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Dealer Profile: Anderson Lumber of Tennessee

Guess what’s manufactured in Alcoa, Tn.? Okay, that was easy: aluminum. Starting right before World War II, a plant opened to turn the new wonder metal into tanks and planes. Today it’s a mainstay of Ford Motor trucks.

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Guess what’s manufactured in Alcoa, Tn.? Okay, that was easy: aluminum. Starting right before World War II, a plant opened to turn the new wonder metal into tanks and planes. Today it’s a mainstay of Ford Motor trucks. But that tiny town near the Smoky Mountains can boast another vital supplier that’s been around far longer, harking back to 1925—and that’s Anderson Lumber Co. Even before folks needed aluminum, they needed homes.

Today, picture-pretty log homes and pine siding are in demand in the gorgeous Smoky Mountains, along with decks and cabins to rim the region’s many lakes and rivers. In Alcoa and twin city Marysville, fine schools draw young families, while the scenic surroundings and year-round golf act as retiree magnets. Here custom dwellings, condos, apartments and remodeling old stock for the flip-and-sell market also contribute to Anderson’s bread and butter, abetted by significant commercial projects.

So it seems like Steve Coleman’s dad and granddad asked the right question at the right time. As contractors back in the Fifties, they figured they’d help their work along by owning a supply house, making their own moulding and getting themselves far better service. “Ever think of selling?” they asked Mr. Anderson, who was quick to answer, “Deal!”

The only trouble was, as Steve tells the story, service didn’t improve one bit because their other customers always came first. So, exit Coleman builders; enter Coleman suppliers, gifted with a great downtown location.

Then in 1972, along came urban development to claim their site. They found an even better one smack on one of the busiest highways in the state, leading to the airport, to Atlanta, to increased business in a cluster that grew to include a WalMart, a Cracker Barrel, and a whole lot more. By 1976, the company added its own roof and floor truss shop, and soon doors and millwork, too.

Who’s buying? Contractors represent 80% of Anderson’s trade. And why are they bypassing Lowe’s and Home Depot, just down the road? “We have different—and better—materials,” Steve’s got the answer, “high-grade framing lumber. Premium studs, treated lumber, and decking. Cedar. Long lengths—24, 26, 36—they can’t find elsewhere.”

Oh, and rental, adds assistant manager Joe Allen: Bobcats, backhoes and other construction equipment, commercial lawnmowers. “With equipment rental, you need a good equipment shop,” he says. “We’ve got full-time mechanics on board. And we’ve grown our sales and service by adding party rental, too (and the margins are really good). First, though, we had to build a big warehouse to hang and wash the tents, like a giant car wash.”

The 15,000-sq. ft. showroom has a full-service hardware department plus a class-act paint department manned by two full-time staffers. Says Joe, “Customers like our competitive paint prices and brands—top-quality ones nobody else carries, up to $100 a gallon. People even drive over from South Carolina for them.”

Factor in the woodworking shop, too, providing special cuts, planers, sanders, and anything you might need for, say, a unique fireplace mantel, odd openings or doors customized to fit. “It brings us people from the box stores, too, wanting us to cut their doors to fit. We also get calls asking ‘Got this?’ We always say ‘Yes.’ So now they’ve learned to just call us first.”

Adds David Paine, Anderson’s advertising and marketing man, “A couple of years ago we rebranded ourselves—remodeled the showroom with polished cement, new layout, new fixtures, sales counter and display areas for our windows and doors and cabinets.” Since then, it’s become a bit of a regional attraction. “Folks from other yards come by to see what we’ve done and if it might work for them.”

It also pleases the area’s pros, and not only for the earned discounts and bonus points, which can lead to free trips. “They know they’re number-one here,” says the boss. “If there’s a problem, we take care of it. For instance,” he offers, “a man had problems with a door he bought from us four years ago. We told him, ‘We’ll pull it out and put in a new one. No need to keep coming in.’”

Employees (50 in the showroom, 50 in the plant, and 20-plus in the rental unit) are valued, too. In Steve’s eyes, “They like working for a family operation—me and my son and my dad before us. It’s an easy, relaxed atmosphere where we treat them like family—get together for lunch, go to a football game. Things like if the door shop meets its schedule, we take ’em out to eat.”

Yet, with long-timers retiring, attracting new blood represents a challenge. “We talk to salespeople, people in the community, people who come in here, plus we’re working with two staffing companies. We let everybody know that, for young people, the door’s wide open. If they’re good, they can move up the chain quick. Our older salespeople take them along on calls, mentor them, teach them how to do take-offs, stairs, sell a window-and-door package.”

To pull younger homeowners into the store, David, the marketing man, has turned from traditional advertising avenues to social media—principally Facebook, where the company page is updated three times a week.

Ladies’ Night—a twice-yearly event—also has proved a prime source of new business, attracting up to 100 participants, who can complete take-home projects like planters or holiday decorations. For those ladies who’ve felt intimidated stepping into a manly environment like this, it’s an entrée, complete with snacks, gift cards, and whacks at common home problems like unplugging a toilet or applying weatherstripping. “We’re seeing a good number of them returning,” David states.

Anderson sponsors an annual golf outing to raise $500,000 to support a fellowship at the University of Tenn-essee supporting research in its cancer center, an homage to a son of Steve’s who died of brain cancer. “It’s an all-day event for contractors and business people, with tremendous support from our vendors,” says Joe Allen. “It speaks well for what the Colemans have done for the community.”

And that’s a lot, including giving back to schools, churches, the fire and police departments. “A SWAT team recently called to ask for windows and doors to blow up for practice,” Steve reports. Sure! That’s all in line with his dad’s credo: If we help kids and schools, we’re also helping parents. “He harped on building community,” says his well-taught son.

Speaking of schools, Joe says, “we have a good relationship with the high school shop teacher. He brings in his class four times a year and we walk through the store, the lumberyard, the shops. The kids build a little barn structure as part of the class and sell it out front.

He adds, “We recently spotted a sharp young man in the group. If he wants to sign on, we’ll hire him!”

All this sounds so positive that I almost hate to ask… but I do: I mention the R-word. Steve gets it. “I saw the recession coming. I told my son, ‘The bubble’s so big it’s bound to burst.’ So we started winding down a bit, watching real close. We quit selling to some contractors whose spec homes weren’t selling.”

Nonetheless, “It hit quick and hard. My son figured how much money we needed daily to keep the doors open, so we started downsizing. Not hiring when employees retired. Having to lay off a few people—the first time ever. Downsizing inventory. Selling a couple of big trucks. I volunteered to retire, but then I said I’d stay on, come to work two or three days a week without pay. Plus, we’d just started doing installed sales, which was growing really quick because, now when people couldn’t afford to build a house, they decided to remodel instead, using our cabinets, doors and paint. My son was in charge of the new operation, and when he died, it set us back”—adding business challenges to the devastating personal tragedy. The company did promote an assistant to head the division, which carries on.

The good news is, the future looks far brighter—“pretty strong, since the election. There’s a lot of building going on, both residential and commercial,” Steve notes.

Joe adds, “We now have access to a flooring company. We partnered with a local showroom in Knoxville to be able to offer one-stop shopping.”

Alcoa is attracting new businesses as well—an ammunitions factory, a gun factory, “lots of stuff going on. An office building at the University of Tennessee. It takes a team of us to work together and hammer out different parts of the materials list, get ’em some good numbers.” All that commercial activity means jobs are being created. And those new hires will need somewhere to live.

Wait, I have an idea for them….