From the Central Penn Business Journal.
Barbara Costik, left, administrator at Middletown Lumber, jokes with Pat Carney, who runs the company’s woodworking shop
During the 2008 recession, which fell particularly hard on construction-related companies, the team at Middletown Lumber tightened expenses, shopped around for insurance, added new products and kept a close watch on overtime. They also had to lay off a delivery driver.
These days, they are looking for a formula that will boost sales and ensure the company’s future. That search has led Middletown Lumber to reach out more aggressively to potential customers while sticking to the niche it knows best, wood, and remaining open to other business possibilities.
“I think we do have a lot to offer, and I want to share that with people,” said Costik, who serves as the company’s administrator.
Her mother, Jeannie Zelda Costik, known affectionately as Jay Z, is the owner. Her older brother, Eddie, worked in the business, but retired in 2011, leaving something of a hole.
“He was the spokesperson,” Barbara Costik said.
Success won’t come easy. Big-box chain stores dominate the building materials industry, selling to both contractors and handy homeowners, the same customers served by Middletown Lumber. Amazon and other online retailers also take a growing share of business.
Family-owned lumberyards, meanwhile, have become a rare breed. And there is no guarantee of survival, no matter how deep their roots. Nearly two years ago, the family-owned Eberly Lumber Co. in Mechanicsburg shut down after 155 years in business.
Costik and her colleagues are confident there is enough business out there for Middletown Lumber, which does between $1.5 million and $2 million in annual sales. But they aren’t waiting for it to walk through the door.
Over the last year, they have been seeking it out, combing through lists of customers they haven’t heard from in a while and reaching out to win them back. They also are dialing up new contractors whose online reviews catch their attention.
Middletown Lumber is especially interested in small remodeling businesses that can appreciate the higher-grade wood products sold by the company, said Chris Nagle, Middletown Lumber’s manager.
“I think that’s where our future is,” said Nagle, who has worked at Middletown Lumber since 1994 after being laid off from Hechinger’s.
Nagle spends a portion of his time on the road visiting contractors and rekindling relationships. “These guys don’t have time to come here,” he said.
It is a formula that has worked for other family-owned lumber yards, said Scott Morrison, a New Hampshire-based consultant in the lumber and building materials industry. His clients are primarily family-owned companies, and they are in an expansionary mood following the retrenchment of the recession.
But growth takes work. “You can’t sit back. You’ve got to get people pounding the pavement and making the phone calls,” Morrison said.
It makes sense to start with contractors who have been customers in the past, he added. But it also is vital to ensure product quality and customer service remain strong.
“This is a very high-touch industry,” Morrison said. “You’ve got to work extremely hard to earn the client and earn their business and then to maintain it.”
Knowing the job
Chris Nagle, top right, is manager at Middletown Lumber. Clockwise from bottom right: Hardwood samples on display at the company; the warehouse office; exotic woods, including leopardwood and purpleheart wood. – (Joel Berg)
“Everybody knows their job and does it well,” Nagle said.
Their operation, a block off the main drag in downtown Middletown, consists of four basic parts.
There is a retail storefront, where customers can find displays of hardwood flooring and contractor-quality, German-made Festool power tools, among other items.
Along one wall are planks of more exotic woods, including leopardwood and purpleheart wood, which is truly purple. Costik said she is considering adding an antiques section to the sales floor.
Behind the retail front are sheds stocked with two-by-fours, plywood sheets and other materials. Across the street is the warehouse, laid out so that delivery trucks can pull in one door, load up, and then pull out another.
In a separate building sits the company’s woodworking shop, overseen by Pat Carney, who takes pride in tackling the many challenges that customers throw at him. They have included requests to make replacement table leafs and fireplace mantles.
About 60 percent of customers these days are do-it-yourself homeowners, Nagle said. They select the wood and Middletown Lumber cuts it to requested dimensions – using equipment that is decades old but lovingly maintained.
Most customers are within driving distance, but many come from farther afield thanks to the internet, Costik and Nagle said. Middletown Lumber is known for its cedar products, and has gotten calls from as far away as California from people Googling the term.
For the last 20 years, the company also has delivered wood to Connecticut-based World Wrestling Entertainment, which uses the limber to make support structures for wrestling rings. The work came courtesy of a WWE employee who lived in Middletown, Nagle said.
Business also comes from contractors who occasionally descend to do work on the nuclear power plant at nearby Three Mile Island, Nagle said. The contractors call for supplies and Middletown Lumber tracks down the goods, even if the company doesn’t carry them itself.
The challenge, of course, is to keep the phone ringing. Nagle acknowledges that he still often talks to people locally who have never heard of Middletown Lumber.
But it is a situation Costik, Nagle and their colleagues are working to change – not because they want to be the biggest business on the block, but because they love the business they have made their own.
“It’s my family legacy,” Costik said, “and I want to see it succeed.”