Surging Demand for Building Materials

In this episode, Zach and Beth talk to guest TJ Shaheen, Executive Vice President at Builders’ General Supply, who shares some hard truths about the frustrations and pain points he and his customers are feeling as we all struggle to deal with COVID, and how manufacturers can make business run more easily.

Zach Williams:

A number of our shows recently have focused on how building product companies have pivoted because of COVID. But on today's show, we want to have an honest, and frankly, a not-so-polite conversation about the pinch that your customers are feeling right now. You're going to hear from a retailer/dealer who shares their frustrations and honest feedback about what is happening in the industry, and how this is opening up opportunities for business to be stolen because manufacturers are missing one simple strategy in the current market. All right, let's get in this show.

Voiceover:

Welcome to the Smarter Building Materials Marketing Podcast, helping you find better ways to grow leads, sales, and outperform your competition. And now, here are your hosts, Zach Williams and Beth PopNikolov.

Zach Williams:

All right, everybody. Welcome to Smarter Building Materials Marketing, where we believe your online presence should be your best salesperson. I am Zach Williams alongside my cohost Beth PopNikolov. We've got a great show planned for you today. Beth, how are you doing?

Beth PopNikolov:

I'm doing great. I want to welcome our guest, TJ Shaheen. He is the Executive Vice President of Builders' General Supply, and has roughly 400 points of view to bring to us from all of the things that he's got going on. So TJ, welcome to the show.

TJ Shaheen:

Thanks Beth, thanks Zach. First time, long time, let's get started.

Beth PopNikolov:

Let's do this. TJ, why don't you start by telling us a bit about what it is that you do at Builders' General Supply and why exactly you have so many unique points of view to share with us today?

TJ Shaheen:

Thank you. Yep. Executive Vice President of Builders' General Supply. We were founded in 1931, and we're four generations later. So we have four LBM yards, retail centers yards, guys come out and pick their stuff up. We have two design centers, and that's more of an intimate setting for... The end user architects can sit down and really go over all of our displays, pick out everything they want. Black windows, white windows, rainbow windows, whatever you want, we got them. And then we also have the millwork yard up in North Jersey that we just acquired, and it's been a great fit for us, and it allows us to be in that commercial space with metal jams, commercial doors, trim. It's a great fit for us so far. So we're looking forward to it. And like I said, I'm happy to be here.

Zach Williams:

You know what? As we were prepping for this show, TJ, one thing I had mentioned to you that I was really excited about in terms of having you on was the fact that you've got a bunch of different vantage points for our listeners. You guys own a millwork yard, you own a retail component to your business, you have an interface with a lot of manufacturers, and you're in one of the biggest markets in the US, which is that New York, New Jersey market, which was hit really hard by COVID. And so I think to sum all that up, what I'm excited about to get your vantage point on is... And you have, I think, a pretty good vantage point of what's happening in the industry across the board, not just from a manufacturer standpoint, but you see retail, you see residential construction, you see commercial construction, you see it in relationship to some hot markets, is what we would call them. I'd love to get just your 30,000 foot view of how you think things are changing from your perspective and what that means for manufacturers in the space.

TJ Shaheen:

So at 30,000 feet, here we go, hit the parachute. For us, we're the densest state in the United States, 9 million people here in New Jersey, and then we also have the Manhattan market. That's also a big part of our area. A lot of migration back and forth, especially during the summertime. So, there's definitely no shortage of people here. And with these people, that equals demand. You need people to have an economy, and for sure, we've been in a fortunate spot, where we're in an affluent area, there's always a lot of demand.

TJ Shaheen:

But what we saw, coming back to the ides of March, when this all started, was a massive, just hedgehog effect, where suppliers, our customers, we didn't know what was going to go on. And the new term, essential business, as we kind of kicked around in that Bradley Hartmann earlier podcast we did in the year, it was kind of weird, because we didn't know we're going to have the doors open anymore, but we were allowed to continue, our customers were allowed to continue as essential workers. And for us, that was a good sign, but still, just not knowing if we were going to be able to continue, but we did.

