Customer Success Story : Fitch Lumber Company
How this lumber company increased profits by 400%
Fitch Lumber & Hardware
Fitch Lumber & Hardware Co. opened in Mebane, North Carolina, in 1907 to serve the Raleigh-Durham-Chapel Hill area of the state. The company moved to its current location in Carrboro, North Carolina, in 1923. Today, it is a fourth-generation family-owned business operated by the founder’s great-grandsons, Miles, David, and John Fitch.
Fitch Lumber supplies building materials and construction expertise to architect-driven custom homebuilders and remodelers of homes of at least $800,000 but mainly in the $1 million and up range. The company helps
contractors complete 100-plus homes annually.
“We are a niche market, working with architects who build or remodel one-of-a-kind, not cookie-cutter homes,” says Miles. “We are lucky because we are in what is known as the Research Triangle Park, with the University of North Carolina and Duke University here. Many buildings are in historic districts, where remodeling homes has to be done a certain way and can often cost more than building new ones. Also, a lot of people are relocating to North Carolina, especially from New York, California, and Massachusetts. People like it because we are no more than three hours from the mountains or the beach.”
increase in profits
monthly postage savings
hours saved weekly in AR
The challenge
Fitch Lumber was an early adopter of Lumber and Home Improvement Building Materials (LBMH) business software, starting with ECI’s Enterprise in the 1980s. The company migrated to ECI Advantage in 2001. In 2018, when ECI announced Advantage was going to be discontinued, Miles and David knew it was time for a new, more advanced system.
“My intention was to make it so any of my users could work from any location, at any time, with no reduction in functionality, something we couldn’t do with our old system,” Miles says. Another issue the brothers wanted the new software to solve was inefficient inventory management, which was reducing productivity and making training new hires difficult. The typical time from a sale to customer payment was almost two months, restricting cash flow. Meanwhile, customers’ inability to view their accounts and pay online was costing the AR department time and the company $500 a month in postage. The Fitch brothers wanted software that would streamline their operations and increase profits.
“ ECI’s Spruce fit our criteria perfectly, allowing us to go from a solely on-premises business model to one that gave our management team and customer account managers full autonomy. It allows us to provide an improved level of customer service beyond our brick-and-mortar location.”
The solution
Miles and David started reviewing various software. Spruce was the clear winner. “ECI’s Spruce fit our criteria perfectly, allowing us to go from a solely on-premises business model to one that gave our management team and customer account managers full autonomy,” Miles says. “It allows us to provide an improved level of customer service beyond our brick-and-mortar location.”
Once the decision was made, the transition, which was made in tandem with upgrading to Microsoft 365, took about a year. Spruce went live in 2020. It gave Fitch Lumber the flexibility Miles was looking for—and a lot more.
The impact
“Spruce allowed us to transition from solely on-premises business transactions to our management team and customer account managers having full autonomy,” Miles says. “This has enabled Fitch Lumber to provide an improved level of customer service beyond our brick-and-mortar location.”
In addition to the ability to connect remotely, Spruce’s inventory management capabilities are vastly improved, which has increased productivity and made training new hires easier.
“We have four warehouses totaling 40,000 square feet,” Miles says. “Before Spruce, employees would have to know the type of wood and where it is stored or ask someone. Now, I can send my 14-year-old daughter, who has no idea where or what something is, to find an item by following the code. It’s made locating materials 400% more efficient.”
Another efficiency Spruce has brought the company is the ability for customers to see their orders and pay online with a credit card or ACH account, a feature that has proved to be a win-win. “Customers like being able to view their account and pay online,” Miles says. “It has lowered the days between sale and payment from 55—almost two months—to an average of 35. Now we only mail invoices to maybe 15% of our customers and are saving $500 a month in postage. It also saves our very talented AR person 10 hours a week that can now be spent on other non-clerical duties.”
As a business owner, Miles particularly likes having real-time data at his fingertips. “I use the great analytics tool every day. It lets me see everything I need to know to run my business in less than five minutes.”
Ultimately, thanks to Spruce, Fitch Lumber has increased its revenue by nearly 200%—from $11 million to $20 million annually—and its profits by 400% with only a 10% increase in payroll.
According to Miles, the brothers have had no problem deciding where to spend the extra money: “Almost all of the increased profits have been reinvested into our company in infrastructure improvements, upgrading the vehicle fleet, purchasing capital equipment, adding a window and door sales and installation department, and increasing wages, benefits and profit-sharing bonuses for all employees. Last year, we gave out $100,000 in annual bonuses to our employees. Before Spruce, it was a quarter of that amount.”
“I can send my 14-year-old daughter, who has no idea where or what something is, to find an item by following the code. It’s made locating materials 400% more efficient.”
A personal connection
The Fitch brothers appreciate all the benefits the company has experienced since switching to Spruce. Yet they remain most grateful for one.
“In March of 2021, David’s 10-year-old son, Lee, was struck by a car while riding his bike, resulting in a traumatic brain injury,” Miles explains. “After spending two weeks in intensive care at UNC Hospitals, his son was transferred to an inpatient pediatric rehabilitation clinic in the Emory Hospital system in Atlanta. He spent three months there recovering, and David spent nearly the entire time with his son. In between all his son’s physician appointments and rehabilitation, David was able to use Spruce and Microsoft 365 from the hospital, the physical therapist’s office, his friend’s house in Atlanta where he stayed—pretty much anywhere that he had an internet connection. Just 18 months earlier, with our outdated on-premises business systems, this would have been impossible. Having the ability to keep tabs on our business provided David with a much-needed sense of normalcy during such a challenging time. It kept him connected.”
A special note:
David’s son made a full recovery, is doing well, and is back to playing the sports he loves. Further, with the help of UNC Hospitals and UNC football coach Mack Brown and his wife, Sally, Fitch Lumber is now on a quest to raise $20 million to build a comprehensive pediatric rehabilitation center at UNC Hospitals, similar to the one at Emory Hospitals in Atlanta, so injured children can remain in North Carolina for this type of specialized care.