Get creative when faced with inventory shortages

I think a lot of decking materials dealers saw it coming, at least here in the upper Midwest. The economic outlook, the housing and remodeling projections, the long winter leading into a short spring with homeowners hopeful for summer. Then a major decking manufacturer introduced a quality product line priced so competitively that it was hard to keep on the shelves.

This particular decking company offered me stocking dealer rights over the winter. I took them up on the offer, and because I did, our store’s inventory takes priority in our area. It’s a shift from how I’ve worked with manufacturers in the past, but I’m sure glad I went this direction.

However, even though I’ve got plenty of inventory of this product, I know many lumber dealer friends who can’t get   it in stock through their distributors. I was asked recently to offer some advice, so I shared with them ways in which I’ve obtained products before when it seemed everyone in my region—including distributors—were sold out.

- Sponsor -

First of all, consider what I call “vertical growth.” In this situation, I’ve learned that I don’t need to rely on traditional suppliers for certain products. A good example of this is aluminum railing. In this product category I was once so frustrated with product availability, that I decided to make my own. Now we source materials and manufacture our own railing. We assemble it and install it with many of our deck packages. Here’s the thing: We’re just like any other lumberyard. Any other dealer could do what we have done with railing. We saw a need and we figured out how to fill orders, then we made the space to do it.

I also advise dealers that if they’re having a hard time finding a product through their regular two-step or manufacturer-direct distribution, to consider non-traditional suppliers. I’m about to say a bad word to many in our industry, so please bear with me…that word is Amazon. We learned early on as brick-and-mortar retailers to despise Amazon, and there’s often good reason for it. The main reason I got involved in online sales is because of Amazon and people “showrooming” items from my store only to go home and buy them on Amazon. However, for as much as we see Amazon sometimes as the enemy on the retail side, you can make their distribution work to your advantage.

I’m not saying to go behind your distributor’s back on something, but ask them to consider your position. You need to get a product on your shelves for your customers to purchase, and if Amazon can make it happen, then you shouldn’t feel bad for using their services to your benefit.

I’ve used Amazon in the past for power supplies, wiring, and even railing components. Amazon is a good place to look for products that are really hot in one part of the country, but not selling equally well in other regions. Online retailers know this and sell on Amazon because they have a wider reach and can sell around the country. Products on Amazon are usually also available without a minimum quantity requirement, and with a business account, these items are tax exempt for retail. So, while it is true that Amazon is seen by many as a growing competitor, it can also be a supplier.

Also, I encourage dealers to reach outside their typical supplier relationships. We keep good lines of communication open with all suppliers in our area and for that reason we’re able to keep our inventory full. Sometimes, it may take a little coaching to get your distributor to reciprocate. While some guys will tell you there’s nothing more annoying than a distributor who calls or stops by all the time, I’ve got to say that we seek out distributor reps and sales reps who aren’t afraid of keeping us in the loop. Let’s face it, as retailers, we have to deal with a lot of contractors’ and homeowners’ lack of planning. One way we can anticipate their needs is if we’re in tune with our distributor and manufacturer inventory levels.

Perhaps the easiest way to avoid inventory shortages is to stock up ahead of time. Here in Minnesota, my offseason is the winter months. It’s then that I place orders to be prepared for my regular season in the spring, I’ve got to have materials on hand. I didn’t go to college for business or any- thing, but I do drive past a water tower every day. I look at my inventory the way the city views its water supply. You don’t want to get caught without it, so you stock it up and store it up for when you need it.

Stay Updated

Get LBM industry trends, data, new products, and best practices delivered to your inbox.