TJ Shaheen:

And now, as we see going through the last few months, well, our manufacturers were predicting the same thing, that there was going to be a business stoppage, a business disruption. So what do they do? They shut down as well. They shut down their lines. And now since we made it through, and now it's kind of you're coming out of the tunnel, so far as we see, now that there's been all this pent-up demand. People have been sheltered in place for three to four months, they've been staring at those ugly cabinets, that deck that maybe might fall through or fall off the back of your house, and they want to replace all that.

TJ Shaheen:

So now we have this massive surge into our showrooms, into our locations. And guess what? Zach, guess what? You know what that means? If you can't supply... Because all of our manufacturers, they can't supply and we can't get the product out, it's like, all right, what else is going to go wrong? We have the demand, we can't get the supply. They have the supply, we can't get it out. It's a seesaw effect, and what we're seeing is this rubber band sort of motion, where it got pulled back and now we're snapping through, and it's like, all right, well, not, everything is all equalized right now. So it's kind of a lot of balls up in the air right now. But for us, we definitely saw it in Superstorm Sandy. That was probably our last biggest business disruption in the area that affected all of New Jersey and Manhattan as well. So we've been through it before. We were able to make some adjustments. And you know what? Nothing's boring in New Jersey, that's for sure.

Beth PopNikolov:

That's a great state motto.

TJ Shaheen:

We're not the garden state. Nothing's boring here

Beth PopNikolov:

Nothing's boring in New Jersey.

Zach Williams:

If I'm reading between the lines, TJ, is, are you saying that you're seeing a pent-up demand, as you mentioned, but you just, frankly, don't have the products, or the manufacturers haven't been supplying it to you at the level that they need to? Is that what you're saying?

TJ Shaheen:

Yeah, for sure. One of our biggest treated suppliers, and it's up here, it is... you can't find it. It's almost like a mythical figure. Everyone's calling around and trying to get it, they can't get it. And a lot of that demand went out to, if you think about it, the outdoor dining that is now... you have to have it. You can't-

Zach Williams:

Huge.

TJ Shaheen:

... eat indoors. So where are you going to get those tables from? So a lot of that lumber went out to supply those restaurants. And look, the restaurants need it. They need that material, because if they can't sit people outside, they've got another problem. But again, they're using plastic, they're using whatever they can do. Empty cardboard boxes to sit on. But that's really where a lot of the material went. And on top of that, for sure, they had to stop everything, because again, they were preparing to say, "You know what? If there is a business disruption, we got to get ahead of it, so we've got to knock down these lines and just kind of go back to..."

TJ Shaheen:

Some of the places just kicked over and said, "We'll do maintenance. We'll just clean up the machines and get things going, so when we can fire these things back up again, we'll be able to be a little bit more efficient," I guess. But it's just what it is. No one expected it, there's no script for it, and you're seeing it on both sides. But it's just so bizarre. It's like, all right, we finally have the demand, but we can't get the product. And if we get the product, by the way, it's going to be another 25% more expensive. The lumber market right now is going through the roof. Again, nothing is like equal. There's no equilibrium, no like, stable here. It's balls in the air, bouncing all over the place like a lottery machine.

Source

Zach Williams:

TJ, what I find really interesting is like... I've talked to a number of manufacturers through COVID, and a good portion of them, at least the ones I've been talking to, have told me, they're like, "We're trying not to shut down our line, because we feel and we see that there's going to be this massive backlash of demand." Is there anybody that you work with specifically in... If I could put you on the spot, like, is there anybody that you see that's capitalizing on not shutting down their production now? When other people were, they had the foresight to, or are you saying everybody you've interfaced with paused in some capacity and you're feeling the pinch?

TJ Shaheen:

Yup, for sure. I can't really say... Man, I was even going on eBay and trying to buy some things that we needed for our location-

Beth PopNikolov:

Man.

TJ Shaheen:

... and we still couldn't find stuff there.

Zach Williams:

You were on eBay?

TJ Shaheen:

Yeah, I mean-

Beth PopNikolov:

That is so real.

