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Dealer Profile: Arizona’s Southwest Lumber

Bruce Jacobson, a contractor in Yuma, Az., who worked on residential and commercial building with a side of engineering, had a problem: how to get what he needed, and when. The answer came in a light bulb moment: form his own company.

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Bruce Jacobson, a contractor in Yuma, Az., who worked on residential and commercial building with a side of engineering, had a problem: how to get what he needed, and when. The answer came in a light bulb moment: form his own company.

Thus in 1973, Southwest Lumber came to be, born of necessity. And in 1994, Gannon Sullivan, a fresh high school grad, signed on in its rental shop while on his way to becoming a school teacher. Higher Ed was left in the sawdust as he went on to manage its paint department, teaching mixology instead of civics. He ended up as GM in 2012 and couldn’t be more satisfied.

Or challenged. Because Yuma (pop. 100,000)— hanging onto a tiny corner of Arizona where it meets up with California and Mexico—was itself challenged. “It’s a very diverse economic climate here: lots of poverty. Highest in the state in unemployment. High on the national rating, too,” Gannon paints the bleak picture.

Are we having fun yet?

The bright side, for Southwest Lumber, is the area’s two leading industries: one, agriculture, here in “the lettuce capitol of the world.” The other? The military. It’s a center of Marine Air Service and also acts as an Army proving ground. And they all bring in business, in diverse ways.

Southwest’s customers represent “a little bit of everything,” says Gannon. “Our biggest sources are the residential and commercial sectors. For instance, a hospital here is building assisted-living homes. And residentially, we’re involved in 70 to 80 homes, acting as our own private company. Plus we cater to smaller home contractors. A big part of our business”—here comes another golden egg in Gannon’s basket—“is winter visitors. We get lots of snowbirds with their mobile homes. We supply material for their decks, storage sheds, and such.”

“And,” he adds, “there are a lot of other new homes going up, too. Because of the poverty level, lots of folks here are eligible for USDA loans. Our owner also owns Jacobson Homes, a division. So, 35 to 45 of our business is houses: building the American Dream.”

Well, ahem, doesn’t your home-construction component compete with that of your pro clients? “Yes and no,” he responds. “Our big thing is the ability to source everything from the ground up on our homes—stick framing to a real estate office. So it’s a turnkey operation.”

Yuma’s contractors rely on Southwest, says Gannon, “because of what I like to think of as our outstanding service: special orders, same-day delivery at no charge, for example. We’re looking at offering PK opportunities, too. Our competitors consist of a couple of mom-and-pop operations plus a Lowe’s and 84 Lumber. We can’t compete with those boxes on price, but we succeed on service. Walk-in customers are another robust source of revenue.

So’s the rental department. It’s going gangbusters. “We love it! One-hundred percent profit! It’s a great money-maker. We rent everything from lawn & garden equipment to jackhammers, cement mixers and clay compactors. We even supply tables and chairs for events. Cotton candy and sno-cone machines, too. It’s gravy, like picking low-hanging fruit. Seventy percent of our rental business is from DIYers, and it drives them to shop in our retail store, too.”

Southwest also attracts new business via radio and print ads, which generate good response. “And we’re ‘semi-active’ on Facebook,” Gannon reports. Southwest also holds an annual Customer Appreciation event at the end of February, timed for the annual flutter of snowbirds’ return. Product reps demonstrate their wares, while staffers hand out hot dogs and soda, all covered on live-remote radio. Not only do those snowbirds pick up sticks and plywood—there’s also “the little widow who needs her faucet changed. We get to know their names, their back story, and ask about the grandkids. We’re also blessed with our own in-house sales. We provide private services, just as we’d want to be treated, ourselves.”

Southwest also picks up business from farmers who employ migrant field workers, including the wherewithal to build boxes for shipping produce. But from neighboring Mexico and California? Nada. “Too complicated, when it comes to regulations.”

Commercially, the outfit supplies plywood and timber for crates for the military’s proving grounds: “things they build and blow up. The stuff they drop from planes. Their business is regular, and the good thing is, they pay by credit card, so there’s not this 90-day wait.”

All that magic is achieved by a staff of 16, which boasts a high retention rate. “I came here, myself, in 1996, and many have been around here since before I signed on. The benefits are great, and [owner] Bruce treats everyone like family. It’s always families first, and that’s rare in this day and age. The company also provides insurance, vacation days and paid time off.”

Back to Yuma’s rotten economy. “It dropped in 2008, and that really hurt. Yet we kept everyone on at 40 hours with no layoffs. We felt the depths, but now we’re riding high. I’m an eternal pessimist,” Gannon admits, “but spending is holding up and we’re on top of the wave. Still,” he notes cautiously, “we don’t stock tons of product; it’s more just-in-time. When you’ve got dollars in your pocket, you still need to think ahead. Yet, our company has 10 new-home starts going, so we’re riding that wave.”

Looks like Gannon’s in the saddle for good. “They’d have to force me out! The big thing is, I like being treated like family here, which makes me fired up to come to work. And it’s never the same thing twice. Always new challenges!”