Can you pls compare it with BUILDDIRECT (BD), an incoming flooring retailer. They say their moat is
1- ecommerce + only dealing with Pros (not home owners) who want to buy, usually in small bulk
2- Cheaper prices like FD, I am not able to come up with an Apple-to-Apple price comparison. Also, both keep limited SKUs, as per my information
2- They deal with all types of sectors, which acts as a cushion in bad economies, for example, if the economy is down in new residential construction, then it might be up in commercial. They say HD and FD deal with major homeowners, not with Pros. Idk who to believe, yours or theirs, as you also say that FD deals with Pros. idk who is right?
The CEO is a major game-changer, who turned the company around in the last 2 years based on his 20+ years of flooring business. I only look at the BD of the last 2 years.
I am trying to find how BD can compete with a big fish like FD and how they can both exist in the same space, if the market is so fragmented. BD also acquires small mom-and-pop stores, while FD does not. BD also supplied to mom and pop stores, hence on 1 side they are supplying to them, but also at the same time, these mom and pop stores are competitors.
The market is large and modestly growing, so new entrants can still find room. Pros don’t concentrate all spend with one banner (HD/LOW/FND/BLD), though spreading it out may forgo some incentives. Mom-and-pop shops likely keep ceding share to scaled players.
BLD is small. From a quick read of their deck, they appear to lean on an e-commerce model that’s atypical for the category. Do they direct-source? Even if so, I doubt they match FND’s supplier pricing.
On inventory days basis, HD and LOW look similar; FND’s inventory days are ~2× higher (it carries more stock).
What is the competitive moat of BLD? why do you think this is sustainable?
Hope this helps caveat is that I’m not close to the BLD story.
Can you pls compare it with BUILDDIRECT (BD), an incoming flooring retailer. They say their moat is
1- ecommerce + only dealing with Pros (not home owners) who want to buy, usually in small bulk
2- Cheaper prices like FD, I am not able to come up with an Apple-to-Apple price comparison. Also, both keep limited SKUs, as per my information
2- They deal with all types of sectors, which acts as a cushion in bad economies, for example, if the economy is down in new residential construction, then it might be up in commercial. They say HD and FD deal with major homeowners, not with Pros. Idk who to believe, yours or theirs, as you also say that FD deals with Pros. idk who is right?
The CEO is a major game-changer, who turned the company around in the last 2 years based on his 20+ years of flooring business. I only look at the BD of the last 2 years.
I am trying to find how BD can compete with a big fish like FD and how they can both exist in the same space, if the market is so fragmented. BD also acquires small mom-and-pop stores, while FD does not. BD also supplied to mom and pop stores, hence on 1 side they are supplying to them, but also at the same time, these mom and pop stores are competitors.
Your guidance would be appreciated.
Hi Ahmad,
The market is large and modestly growing, so new entrants can still find room. Pros don’t concentrate all spend with one banner (HD/LOW/FND/BLD), though spreading it out may forgo some incentives. Mom-and-pop shops likely keep ceding share to scaled players.
BLD is small. From a quick read of their deck, they appear to lean on an e-commerce model that’s atypical for the category. Do they direct-source? Even if so, I doubt they match FND’s supplier pricing.
On inventory days basis, HD and LOW look similar; FND’s inventory days are ~2× higher (it carries more stock).
What is the competitive moat of BLD? why do you think this is sustainable?
Hope this helps caveat is that I’m not close to the BLD story.