It's no secret that 2002 was another extremely tough year for construction distributors. Despite historically low interest rates that kept the housing market afloat, the market suffered as a whole. There's no guarantee that things will improve in 2003. With that in mind, we asked a handful of construction specialists what they are doing to offset slow sales and tightening margins.

Chief Executive Officer

Industrial Bolt & Supply

Auburn, Wash.

"Our biggest growth in the last 7 to 8 years has been in abrasives, so we are putting in 50 to 60 new part numbers in abrasives for 2003. We've also grown our cutting tool and aerosols business.

"We also private label everything we can. That helps, because it gives you some differentiation and we are building some brand loyalty with it. Of course that means you need to buy in bigger quantities, but we are private labeling for everything we can afford to. It does give you some differentiation."

President

Marco Supply Co.

Roanoke, Va.

"We're seeing more assembly work. It's not anything new but it's something that may accelerate over the next year as new building codes become standard for the whole country. Everyone has always had their own codes, but officials came together and they chose the strictest code to abide by nationally for new construction and renovation. One of the strongest parts of the new code is seismic regulations. This lends itself to an increase in the assembly of hangers. We put them together, and all the contractor has to do is put it up in concrete.

"We can usually do it more efficiently because we have the equipment to assemble them faster. Most contractors don't have the equipment on site, so it makes it easier for them. We obviously charge for that value-added service and hope they perceive the value to be high. We have prepared labor calculators to show them the cost of doing the assembly in the field versus having us doing it."

President

Marathon Tool Industrial Supply

Medway, Mass.

"We've actually added inventory, and we also just added another salesperson. We're going after new business. I'm optimistic because the tail end of the year got much busier. We made a few changes to our web site, and our Internet business has picked up significantly. In the last two months we've done more than we did all of last year by just making a few little changes. We also moved a delivery guy into our repair department so we have a little more diversity and he can be valuable in more than one place."

President

Centaur Enterprises, Inc.

Grand Island, Neb.

"WHILE THINGS ARE SLOW we are trying to work with customers to build our market share. If we aren't spending our time writing up orders, we're trying to enhance our relationships by explaining our services and looking at our product mix to build value for them. We want to be sure we're offering everything they want us to, instead of us just thinking we are bringing everything they need to market.

"We are also conducting a lot of research to help us better identify our core market. We're in a lot of multiple markets, and while we don't want to ignore the fringe markets, we'd like to focus most of our time on our core market. Our research will help us build a branding campaign and take our unique attributes to those customers."

Owner/President

Neu's Building Center

Menomonee Falls, Wis.

"We're holding more tool shows and we get the contractors in here so customers can see what's new. We introduced a new miter box from Bosch, and it went really well. We're making a better effort when new items are available to make more of a splash and have an event around it to help motivate sales. Customers want to know what's going on, and if we let them know before others do they appreciate it. Bosch came out with a cordless tool that can drop 20-something feet. We had a big drop event. Customers like to see stuff like that. We don't want to be a me-too distributor. We want to be on the forefront of the new product introduction. And it helps that the vendors are kicking in a little extra to make it more enticing for customers to buy at our tool shows."