Building Material Dealers Industry Overview

Excerpt from Building Material Dealers Report

Companies in this industry are primarily engaged in retail sales of new building materials and supplies. Major companies include Home Depot, Lowe's, and Menard (all based in the US) as well as Beijing Easyhome Investment Holding Group and Red Star Macalline International (both based in China), Home Improvement Hirose (Japan), Kingfisher plc (UK), and Praktiker and Tengelmann (both based in Germany). Some independently owned stores belong to wholesale cooperatives, such as Ace Hardware and True Value Company in the US, that buy materials in bulk and resell them to members.

Competitive Landscape

Demand is driven mainly by residential real estate construction and renovation. The profitability of individual companies depends on merchandising and customer service. Large companies enjoy economies of scale in purchasing and have the ability to offer more products. Small companies can compete effectively by catering to contractors, by offering specialty products and services, and by serving areas unattractive to larger companies because of limited customer concentration.

Products, Operations & Technology

Major products are lumber and other structural building materials and supplies (45 percent of sales) and hardware, tools, and plumbing and electrical supplies (25 percent of sales). Other products include paint; lawn, garden, and farm equipment and supplies; and floor coverings. In addition to selling products, many companies sell installation services (so-called "installed sales") using their own employees or outside contractors.