When LBM dealers talk about expansion, often the conversation centers around buying out a nearby competitor or building a brand new store to add to an established chain of lumberyards. For Holmes Building Materials in Baton Rouge, La., expansion has come in the form of two satellite locations—small storefronts that showcase products and serve builder and contractor customers.
With two main lumberyard locations as well as a door manufacturing and millwork facility already in the company’s arsenal, Matthew Holmes wasn’t interested in opening a whole new lumberyard. For his company, the property, labor and other overhead just didn’t make business sense. While he still recognized the opportunity to expand the business’s footprint, Matthew found a low-risk and even lower cost way to do so.
In 2015, Matthew persuaded his father and owner of the business, John Holmes, to let him test out a theory that he could serve a larger customer base out of a small satellite showroom. The idea was this: A customer (most likely a builder or contractor) walks into a showroom that is stocked with vendor-provided product samples, and each sample is labeled with a price, product description, and lead time. A builder then is able to select a product, see it in person, know exactly how much it costs and how long it will take to be delivered. Inventory is kept at a separate location and the sales process is simple.
“The satellite stores are very easily shopped,” Matthew said. “People can look around on their own and know, based on price or lead time, what would best serve them.”
While the satellite facility employs two people, the products essentially sell themselves, Matthew said. “We show all the samples, profiles, trims, textures for stairs, columns, mouldings, doors, windows, associated hardware, barn hardware, you name it. We’ve got more specialized stuff than anyone would have at a lumberyard showroom.”
He’s also able to reach a different brand of customer than he sees through his traditional lumberyard locations. Holmes Building Materials’ first satellite facility opened in March, 2015 and is strategically located in the south side of Baton Rouge. The store brings in customers who aren’t going to travel across town to one of the lumberyard showrooms on the north side.
The second 1,600 square-foot satellite storefront is in Central, a northern Baton Rouge suburb, and is also strategically placed in a rapidly growing area where residential construction is in high demand.