Factors Behind Construction Companies Wood Products Purchasing Decisions: Supplier Market Impact

Companies in the construction industry have a wide range of suppliers to choose from to meet their building material needs. Local (in-state) suppliers within key southern states in the United States face challenges gaining market share within the construction sectors. Construction companies often outsource their purchase of wood products from a different state or country, which adversely affects the local economy as a result of loss of revenue. However, if companies were limited to in-state supply it would affect trade across states and countries; but the focus was to improve local wood products supplier market impact. Companies within the states of Georgia, Texas, Oklahoma, South Carolina, Florida, and Virginia were interviewed by phone and in person to determine how companies chose wood product suppliers and what factors affected their purchasing decisions. Key factors included cost, quality, delivery, flexibility, location, relationship, and payment options. A survey of construction companies was conducted after the interviews were concluded. Important factors highlighted by responses included cost, quality, relationship, and lead time in choosing a supplier. Suppliers were asked to differentiate their products using information the construction companies highlighted as factors they emphasized. In-state wood product suppliers have an opportunity to gain market share within the construction industry using the factors those construction companies favored in interviews and survey results.