Builders and Contractors: Navigating the Rising Number of SKUs

In recent years, the construction industry has witnessed a significant increase in the variety of Stock Keeping Units (SKUs) available in the building materials market. Principia’s ongoing, monthly survey of contractors and builders probes into the effects SKU proliferation has on their business.

Surprisingly, respondents expressed more positive results from SKU proliferation than negative. 

Nearly two-thirds of builders and contractors (65%) report a wider selection of SKUs has resulted in increased business opportunities. In addition, the influx of SKUs has influenced them to try new products (63%). This is encouraging for product suppliers trying to gain competitive advantage through product innovation. Lastly, respondents report reduced overall project costs due to competitive pricing from suppliers (60%). 

Less positive results show 58% of contractors and builders having to invest in training staff to stay up to date on product trends and technologies. Respondents also report that coordinating numerous SKUs from different suppliers can pose logistical challenges (42%).  The complexity of managing orders, deliveries, and inventory requires efficient systems and processes to avoid delays and errors.  

For LBM dealers and manufacturers, understanding how their product offering is viewed by customers can help drive and validate critical business decisions. Principia conducts custom market research that can help answer questions regarding product, price, customer and the overall market. Learn more about Principia’s services here.