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REAL ISSUES. REAL ANSWERS: Margins VS. Market Share

“We strive to increase our margins not by carrying the same products as competitors, but by carrying same type products, usually better quality, and selling on merits rather than price. By stressing the long- term benefits to overcome initial price objections, price becomes secondary.”

“We are adding a part-time outside sales- person to look for new contractors and help maintain our current contractors. Also, we try to do whatever it takes to save the contractor time by offering better than expected customer service. If that means matching prices, coming in on Sunday or staying late, we will do it.”

“Growing market share in our industry usu- ally means you have to drop your margins to very low levels. It is not easy when most customers are focused mainly on prices. Relationships and the quality of your service, as well as the quality of the materials you are providing, can help you get a little bit higher price than the national dealer who is focused on buying the business at any price.”

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“We finished 2014 with a GP of 33.90; we sell our service and our ability to partner with our custom builders. We are not the cheapest and can’t be with the services we provide. Attention to details and developing partnerships for each builder is the key to wooing custom builders.”

“Any company that looks to gain market share without degrading margin must provide value in other ways besides attractive pricing. Value-added opportunities can come through logistics, broader offering, or other hidden costs, but the customer must realize these benefits to fully capitalize.”

“We just completed a 5,000-sq. ft. design showroom that displays flooring, lighting, cabinetry, windows, doors, and decking. So, obviously, we want to focus more on the high-margin products where our ability to add value will allow us to preserve and possibly grow our margins.”

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“We see increasing our market share by carrying and stocking a full line of quality LBM products (unlike our major competitors who cut back on many items), and by continually focusing on superior Customer First! service. We are also competitive, and will not be deterred by our competition’s giveaway pricing.”

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