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Lumberyard Purchasing Trends Reveal Surprising Supplier Preferences

In the evolving world of building materials, where and how lumberyards source products they sell deserves some examination. Traditionally, lumberyards have largely sourced their inventories through two-step distribution. While this may still be true on a volume basis, lumberyards also frequently purchase direct from product suppliers regardless of product category.

This graphic reports survey results for where lumberyards purchase materials from for building material product categories. The graphic has a stacked bar chart with the following data: Decking 49% 2-step distributor 26% Direct from Manufacturer 25% Both Doors 33% 2-step distributor 39% Direct from Manufacturer 28% Both Exterior Trim 47% 2-step distributor 23% Direct from Manufacturer 30% Both Fencing 39% 2-step distributor 34% Direct from Manufacturer 27% Both Insulation 46% 2-step distributor 24% Direct from Manufacturer 30% Both Railing 49% 2-step distributor 26% Direct from Manufacturer 25% Both Roofing 43% 2-step distributor 27% Direct from Manufacturer 30% Both Siding 47% 2-step distributor 23% Direct from Manufacturer 30% Both Window/ Patio Doors 26% 2-step distributor 47% Direct from Manufacturer 27% Both

In product categories long thought to be the domain of two-step distribution, such as decking, siding and roofing, roughly half of respondents (middle and right columns combined) indicate at least some of their purchasing is made direct from the manufacturer. For windows and doors, the figure is more pronounced, topping two-thirds.

Understanding lumberyards have developed and will continue to develop relationships with product suppliers presents potential issues worthy of deeper consideration. On the one hand, there are opportunities for product suppliers to develop direct relationships with lumberyards that can be mutually beneficial, resulting in more optimum positioning for their products. On the other hand, suppliers hold long-standing relationships with their two-step distributor partners. The decision to transition from a partnership to what may seem like a competitive stance should not be taken lightly.