Dealer of the Year: Hamilton Building Supply

LBM Journal’s Dealer of the Year awards recognize LBM companies of different sizes that epitomize the entrepreneurial spirit. By our definition, a Dealer of the Year describes a company in which leadership excels at identifying underserved— or emerging—markets, satisfying customers, and constantly working to grow and improve business. While these companies represent vastly different operations, the common thread is their fierce commitment to finding ever-better ways to serve their customers and their communities.

Hamilton Building Supply

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Hamilton Building Supply: Focused on the future

John Perna Hamilton Building Supply
“Consolidation is rampant. If you want to maintain independence, you need to grow from within. You grow or you go, and our future is to be a quasi-distributor,” explains John Perna, president of Hamilton Building Supply.

When John Perna returned to Hamilton Building Supply in 2019 with an MBA and deepened industry experience, he set course to implement best practices from companies that he felt were at the top of their game. So, Perna looked to retailers like Home Depot, Amazon, and Target to bring the best aspects of those companies to his family business, a single-location lumberyard in Hamilton, New Jersey. What he has created is a membership rewards and purchasing program that rival mega retailers yet serve the single-family homebuilder. That’s why his company is our Dealer of the Year in the category of sales from $10 to $50 million. “We use premier retailers as our benchmark at Hamilton,” Perna says. “We learn from other companies that are outperforming, and for us that means participating in spaces that aren’t common to LBM, one of which is e-commerce.” Perna says that while the initiative was put in place before the COVID-19 pandemic, the seismic shift that the virus caused to both the retail and homebuilding pushed Hamilton Building Supply quickly into online retail.

Under Hamilton’s new e-commerce platform, customers can create accounts, quote and purchase products, view order history, create shopping lists, and put together estimates 24/7.

“The platform is a constant improvement every week. We’re pushing more of our pro customers to use it. We’re showing them how to use it on their phones and laptops, and we’ve been getting a lot of our customers to sign up,” Perna says.

Membership program

Following a Home Depot model and implementing a strong e-commerce platform has helped Hamilton “level up” as an independent dealer, he says. The company has also introduced HBS SELECT, a membership program that offers free shipping and free delivery, as well as a rewards system in which customers can earn a year-end purchase incentive.

“It’s pretty much our version of Amazon Prime,” Perna says. “We use the delivery fees that we charge non-members to augment the service we’re providing to our HBS SELECT members. The whole goal is to create that customer ‘stickiness.’”

In addition to HBS SELECT, all customers can utilize express pickup, something the company has actually been offering since 2005, and which most other retailers now refer to as “curbside pickup” since the pandemic began.

“Our goal is speed,” Perna says. “How quickly can we get our customers in and out of our facility, or materials shipped to their jobsite? When they’re not on the jobsite and are spending time in our store, they’re not making money.”

Family business

Hamilton Building Supply has always found success in “getting the details right,” Perna says, and that goes back to its founding as a cement and lime supplier in 1924. The company grew and expanded inventory that eventually included lumber and building materials.

Perna’s grandfather, Jess Coleman, was a farmer in the area who worked at what was then known as Hamilton Supply in the slow winter months. In 1967, Coleman sold his farmland and, along with his brother, Earl, purchased the company. As often occurs in the industry, Jess Coleman eventually brought his sons into the business and Kim, Kip, and Keith Coleman helped their father grow the company to include specialized building divisions such as pre-hung door manufacturing, a custom millwork shop, a commercial door division, and an equipment rental department.

Eventually, Jess Coleman retired from the business and passed it on to his sons. Growing up in the family business, John Perna, stepson of Keith Coleman, worked at the lumberyard every chance he could.

When Kip and Kim Coleman retired, the company was run by Keith Coleman, who after a few years on his own, also launched DURATION Moulding & Millwork, a product line of siding and millwork accessory components fabricated out of poly-ash composite material. DURATION Moulding & Millwork is a subsidiary of Hamilton Building Supply and ships product throughout the country.

