Molding a Niche In Local Home-Furnishing Market
Phil Reyes’ Moulding Center is situated less than a mile from such warehouse giants as Home Depot and Contractor’s Warehouse, but he’s not worried about the competition--in fact, he welcomes it.
His solution has been to specialize, and--most important--provide the kind of service that keeps contractors coming back.
“Sure, the big places like Home Depot can advertise more than I can,” said Reyes, who’s been the owner of the Moulding Center for 5 1/2 years. But Reyes said he doesn’t really target the home consumer. Instead, building contractors make up almost all of his business--and he counts on service and selection to serve that niche.
“I’ve heard that the average homeowner deals with molding one time in their life,” he says from his small Lankershim Boulevard store, an airy one-room space filled with racks of molding strips, post tops, stair parts and columns. “My customers are the professionals.”
And Reyes, with seven employees and 6,000 square feet of property, has been able to compete. When he took over the business, there was $80,000 worth of material in the warehouse. Today he maintains anywhere from $250,000 to $1 million worth. His philosophy, one that he repeats in mantra-like fashion, is to always keep a high standard of “pricing, quality and service.” In return, Reyes says, he has a very loyal customer base.
“Their service is very good, and that’s why I keep coming back,” said Luther Petoyan, an artist-decorator who was looking at molding in Reyes’ shop.
Large all-in-one stores don’t have the selection that Reyes has, says Mark Rolph, owner of Burbank-based MCR Construction, who’s been buying his molding at the Moulding Center for 10 years. “And Phil can get things for you quick. That’s really important.”
For Reyes, 47 and the grandfather of six, maintaining a business that’s as good as his word is a point of pride. And knowing who his customers are and focusing on their needs has been the key.
“When I bought Moulding Center, the company was trying to go retail and sell to the public,” Reyes said. “They only had three vendors. I now have between 40 and 50.”
Reyes, a Long Beach native, had spent 20 years working for a molding vendor--a company that supplies product to retail stores. But when the recession hit in the early 1990s, he says he had a philosophical split with the company.
“I was telling my bosses that we needed to lower our profit margin and work with a higher volume of material,” he said. “I also thought even though we were a vendor, we still needed to get out there and help our distributors sell the product.”
Reyes’ bosses didn’t agree, and Reyes left the company. He was looking to work for another vendor when he heard that the Moulding Center was up for sale.
Reyes qualified for a small business loan and bought the business with Moulding Center owners Rodd White and Richard Davidson, who carried the lion’s share of the debt on the purchase. “For the first eight months I had ulcers,” he admitted. “I always made sure everyone was paid, but my wife and I were living on our credit cards.”
And then he began to slowly build the business, convincing the store’s longtime customers that he had a new list of prices and that his service couldn’t be matched.
“I think the most important thing you have is your reputation,” Reyes said. “Whenever there’s a problem, I’m always more interested in reconciling it than in just having the problem go away.”
Reyes also has focused his business mainly on the San Fernando Valley, with secondary markets in Orange County and Santa Barbara.
“So many companies have focused their energies on the Las Vegas market,” he said. “But the competition is so stiff for that market that your profit margin is extremely slim, probably 10% to 12% if you’re lucky.”
And Reyes is wary of the huge deals that are being done with the expanding hotel and casino industry in Las Vegas--which have a huge appetite for decorative moldings.
“The potential for financial hardship is great,” he said. If a customer who places a huge order doesn’t pay on time, he explained, the business can’t afford to maintain stock for other buyers.
“I think you do a disservice to your bread-and-butter base at home when you go too far afield,” he said.
As for his stock, it varies widely, from the more expensive full wood moldings made of cherry, mahogany, oak and maple to the composite filler molding--which is glued to wood and a third less expensive--and the newer fiber boards.
In addition to moldings, Reyes’ company also carries stair parts, columns, post tops and doors.
Last week, after 5 1/2 years, Reyes made his final payment to White and Richardson. He says that in coming months he will be looking either to expand into an adjoining site or to move the business to another Valley location.
“We really need to go to 20,000 square feet,” he said, noting that he can get a better price on materials bought in larger quantities.
As for keeping the business on track, Reyes is dedicated. He’s often at work at 6:30 a.m., works a full day and then runs 25 to 50 miles a week. He’s planning to compete in the 2000 Los Angeles Marathon.
“I believe we’ve earned loyalty from our customers in this industry,” he said, “but it’s not something I take lightly. We have to continue to earn it every day.”
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WEB LINKS
For more information:
forestind.com/: Forest Industry Network. Industry news, publications, equipment and products.
www.fs.fed.us/land/fm/: USDA Forest Service site, timber stats and more.
www.metriguard.com/links.htm: Lots of lumber industry links.
www.vintagelumber.com: Source for salvaged vintage lumber.
www.mountainlumber.com: Ditto. Politically correct, but not cheap.
www.ebuild.com: Environmentally responsible building tips.
www.huduser.org/publications/destech/lumber.html: Housing and Urban Development’s publications on lumber.
* Sites subject to change.
