# TLC Seasonal Pricing Strategy — Spring/Summer 2026 *Generated: April 3, 2026 | Rob Lobster 🦞* --- ## The Opportunity Window: NOW Through August TLC has two distinct customer segments: 1. **Year-round contractors** — volume base, price-sensitive, competitive bids 2. **Seasonal residential customers** — March through August, less price-sensitive, margin opportunity **The residential window is OPEN RIGHT NOW.** This is where TLC captures margin above 31%. --- ## Current Lumber Market Context (April 2026) - **Lumber futures:** ~$580-600/1,000 board feet (CME physical, May delivery) - **Range since Aug 2022:** $450-$712/1,000 board feet — we're at the midpoint - **Seasonal pattern:** Prices typically peak in spring/early summer, bottom in fall/winter - **Framing lumber:** Prices increased for the second consecutive quarter (Gordian Q1 2026) - **Treated lumber/decking:** Making a leap — seasonal demand driving prices up - **Canadian lumber duties:** ~45% combined tariffs on Canadian imports (supports domestic pricing) - **Mortgage rates:** Trending slightly lower (TLT making higher lows), could boost renovation demand - **Fed Funds Rate:** 3.625%, expected to decrease under incoming Fed Chair Kevin Warsh **What this means for TLC:** Wholesale costs are moderate and stable. Spring demand is ramping. This is the window to capture margin BEFORE contractors lock in summer quotes. --- ## Pricing Strategy by Category ### 🔨 Category 1: Framing Lumber (2x4, 2x6, 2x8, 2x10, 2x12) **Target: Contractor pricing stays competitive, residential gets seasonal markup** - **Contractor accounts (house accounts):** Market price + standard margin. No change. Retain the volume. - **Residential/walk-in:** Market price + 5-8% seasonal premium (April through July) - **Rationale:** Homeowners doing spring projects don't price-shop lumber the way contractors do. They value convenience, proximity, and advice. - **Epicor execution:** Create a separate price level for residential walk-in vs. contractor accounts ### 🏗️ Category 2: Treated Lumber & Decking **Target: Maximum margin capture — THIS is the seasonal goldmine** - **Current market:** Treated lumber and decking prices are "making a leap" per Gordian Q1 data - **Residential pricing:** Full markup — homeowners building decks in April-June are NOT shopping around - **Suggested margin target:** 35-40% gross on treated/decking (vs. 31% store average) - **Bundle strategy:** "Deck Package" — materials + fasteners + stain at a bundled price (higher perceived value, higher actual margin) - **Timing:** Treated lumber is hardest to source in May-June. Buy inventory NOW at current prices, sell at peak demand pricing. ### 🎨 Category 3: Benjamin Moore Paint **Target: Maintain premium positioning, upsell** - Spring is prime exterior paint season - **Co-op funded displays** — use Benjamin Moore marketing dollars aggressively through June - **Bundle:** "Spring Refresh Package" — 5 gallons exterior + primer + supplies at a package price - **Upsell Aura/Regal Select** over ben line — higher margin per gallon - LBI beach homes need exterior paint annually (salt air) — this is a captive market ### 🪟 Category 4: Specialty & Custom Orders **Target: Capture the renovation boom** - Windows, doors, trim, custom millwork — high-margin items - **Spring renovation surge** is starting NOW - Lead times are a selling point: "Order now, get it before Memorial Day" - **California Closets partnership** could add 10-15% to custom order revenue (per Mar 29 analysis) --- ## Tactical Pricing Actions for April ### Immediate (This Week) 1. **Review Epicor pricing tiers** — ensure residential walk-in price level reflects spring premiums 2. **Treated lumber inventory check** — buy ahead at current prices for May-June demand 3. **Decking display at Surf City** — high-traffic, seasonal, vacation home owners 4. **Benjamin Moore spring promo launch** — co-op funded signage at both locations ### April-May 5. **"Deck Season" promotion** — package pricing (materials + hardware + stain) 6. **Neal/Denise contractor visits** — lock in spring