It’s a whole new management team taking over at BuildDirect.com Technologies Inc, which specializes in selling large quantities of building materials and finished products for home improvement projects.
And the focus is pretty clear: BuildDirect wants a bigger share of the business-to-business home-improvement e-commerce market. Online home improvement sales grew 34% in the United States last year to reach nearly $20 billion, according to research firm NPD Group, which says its data refers mostly to retail sales to consumers.
Dan Park, CEO, BuildDirect.com Technologies
BuildDirect, based in Vancover, British Columbia, generates more business-to-consumer than B2B e-commerce sales, which for both groups combined grew 18% to estimated web sales of around $250 million, based on metrics contained in Internet Retailer’s Top 1000, an annual ranking of the biggest U.S. web merchants.
BuildDirect won’t break out specific sales, but next year the online merchant and marketplace operator expects B2B sales to account for at least 50% of all revenue and possibly higher, CEO Dan Park tells B2BecNews. “Our focus is on B2B,” he says. In March, B2B sales accounted for about one-third of all sales, the company says.
It’s been about 18 months of change for BuildDirect, which in early 2016 launched Home Marketplace as an online portal where buyers, including professional building contractors and individual consumers, can purchase from a number of manufacturers and distributors. Products range from roofing and flooring materials to furniture and granite countertops.
Park took over as CEO last October after the resignation of CEO Jeff Booth, one of the company’s founders. In November 2017, the company was granted court protection from creditors under Canada’s Companies Creditors Arrangement Act, which allows insolvent corporations owing their creditors in excess of $5 million to restructure their business and financial affairs.
Since then BuildDirect has been on a rebuilding effort that is focused more on B2B and serving more business buyers and sellers on its marketplace, which include smaller home contractors and sub-contractors. These smaller contractors include home decorators with project budgets of $30,000 to $50,000, boutique hotel operators that may purchase several hundred thousand dollars of new carpeting multiple times per year, BuildDirect says.
Just this week BuildDirect added four new executives to its ranks of top management—including two (like Park) with previous stints at Amazon and Amazon Business. The latest hires include newly minted chief revenue officer Ken Stanick and new chief technology officer Mukund Mohan—both come to BuildDirect with lots of experience from Amazon Business, the B2B marketplace of Amazon.com Inc.
BuildDirect also hired also has hired Amazon veteran Godwin Pavamani, who was Amazon’s global product leader for Prime Samples and head of vendor management for the personal computers/IT products category, as chief merchandising officer and general manager of marketplace. The latest hire was Stephanie Roberts, who is BuildDirect’s new interim chief financial officer.
Other recent hires include Larry Ellis as vice president, Gateway Supply Chain, a shipping service for bulk items for manufacturers, distributors and wholesalers. To pay for expanding its business, BuildDirect has raised more than $138 million from investors over time, including $28 million in March from Mohr Davidow Ventures, the company reported. Also in March, BuildDirect emerged from bankruptcy protection
In the past two years BuildDirect has grown its online inventory from about 6,000 SKUs to “north of 100,000,” Park says. Now with new top managers in place, BuildDirect is out to update its marketplace with new services that will attract more B2B buyers of such home improvement supplies as flooring and decking materials.
The company has been hiring top managers with Amazon and Amazon Business experience because it wants to build out the kind of personalized buyer and seller services Amazon offers on its online marketplace. Overtime BuildDirect wants to focus on such categories as flooring and differentiate itself from The Home Depot and other big chain retailers that also cater to business buyers. “Their focus is on nails, hammers and more of an in-store experience,” Park says. “We are looking to differentiate ourselves in the supply chain with a focus on smaller to medium sized buyers.”
Today, BuildDirect’s online marketplace offers monthly access to about 2.5 million shoppers, the company says. In May, BuildDirect rolled out its latest initiative: flexible financing options to pay for home improvement and renovation materials over time. BuildDirect is working with Affirm Inc. to offer buyers 6-, 12-, or 18-month payment terms at competitive rates and with tools that let buyer see exactly how much they’ll pay in fixed monthly installments over their chosen lending period, BuildDirect says. “A key hurdle for many working on home remodeling projects and renovations is cost, as large or bulk purchases of products such as flooring can be very expensive,” Park says.
With new options and services, BuildDirect is out to carve out market share in several new areas, including the 700,000 construction companies in the U.S. and the $25 billion flooring industry, Park says. “We have a renewed focus on general contractors, interior designers, installers, and property developers or builders,” he says. “Homeowners look to professionals for product sourcing, and more Pros are shopping online for better price, product options and convenience.”
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