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How to Compensate for the Covid-Craze We Now Live In

Wow, what a year it’s been! The difficulties we have all been facing this year to provide for our families and keep a sense of normalcy has been quite difficult. Yet, as partners in our industry, we’ve all come together and made the best of it. In fact, business in the Tri-State Flooring territories has been booming! People keep flooding into our territories pushing building and remodeling to an all-time high. Without a doubt, it’s been a silver lining to what undoubtedly would’ve been a forgettable 2020 year. The pandemic has presented many challenges to our way of life, but also in the way we produce, transport and receive goods. Because of this, we’ve noticed an unprecedented effect on our material costs. Read the story below to see what one company in our industry has experienced.
In the lumber industry, Ruffin and Payne Lumber Co., a family-owned business of 40 years in Richmond, Virginia, shares staggering lumber price increases due to the pandemic. They produce everything lumber-related including 2x4s, OSB and deck boards. 
“It’s been crazy,” company President George E. Haw said. “I’ve been around a long time, and I have never seen a lumber market behave like this in 40 years.”
The price per 1,000-board feet of lumber sky-rocketed from $400 to a staggering $900. This means, a new 2500-sqft home would cost an additional $20,000 in lumber alone.
A Mind-Reset When Working with Builders
For those of us who work with builders, we know that when working within a builder’s budget, the commodity that often gets minimized is the flooring expense allocation. Because flooring is usually the last component to get installed, that becomes the natural place to cut back. Looking back over the years, we have been able to satisfy these cutbacks by still providing quality floor at reasonable builder prices. Fast-forward to 2021, with its high tariffs and shipping costs, and we are forced to increase our prices to compensate. 
The common cost range requested by builders in the TSF territories is $2.99 and $3.99. Here’s where we need a “mind-reset”. We all compete to provide the best quality product we can while still staying within the budget, and this may still be possible with lower-quality products. But is lowering costs or cutting corners with a product you wouldn’t even put in your own house worth the headache that will surely come later? I think you, and your builders, would agree that wasting time and money fixing issues on a project after it’s complete that could have been avoided should be considered BEFORE the flooring has even been selected. 
Before you try meeting the low-price requests because the builder’s project is going over budget, consider this. Set a standard on quality for the goods in your store, if you haven’t already done so, and stick with it! MACA05 Your time is valuable so keep your margins where they are and don’t cut yourself short. Keep in mind that with material costs rising, your ability to meet builder rates needs to change as well. Make sure your builders know that the old pricing structure won’t work with the new changes. For example, what you used to sell for $2.99 has been reset to $3.29 and your $3.99 product is now $4.29.
When lumber companies’ material costs increased by more than 50%, builders eventually accepted it and adjusted their prices to compensate. Even though the flooring industry has not seen that kind of increase, we have noticed some changes. Builders will accommodate for our price increases as well. Let’s not sacrifice our quality and time, trying to meet a low budget. We need to accept what we cannot control and continue to do what we love, while continuing to turn a profit.
– Trent McDowell