TJ Shaheen:

Just for our employees, your internal customer. We needed sanitizer, we needed antibacterial soap, and you couldn't get it. Obviously, everyone knows like, toilet paper, you couldn't get. And I don't know what was going on with that. Not a gastrointestinal thing that we were going through here, but anyway. So just, you couldn't find that type of thing. And then even with our plants that we were able to normally supply, what would happen is if they had some workers in their factories that were sick and affected, they would all have to shut down the factory. And this thing was so rampant in our area that it was almost one in two people were having it. It was that bad.

TJ Shaheen:

But if you think about it, factory sometimes, they're owned by... they're not a privately held company. So they might be owned by shareholders or whatever their outfit is going to be. But they look at, and they say, "You know what? We've got to do the right thing." And it's more of an optic thing. They said, "You know what? If someone got sick or we have COVID in our plants, we've got to shut it down, we've got to sanitize." That rate there would bring people offline for four weeks. So, right off the bat, everybody was coming out with a disclaimer, "Saying, look, if you want doors, you normally get them in a week, we might be at four weeks." Windows, same thing.

TJ Shaheen:

So, we do a lot in windows, we do a lot in decking, we do a lot in lumber. And lumber is even, really, more difficult to really get your hands on because it's coming from the west coast to the east coast. So you don't know what's happening in these different plants, what's going on in these different locations that we use as suppliers. You only find out about it after the fact, when they said they're supposed to be here four weeks from now, and they're supposed to show up in four weeks from now, the truck comes, and nothing's on it. So you call back and they said, "Yeah, well, we had some issues with COVID."

TJ Shaheen:

So that's kind of the fallback right now, everything's related to COVID. It's not my dog ate my homework anymore, it's like, "Oh, well, my daughter had COVID." So it's one of those things where it's an easy excuse, but for sure, we can't get anything normal lead times anymore right now. I can't think of one anyway.

Beth PopNikolov:

I think it's really interesting what TJ is bringing up, is like, we've talked to so many people about how they've pivoted, really because of social distancing requirements, but TJ is having to pivot because of supply chain, which is the next... that's like the next wave that we're hearing people talk about now exactly, and you're feeling it, I would say, TJ, before people have said that you're going to be feeling it, which makes sense, for all of the domino effect reasons that you've mentioned. I'd like to talk about... You're clearly a savvy guy, because you're on eBay, like sourcing material, whatever it takes. I'd like to talk about how you've had to like pivot, maybe pivot suppliers, pivot your messaging to your customers, instead of being like... you're no longer able to be the, If you need it tomorrow, we can get it to you tomorrow." How are you having to position yourself with your customers to keep that business while making the wait longer? Because we all know people are not great at waiting. COVID or no COVID, I want my Amazon Prime package on my doorstep within 48 hours.

TJ Shaheen:

They're ruining it for everyone, right?

Beth PopNikolov:

How you get it here, that's on you. My expectations have been set, as a modern day consumer. So maybe we can start there.

TJ Shaheen:

"So honey, can you go out and run and get me some milk?" "Yeah, I'll do that tomorrow." "Oh, don't worry, I just took it on Amazon, it'll be here like in four hours." Look, they've ruined it for everyone, for sure. But for real, when you knew that you couldn't get stuff on Amazon, like I said, toilet paper or anything related to that-

Beth PopNikolov:

That's when people started freaking out.

TJ Shaheen:

That was like-

Beth PopNikolov:

They were like, "Wait a minute-

TJ Shaheen:

... oh snap!

Beth PopNikolov:

... it's not about Amazon anymore? So it's real. It's real."

TJ Shaheen:

That's right. Get in the basement, okay, because we're going to have to ride this one out for a long time. This stuff just got real. With our customers, the best thing that we can do, and we cannot communicate enough, we definitely moved to... What happened was we had to shut down our showrooms, just to, again, protect our frontline workers that were there at all of our locations. Because again, we had product that needed to go to our customers. So what we did... We have an online chat feature, we also have different emails that we rang out and set up for everybody so that they could email. We have had sets of eyes on that inbox, and we tried to do a lot, just to communicate that way and make it more electronically easier for them. So when they did come in, everything was just set up for them in the yard, they could just pick it up. And we just basically tried to spoil our customer, knowing that we're all going through these tough times.

