Technologies Inc. is sitting at a boardroom table in his company's smartly appointed head office, explaining how he aims to revolutionize the building-supplies business. As he talks, he scribbles diagrams on a notepad. Jeff Booth is a rambler with a fondness for industry jargon, and the notepad helps keep him on point. Stretching across the wall-length whiteboard behind him is an elaborate schematic studded with purple sticky notes—a visual aid in a regular lean-out process aimed at spotting and expunging inefficiencies at BuildDirect. It could be a sketch of Booth's brain, which moves faster than words can carry him.
BuildDirect's digs near Vancouver's financial district befit an up-and-coming dot-com. Awash in natural light, the open space is punctuated by polished concrete pillars atop deep-brown hardwood. The staff average 28 years in age. Booth, trim and fastidious in a lilac shirt, dark pinstripe slacks and black loafers, fits right in.
But the 43-year-old entrepreneur is no stranger to the blue-collar industry he's seeking to transform. Booth used to build houses for a living, and when it comes to his sector's shortcomings, he shares the missionary zeal of tool belt-wearing TV star Mike Holmes. "We got into this business because we felt pain for the customer," says Booth. He discovered that the best way to ease that suffering was by harnessing the data his customers were giving him—an area of huge opportunity for many kinds of businesses. In the process, he aims to create nothing less than the Amazon.com of flooring, decking and roofing.
The building-supplies industry is hidebound and ripe for streamlining, Booth argues. Founded in 1999, BuildDirect offers do-it-yourselfers and contractors significantly lower prices than Home Depot, Lowe's and other big-box retailers. It can do that because it brings the manufacturers much closer to the customers. By analyzing demand patterns on its website, BuildDirect can predict buying surges for particular lines and share that information with suppliers. As a result, its warehouses stock the right products—which vendors give BuildDirect on consignment—at prices that keep them moving.
But that alone wouldn't address the pain of consumers, who account for about 60% of the company's sales. "Our key [customer] is Debbie Do-It-Yourselfer," Booth says. And, as Booth knows from his previous career, sourcing building supplies can be confusing and fraught with delays for a professional, let alone a DIYer. When Debbie wants to buy new tile for her kitchen floor, she faces a long and winding supply chain. It starts with a manufacturer, then moves to a trading house or exporter, both of which could be in Asia, explains Booth. On this side of the ocean, there's an importer or wholesale distributor that sells to a regional distributor, which in turn supplies retailers.
Getting suppliers to give him goods on consignment is the biggest coup I ever heard of in e-commerce.
Each of these steps means markups and holdups. By eliminating most of the middlemen, BuildDirect saves Debbie an average of 50%, Booth estimates. More important, the company reduces the intimidation factor. "The biggest part [for the client] is that thought: 'This industry is absolutely overwhelming, how do I navigate it?'" Booth says.
So, BuildDirect keeps things simple and transparent. While most of its competitors charge for product samples, BuildDirect sends them out for free and follows up with a call from a sales representative. When Debbie places her order online, the website quickly calculates shipping costs and provides a delivery date. She pays for freight, but BuildDirect has a 30-day money-back guarantee that includes the shipping outlay—something it can offer in part because it's figured out how to transport heavy packages expediently.