project commitments NOW 7. **Delivery fee structure** — residential delivery at premium (contractors negotiate free delivery on volume) 8. **Credit card surcharge** — Amanda's Epicor module should be live. This alone adds 2-3% to every residential transaction ### June-August (Peak Season) 9. **No discounting** during peak — the market prices for you 10. **Focus on availability** — being in stock when competitors aren't = pricing power 11. **Marine/boat supplies** (if 539 store concept moves forward) — seasonal upcharge territory --- ## Price-Cost Spread Analysis ### Current State (Estimated) - **Wholesale lumber cost:** ~$580-600/MBF - **Contractor pricing:** ~$750-800/MBF (25-33% margin) - **Residential pricing:** ~$800-850/MBF (33-42% margin) - **Gap between contractor and residential:** $50-100/MBF ### Recommended Spring Adjustment - **Contractor:** Hold at current levels — don't lose accounts to competition - **Residential walk-in:** Push to $850-900/MBF (35-45% margin on framing) - **Treated/decking:** Push residential to 40%+ margin - **Paint:** Maintain Benjamin Moore MSRP (good margins built in), upsell premium lines ### Projected Margin Impact If residential sales represent ~30% of total revenue during spring/summer: - Moving residential margin from 31% to 36% on that segment = **~1.5% overall margin improvement** - On $16.5M annual revenue, that's **~$250K additional gross profit** during the spring/summer window - At $8-9M spring/summer revenue (assuming seasonal skew), the impact is even more concentrated --- ## Competitive Intelligence: What to Watch ### Direct Competitors (LBI/Tuckerton Area) - **Home Depot / Lowe's:** Fixed national pricing, slow to adjust. TLC's advantage: speed, service, local delivery - **Mainland lumber yards:** Watch their spring circulars and online pricing - **Island lumber competitors:** Limited — Surf City location has geographic advantage ### Monitoring Actions - [ ] Weekly spot-check of Home Depot treated lumber pricing online - [ ] Monthly call to suppliers for wholesale trend updates - [ ] Track Epicor margin reports by category weekly during April-August --- ## Epicor Configuration Notes ### Price Level Setup for Seasonal Strategy 1. **Price Level A:** Contractor accounts (house accounts, terms customers) 2. **Price Level B:** Residential walk-in (cash/credit card, no terms) 3. **Price Level C:** Spring/summer seasonal (applied to Price Level B items April-August) ### Key Reports to Run - **Margin by department** — weekly during spring season - **Sales by customer type** — contractor vs. residential split - **Inventory aging** — especially treated lumber (buy ahead, sell at peak) - **Credit card surcharge revenue** — track the 2-3% pickup once Amanda's module goes live --- ## Risk Factors 1. **Over-pricing residential:** Could drive walk-ins to Home Depot. Mitigation: Stay within 10% of box store pricing on commodity items, differentiate on service/advice 2. **Treated lumber inventory risk:** If you buy ahead and demand disappoints, carrying costs hurt. Mitigation: Buy in moderate quantities, not full season load 3. **Contractor account friction:** If Neal/Denise's accounts see residential prices and ask questions. Mitigation: Clear price level separation in Epicor — contractors should never see residential pricing 4. **Tariff changes:** 45% Canadian lumber duties could shift (Supreme Court involvement). Monitor. --- ## Rob's Bottom Line 🦞 The spring pricing window is the most important 5 months of the year for TLC margins. Contractors are your volume base — protect those relationships and prices. But residential walk-ins building decks, painting beach houses, and renovating kitchens? They're paying for convenience, proximity, and expertise. Price accordingly. The credit card surcharge module alone — if Amanda gets it live — adds 2-3% pure margin to every residential transaction. That's $150-250K on the residential segment. **Action for Paul/Joe Young:** Review Epicor pricing levels THIS WEEK. Set residential seasonal pricing before the May rush hits. *Make good decisions.* 🦞