TJ Shaheen:

Again, we didn't know if we were going to be open tomorrow. So we just kept winging it and making sure that we were taking care of our customer the best way that we could. So I think having the communication, but also allowing those communications to come into us. So if you were a customer and say, if you were outside in the parking lot and you just realized that we weren't open inside to come in, that we had signage, look, that's okay, call the number, this is the email, we got seven people on this email, we have a chat service. Just trying to give them everything that they could, so they could stay in touch with us.

Beth PopNikolov:

That's incredible.

Zach Williams:

TJ, talk us through the conversations that you're having with manufacturers right now. Granted, you have a supply chain issue, what does the conversation look like with manufacturers? Are they trying to push something to you? Are you outside of product? Are you asking for something else from them? Can you give us some insight into what you're seeing and what you're hearing from them?

TJ Shaheen:

It's definitely a frustrating time, because what happens is when your customers are expecting something in that traditional timeframe, let's say four to six weeks, and a truck shows up at four to six weeks and there's nothing on it, or we're not even being told that it's not coming in four to six weeks... And again, the truck just shows up... This literally happened with a supplier of ours, and now it's eight weeks. It's still not here. So that customer, at the end of the day, is being told a story, that we're trying to be upfront and completely transparent. And when we're not really being told the right thing to us, is where we get caught in a bind. And that's really what happens for us, where I get stuck in the middle, because then the customer wants to talk to an owner.

TJ Shaheen:

So I'll be there, I'll pick up the phone, and I say, "All right, let me do some research, let me find out what's going on." And when I can't get an answer, that's when I really start to get frustrated, and then I start to use relationships that I have with all of our main suppliers, because that's my job. I have great relationships with the suppliers, and when I pick up the phone and I call you know it's, we've got a problem, let's try to work this out and figure it out. And for the most part, we can do that. But right now, it's just been very frustrating, because I think our suppliers' hands are tied. If you have somebody that's two-stepping the material, they have to deal with their supplier; it goes to them, then it comes to us. Their hands are tied.

TJ Shaheen:

So I don't know what really is truth versus what's not being so truthful, but all I know is that I have to give my customer an answer, and if I can't do that, and I'm leaving my salesman and in lurch, I feel like I'm not doing my job. Because that's my job, I got to take care of my customer. And if I can't do that, then I start getting really frustrated. We just had an order come through this morning that I got an email on my way in and the lead time for something, again, that's usually four weeks is now nine weeks, and they still can't give us an actual confirmed date. And I understand that; that's a far time. I was like, "Nine weeks? Why don't you just say eight, maybe 10?" Everything's always rounded up in this industry, I don't know why nine.

TJ Shaheen:

But anyway, that's the deal. So I get frustrated, I can't get answers, and we can't get product. I don't care what it is. And oh, by the way, like I said before, when it does come in, if it's a commodity product right now, it's going through the roof, it's another 25%. So whatever we paid then, four weeks from now, it's a completely different level. So it's definitely a frustrating time. We're trying to manage all that. And again, customers want things right away, or for expected lead times that they know, that they've dealt with, like for Andersen windows, it's always four weeks, and right now they're having to make those adjustments. So it's tough. They've got to schedule things out, they've got to finish your jobs, and I get it. But when we can't get it, I don't know, it's just been a frustrating time.

Zach Williams:

It's crazy that you have so much demand, and you literally have zero visibility, is what it sounds like.

TJ Shaheen:

Yup.

Source

Zach Williams:

And so if I'm a manufacturer listening to this, what I'm hearing is, I need to be really transparent and really honest with those I'm supplying to. Even if it's brutal and hard to hear, I can't deliver this to you until 10 weeks, whatever it is. If we can shift though, TJ, what I'd love to focus on... You were talking a little about communication, how important it is for a manufacturer, to suppliers, to dealers and retailers. Can you give us some insight about where you think the industry is headed and what manufacturers need to be thinking about, from a marketing and sales standpoint, to continue to stay ahead? Because COVID, it hit us all, we weren't really aware. Like, no one was really prepared. Now that we're in this current state, I'd love to hear your perspective on, well, what do manufacturers need to be thinking about, from a marketing standpoint and a sales standpoint, in order to capitalize on where the market is headed?

