there on time, and that we’ll listen to them, then we better do that. And if you do business with a company that engages with you like that, you’ll keep going back. And I think as long as we can operate that way, that we can listen to what they’re asking of us, and we follow through with our end of it, we’ll be successful despite market conditions. Will it always be as fruitful? No. Some years are going to be tighter than others. But I think if you just hold true to those core values, you will survive the ups and downs.”
Seeing opportunity
As mentioned earlier, the market that North Shore Lumber services has been underserved for many decades. As geographically large as the area is, it was not uncommon to drive 1-1/2 hours to get to the nearest LBM yard. With the revitalization of North Shore Lumber, Johnson sees opportunity, provided he treats his customers correctly. “I had a market study done in partnership with Do it Best when we first engaged in this project, and so I had an idea that I knew what the parameters were,” says Johnson. “But in practice, I’m finding that it was desperately underserved. A lot of people didn’t know we were here. I mean, people who live in Two Harbors didn’t know there was a lumberyard here in town. So not only is the city of Two Harbors waking up to a functioning lumberyard that really cares, now we have loads going as far north as Grand Marais and Grand Portage —all of a sudden, it seems like everybody’s waking up to it.”
“I knew there was a great market here, but I think it’s really more than that,” he continues. “I think you couple that with the fact that you’re not just capturing a potential percentage of those who were maybe going to drive to Duluth. You could capture almost everybody if you just treated them right.”
An example Johnson gives is of a customer he had sold product to, but there was an additional component of the order he was out of. Rather than turn away the customer, he sent one of his employees to a competitor to buy the out-of-stock part so that he could complete his customer’s order. “We lose money on it, but it’s important to just see it through.”
It’s that “can do” attitude that Johnson sees as vital in forging a successful business path, combined with a bit of savvy when it comes to understanding what to provide for your customer base. As an example, he points out how the store was selling welding and cutting gas, but it didn’t have a welding section. In response, he created a new welding section in the store to serve those unmet needs.
“We feel like we’ve been able to cover the needs of a lumberyard, so now we’re trying to build out what would be that next ring of needs,” he says. “For example, there are lot of projects where you might need stain, or you might need small electrical or plumbing supplies, mechanical supplies, things like that. So now we’re trying to create space and bring more of those products in every week. We’re trying to make it so that if you’re a contractor and you’re doing a job, you don’t have to go to two or three stops. If you’re going to wire a house, clearly, you’re going to go somewhere else to get all your wiring needs. But if you’re doing a small project and you need a box and a little wire, you can get it here along with your lumber.”
Get to know North Shore Lumber
Founded: New ownership in 2023, founded in 1889
Ownership: Family
Locations: 1
Employees: 14
Software platform: Epicor BisTrack
Buying group/Co-op: Do it Best
Customer mix: 70% pro / 30% DIY
Biggest sellers: Framing and windows
www.northshorelumber.com
