Case Studies

Prince Building Systems

Dividing and conquering in the Midwest building market

Prince Building Systems (PBS) emerged as its own enterprise just five years ago, but the wholesale building materials distributor’s history traces back to nearly a century ago. “Our parent company, Prince Corporation, dates back to 1909 when it started as a small mill operation,” recounts Dan Swanson, president of PBS. “We shipped products via railcar to mills, which at the time were like general stores.”

Prince Building Systems, US Builders Review

Shared success

During the post-World War I and World War II years, soldiers returned home to neglected properties and turned to these local mills for building materials and restoration. “The Koenig’s, the original founding family, looked into it and realized they could supply building materials through an already established delivery schedule,” recalls Swanson. “PBS is the result of Prince Corp’s entrance into the building materials market.”

Today, Prince Corp specializes in ag-related products, from pet care to lawn and garden, seeds and animal feed. “As lumber yards grew and became larger and more independent, Prince Corp ownership saw the need to split the building materials side off as its own entity, so five years ago that’s what happened and PBS is now its own standalone sister company,” explains Swanson.

It is evident that the company’s roots run deep. “In reality, we’ve been doing building materials for more than 60 years, but we came into separate existence five years ago,” continues Swanson. “PBS has its own location and I have my own sales force, purchasing and management, but we do share some resources, such as transportation and human resources, with our parent company.”

Retailer direct distribution

Based in Neillsville, Wis., PBS distributes a wide range of exterior building materials, from siding, decking, roofing, underlayment, metal edging, doors, windows and insulation down to nails, bolts and fasteners to local retail lumber yards and manufactured housing. “We are a true two-step distributor selling specifically to lumberyard customers,” explains Swanson.

PBS covers a sizable amount of ground in the Midwest, including its home state of Wisconsin, the U.P. of Michigan, half of Minnesota, the northeast corner of Iowa and northern Illinois. “In total, we serve five states,” says Swanson. “On the other hand, Prince Corp has three locations; Indiana, Illinois and its headquarters in Wisconsin, and serves 16 states.”

Both companies rely on yet another Prince Corp subsidiary; Prince Transportation. “Prince Transportation has semis that go out on a route to our customer base twice a week, doing anywhere from five to 20 stops in about a 300-mile radius,” notes Swanson.

Prince Corp, as a whole, has more than 35 semis on the road daily, covering 16 states. “The analogy I like to use is that PBS is the thumb of Prince Corp,” explains Swanson. “As we’ve evolved, the building side didn’t fit with the ag-feed side, but we still share some resources, transportation being a big one.”

Swanson’s PBS staff encompasses six outside salespeople serving five states and six inside sales reps, as well as a purchasing manager, general manager and warehousing staff. These professional teams have built solid relationships with building material dealers throughout the company’s service areas.

Covering the exterior

PBS covers the complete exterior scope of buildings based in partnerships with high-quality vendors that deliver premium products backed by outstanding service and competitive prices. Weekly scheduled deliveries allow customers to choose from thousands of warehoused items and hundreds of items offered through drop-ship programs. The company’s well-stocked warehouse consistently delivers order fill rates exceeding 96 percent.

“We offer everything for the exterior of the home: siding, roofing, Quality Edge soffit and fascia, windows and doors,” Swanson details. “We also stock and distribute three manufacturer brands of vinyl siding: Heartland by Provia, RMC a Stylecrest Company and Gentek Siding, as well as three different asphalt shingle lines: CertainTeed, Atlas and Owens Corning and specialty metal shingles manufactured by Decra,” details Swanson.

PBS markets to its customers in a variety of different methods; monthly promotions, sell sheets, booking programs, product catalogs – both in-hand and online – as well as displays and product information brochures. If these avenues do not provide sufficient information, the company’s on-call inside sales team makes sure customers can access the information needed.

PBS also holds an annual buying show, which is a unique opportunity to gather customers in a central location and offer special buys and promotions. “It also serves as an appreciation for their business; we give out door prizes, room accommodations and provide great food and refreshments, along with the interactions with vendors and our staff,” Swanson says proudly.

“We’ve recently partnered with Owens Corning, a Toledo, Ohio-based shingle and insulation manufacturer,” shares Swanson. “These products have been well-received and have helped to strengthen our position in the Midwest marketplace.”

Feeling the economic pinch

Even with the longstanding name and history behind PBS’ parent company, Swanson admits maintaining a strong position through the recession has been a hurdle. “Just looking at the financials, our transportation costs have gone up by 14 percent and there’s always the challenge of finding drivers and skilled warehousing staff,” he says.

As PBS’ customer base relies more heavily on distribution, Swanson says his customers are stocking fewer products due to carrying costs and overhead. “We’re seeing more stops per truck than we used to,” he adds. “We used to make five stops, now it’s as many as 20 to fill the truck. All of this takes time and because of new driver compliance and regulations on hours behind the wheel, it ends up being a two-day delivery.”

Back to core competencies

Despite a hike in transportation and delivery, Swanson says PBS has had a strong first quarter. “Sales in the first quarter of 2014 are looking up, but competition has eroded margins, so you try to differentiate yourself,” he explains. “We’re asking ourselves what we can do different or better and customer service is a huge portion of that.”

While innovation is key, a company’s origins keep it afloat. “We’ve found we’re going back to our roots in the lumber yard,” continues Swanson. “Since Prince Corp and PBS’ products travel in the same trucks, we’re working together to bolster success for both and find new avenues for revenue streams by cross promoting the companies. For example, lawn and garden now offers decking to go along with landscaping; this kind of co-dependent relationship between companies has pulled us through tough economic times.”

Now that PBS is through the worst, Swanson says the company is in growth mode. “We’re growing and so is Prince Corp,” he reveals. “In fact, Prince Corp just acquired a competitor in Illinois, bringing it up from about $55 million annually to about $85 million; combine all companies and you’re looking at sales exceeding $105 million.”

Swanson says the possibility of an additional location or satellite office for PBS is a not too distant reality. “We’re looking to expand our reach in the coming years,” he assures.

Through a network of top-notch dealers and manufacturers and a strong parent company foundation, Prince Building Systems is growing as a standalone, major Midwest market player.

Published on: January 14, 2015

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