Net Manufacturer Revenue vs. Revenue Per Location

United States dealers sold $2.9 billion of residential trim products in 2019. This included $2.1 billion in net manufacturer revenue and yielded a total channel margin of $800 million. The number of dealer locations selling residential trim totaled roughly 18,000 throughout the U.S in 2019.

Two-step distribution accounted for 65% of overall product distribution and is more commonly used for the heavier wood and wood-like products. Lumberyards lead the retail side of supply, selling 56% of total net manufacturer revenue followed by specialty one-step accounting for 24%. Figure 1 provides net manufacturer revenue by channel along with location counts by channel from Principia’s dealer locator database. The bubble size reflects net manufacturer revenue for a given channel. For example, lumberyards sell about $1.2 billion of trim products from roughly 6,300 locations, yielding an average revenue per location of just under $200,000.

Figure 1: Net Manufacturer Revenue & Location Count by Channel

Lumberyard and Specialty One-Step Comparison

Figure 2 provides a comparison of lumberyards and specialty one-step for residential exterior trim distribution. Lumberyards generate the most overall revenue as well as the highest average revenue per location compared  to specialty one-step.

Figure 2: Lumberyard and Specialty One-Step Comparison for Exterior Trim

What does this mean for manufacturers?

An analysis of both product revenue by channel and the number of locations provide insights helpful in refining channel strategies. For instance, targeting the lumberyard channel would require servicing a larger number of locations but would likely yield a better revenue per customer and potentially provide a wider geographic audience, particularly among builders.

Principia can help industry participants use this information to support their business initiatives. More information about residential trim supply and distribution is available for purchase in four product offerings designed to meet your specific needs: Product Supply Snapshot, LBM Dealer Locator, SupplyBuilder^®, and BuilderSeries^®.

For more information about Principia’s supply and distribution products for residential trim, contact us today.