TJ Shaheen:

As a retail supply company, we deal with the best manufacturers, have great relationships, and they've always got our back. And we're the same way with our customers. It kind of just cascades down the way like that. And we're still a relationship business, and like I said before, I know that if I have a problem with a company that we're dealing with trying to get product, that I know that I can pick up the phone. So I think communication is key, but sometimes... We've talked about this electronic stuff and virtual all the time. Pick up the phone, let's go back to the old school. Pick up a phone and talk to somebody. No more texting, no more emailing; pick up the phone. When you have a situation and it needs to get resolved, you can see these emails come back and forth, back and forth. Text message, back and forth, back and forth. With your customer, emails, emails. Pick up the phone.

Beth PopNikolov:

I love that. I love that. I love that.

Zach Williams:

Who's doing a good job with this right now, TJ?

TJ Shaheen:

Right now?

Zach Williams:

Yeah.

TJ Shaheen:

Like, my reps at Andersen are great. So my Andersen window reps are great. I can pick up the phone and it's done. They just take care of us, that relationship, and that's the way it is, I can pick up the phone. And that's really what it comes down to. When you're an owner of a company and stuff's boiling and you're into crisis mode with a customer over something, you need to be able to pick up the phone and talk to somebody as a manufacturer. So, when we talk about where things need to be, transparency, relationships, yeah, this is a relationship business, and sometimes you just got to pick up the phone and talk to somebody.

Beth PopNikolov:

I love that everyone is racking their brains, trying to get so creative about like, how do we pivot? How do we reach our customers? How do we get more online? Which, obviously, we endorse, because we believe in digital marketing.

TJ Shaheen:

Right.

Beth PopNikolov:

But let's not overlook the technology that's right in front of us, let's just pick up the phone.

TJ Shaheen:

No, absolutely. Because you know what? Digital marketing is great for a certain channel.

Beth PopNikolov:

Do you mean all the channels? Because if you're going to be on our podcast, you have to believe that it's all of the channels.

TJ Shaheen:

It's all the channels.

Beth PopNikolov:

I'm kidding, I'm kidding. Not such a good joke.

TJ Shaheen:

It's all a challenge but one. Really, it's a relationship business, and you need to talk to somebody. We cannot understate that even a little bit, because that... And especially now, when you can't see somebody and you... Yeah, you might be able to Zoom, and that's all well and good and that's fine, but when there's a fire, you're not going to say, "All right. Well, look, we'll set up a Zoom meeting for two weeks from now at 12 o'clock. I know it's a fire, but trust me, it's still going to be burning." No, pick up the phone and talk to somebody right now. Talk to your customer or talk to your supplier. And that supplier better pick up the phone, because I'm your customer, and if you're not picking up the phone, don't pick up the next time I try to call, because I'm not trying to call again.

Beth PopNikolov:

This is the best. This is one of the best episodes we've ever done.

Zach Williams:

This is like a rant on building products and COVID.

Beth PopNikolov:

I'm obsessed with it. I'm obsessed-

TJ Shaheen:

I am in the middle of it all, so I'm sorry if I sound frustrated, but you know what? That's-

Beth PopNikolov:

Don't you apologize, don't back down, man.

Zach Williams:

Well, this is great, because I'm like, "TJ, tell me about tactics in marketing and what to do." And you're like, "Screw all of that, I just need people to be responsible, to just be real with me."

TJ Shaheen:

For sure.

Zach Williams:

I think that's great. I think that's-

Beth PopNikolov:

I do, too.

Zach Williams:

... really great advice.

TJ Shaheen:

Because people can hide behind all this other stuff that's floating out there with, again, whether it's emailing or texting or digital. And I'm not trying to bash this, I'm just saying what's real is hearing somebody on the other end of the line, and you can hear the voice, you can hear the authenticity, you can hear the verbiage, everything that they're saying, and it's an audible sensory thing. And if you have a relationship with that supplier and you have a relationship with that customer, a lot gets settled a lot more quickly instead of going back and forth, back and forth, back and forth. It's like a ping pong match, with these emails.