Located between Philadelphia and New York City, Hamilton Building Supply sits on a nine-acre site that serves customers from Central New Jersey, up the Jersey Shore, and into Eastern Pennsylvania and parts of Maryland. Operating as a single-location lumberyard, Hamilton added a cabinetry showroom about 20 minutes away in Newtown, Pennsylvania in 2010.

Today, the company is run by John Perna, president of Hamilton Building Supply. Perna first worked fulltime in the family business in 2008. He graduated college early to fill a sales position at the company only to face the housing crisis and the Great Recession shortly after.

“We went from a $28 million company to a $15 million company practically overnight, and yet I was optimistic. We had nowhere to go but up, so we focused on getting details right for customers and serving them above all else. We focused on carrying high quality, innovative products.”

When Kip and Kim Coleman retired, Perna’s role was expanded and he was promoted to general manager in 2016. He pursued an MBA from the Villanova School of Business, and ultimately decided the best move for his career was to gain experience outside of Hamilton Building Supply. He worked as a national sales manager at a product marketing company, and as a director at a building materials company. In 2019, he returned to Hamilton Building Supply as company president.

“While I was away, Keith developed DURATION and while that company has grown, I’ve run Hamilton Building Supply.”

Hamilton Building Supply serves a customer base made up 90% of pro builders and contractors through 65 employees, eight of whom are architectural sales associates, and seven who serve inside sales roles.

When many businesses faced layoffs during the COVID-19 pandemic, Hamilton Building Supply added four new sales associates, an operations manager, and a financial controller.

“We got hit really hard economically from COVID-19 March through June,” Perna says. “Knowing how hard it is to find good people in our industry, we just had to figure out a way to keep our group together. People remember how they’re treated, and so for us our single best decision we made was to not let anyone go due to a knee-jerk reaction to sales numbers.”

Hamilton Building Supply
The LBM management team of Hamilton Building Supply.

Five pillars of Hamilton Building Supply

Sales numbers at Hamilton Building Supply are steadily increasing and expected to be $25 million to $28 million in 2021. The goal for 2022 is $30 million, Perna says.

“We are partners in our customers’ business,” he adds. “We can only achieve that by having a talented sales team. Sure, we’ll sell lumber, commodities, and the easy stuff. But we really focus on getting the hard stuff right. We specialize in doors, windows, and millwork. We have our own interior door shop to produce better quality door units with faster lead times. We need to be able to respond faster than anyone else in our business. Whether that’s to keep projects moving forward, same-day or next-day delivery is an expectation for us.”

Perna’s focus led him to introduce Hamilton Building Supply’s Five Pillars: a philosophy he says leads to successful customer retention and “brand stickiness.”

  1. Right people, right seats
  2. Better, faster, sharper
  3. Chain of performance—collaborative team relationships
  4. Culture that continuously improves
  5. Black on the bottom—every division is wholly profitable so that the company is profitable

Looking to the future

“Growth is a big part of our company right now,” Perna says, but that doesn’t necessarily mean growth by acquisition. Perna is focused on operating the current location to the best of the company’s ability.

“We have a clean, flat, nine-acre facility with a 40,000 square-foot warehouse on a rail line,” he says. “We’ll continue to improve on that footprint as we look ahead.”

The facility’s location and proximity to major metro areas is a part of Perna’s optimization plan.

“The short-term goal is continuing to grow revenues by putting the right people in the right seats, and having the most talented team,” he says.

Perna says an LBM dealers’ success is going to be predicated on how well they can implement operations systems in centrally located materials distribution and delivery. “Dealers need to be well-positioned in their market geographically—and that doesn’t mean just purchasing more locations. If there are $50,000 worth of windows on a truck, we’ll drive it two hours. That’s just good business for us.”

For independent LBM dealers especially, distribution efficiencies should be top of mind and also at the top of the expense list.

“Consolidation is rampant. If you want to maintain independence, you need to grow from within. You grow or you go, and our future is to be a quasi-distributor. We have services on site, fabrication, a service team for windows and doors, a remote and on-site strong sales team. That’s the future for LBM dealers.”

Hamilton Building Supply

 

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