Replacement window distribution -- from manufacturer to you
November 10, 2011
Window distribution can seem like a complex tangle, especially for those outside the fenestration industry. Manufacturers sell through several distribution channels, and each has separate channels of its own. By the time you purchase your windows from your contractor or your local big box store, chances are they have gone from the manufacturer through more than one channel. One thing is certain, however. As a homeowner, you cannot "buy direct" from the manufacturer.
Before the early 1980s, however, when windows were either wood or aluminum, all wood windows went from the manufacturer to a two-step distributor — in other words, a "middleman" or wholesaler who was two steps from the end-user. Aluminum window manufacturers sold to one-step distributors who sold to home improvement contractors, builders and homeowners — virtually anyone.
Today's replacement window distribution channels
With the end of the recession in the early '80s and the advent of vinyl windows, the structure of the supply chain changed. Today, few if any window manufacturers sell to two-step distributors. They sell through the distribution channels shown in the diagram below.
- Lumberyards. Traditionally, lumberyards were usually the only place in town where a homeowner, builder or home improvement contractor could go to purchase lumber and other building supplies. Manufacturers still sell directly to lumberyards.
- One-step distribution. Manufacturers also sell to one-step distribution channels that also sell to lumberyards at a higher price than lumberyards obtain from the manufacturer; however, the lumberyards benefit by being able to purchase in smaller, job-lot quantities from a one-step distributor. One-step distributors typically sell to "hook and ladder" contractors--the small contractors with a pick-up truck and a ladder who do siding, windows, roofing and other home improvement jobs–as well as large home improvement dealers and an occasional home owner.
- Home improvement dealers. These are the dealers that have an ad in the yellow pages, advertise on radio and TV, and usually sell premium windows through private, at-home sales demos. Home improvement dealers purchase huge quantities directly from manufacturers at prices that do not have a distribution margin, allowing the dealers greater margins.
- Projects. Builders of large construction projects, such as apartment complexes, military housing and tract home projects, often purchase directly from the manufacturer.
- Retail. Manufacturers sell to the big-box stores. These retailers sell to the do-it-yourself market and small contractors.
So where does the homeowner get the best deal--buying from a retail store, a small home improvement contractor or a large home improvement dealer? The answer, of course, is the same as it is for all major purchases: Buy from the source offering the best price and most responsive customer service…and don't cut corners on proper installation.