Beth PopNikolov:

I actually had an architect tell me one time that they choose their manufacturers based on how their reps behave on the phone. He's like, "I can tell. Like, instead of emailing with the rep, I will call the rep, because I can tell, by their voice, if they know what they're talking about or not, or if they're just like a farmed out sales person."

TJ Shaheen:

Right. No, that's great.

Beth PopNikolov:

Millennial architect too, to be clear.

Zach Williams:

That's wild.

TJ Shaheen:

To be clear, just-

Beth PopNikolov:

To be clear.

TJ Shaheen:

To be clear.

Zach Williams:

To be clear, millennials do pick up the phone.

Beth PopNikolov:

We do. We know how to dial and everything.

TJ Shaheen:

I'm a Gen X'er so it's okay. I'm-

Beth PopNikolov:

There's not a lot of you. There's not a lot of you.

TJ Shaheen:

No.

Beth PopNikolov:

You're a rare breed.

TJ Shaheen:

Yes we are. Well, I knew that already, before you said that.

Beth PopNikolov:

TJ, if we can pivot, really quickly, before we let you go, I think it's important for our manufacturers to know, or even, I guess, for anybody listening to know, what products do you see that are up and coming to soon be in demand? Like, if I'm a manufacturer for X product, I've got to get my supply chain figured out ASAP, because I'm about to be the guy that TJ is calling, being like, "What the heck is my lead time? Get it all together."

TJ Shaheen:

I think, for sure, there's a lot of stuff going in with the smart home environment. I saw stuff like three, four years ago, and just wondered how that could really drip down into our industry, like the Oculus, people being able to see 3D design drawings being in their own kitchen or the siding on their exterior of their home. It's definitely come a long way, but for sure, our industry, when it comes to that technology, really needs to ramp it up, because I feel like we're maybe two to three steps or miles behind the rest of the industry. But yeah, for sure, I see that definitely coming in to demand, for sure, smart home items, for sure.

TJ Shaheen:

And then outside of that, still, it's crazy with the decking these days. You get decking this spring and next spring they have like another bunch of 35 colors. I don't know if they're working with Crayola, but it seems like every six months, they're coming out with like all these new colors. And for you, as a sales rep, you're like, "All right, well I sold you blue, but I just want to match blue. Well, I got raspberry. No, it's not going to match. All right. Well, sorry. Thanks for coming in."

TJ Shaheen:

So they're always coming up with these different flavors, so that's... they got to work that stuff out. But yeah. And then you got the railings that go along with it. Windows, we do a great job with windows as well, and you're seeing a lot of movement towards that composite material. Not so much the wood and the vinyl on the outside, but more of a composite, like really straight lines and thin rails and styles that make a real modern look, we're seeing over here in New Jersey. And I love that. I love selling windows, windows are great, and big windows, big doors. If you guys were at IBS a couple of years ago, I was standing-

Beth PopNikolov:

They're huge.

TJ Shaheen:

Right? I was standing in a tilt-swing door, pivot door, and I looked like I was like a little midget. I was like this tall. And I'm six foot tall, I mean, come on. I couldn't even climb to the top of it. The door was huge. So you've seen a lot of that, but you have to be in the right space. You're not putting this in the middle of your yard, looking at a hedge, you got to have like that expansive view. So a lot of big doors that are out there, that's definitely a good movement for us. And I don't know, I'm sure there's a lot of other things, but-

Beth PopNikolov:

Those are good answers. That was great. Everything, is the answer.

Zach Williams:

No, that's exactly what I hear. TJ, this has been great. If someone wants to get in contact with you, what's the best way for them to reach out?

TJ Shaheen:

They just hit me up on my LinkedIn account, they'll find me.

Zach Williams:

That's great. We'll make sure we link to that as well in the show notes. But TJ, this has been awesome. Man, thank you so much for coming the show. And for our listeners out there, if you found this content helpful, make sure you subscribe to this podcast. Go to venveo.com/podcast. And until next time, I'm Zach Williams, alongside Beth PopNikolov, thanks everybody.

Voiceover:

You've been listening to Smarter Building Materials Marketing, with Zach Williams and Beth PopNikolov. To get the resources mentioned in this podcast, visit venveo.com/podcast. Thank you for listening.