Chairman of the Boards

Specialty lumber is his specialty

by Will Lindner

vt_wholesale0517In 1996, Phil Payne cashed in his 401(k) and took out a loan to found his Williston specialty lumber company, Vermont Wholesale Building Products.

There’s wooden architecture all over Vermont, and it has stood the test of time. These structures, some of them grand and some quite humble, are iconic features upon Vermont’s revered rural landscape.

“Wood lasts a long time,” observes Phil Payne, the owner and president of Vermont Wholesale Building Products Inc. in Williston. “You see barns made of eastern pine and hemlock still standing after a hundred years or more.”

Today there are alternatives: low-maintenance synthetic siding and decking materials, and composites made from plastic and wood fibers. For Payne, these products don’t cut it.

“I’m a lumber guy,” he says. “I look at those and I just enjoy the wood deck a lot more.”

Besides, he contends, the sophisticated finishes, sealants, and colorings available today vastly reduce the maintenance required with wood.

Payne’s self-definition as “a lumber guy” is short of the mark, however. Vermont Wholesale Building Products deals in specialty lumber. Open-sided storage sheds spread out over six acres behind the modest house that serves as the company’s office building on Williston Road. The sheds are filled with Douglas fir, western red cedar, eastern white pine, southern yellow pine, and spruce, shipped by suppliers in Oregon, Idaho, Canada, and elsewhere. The eastern white pine is local, much of it from the Northeast. Ipe, a Brazilian hardwood, is also kept on hand, as are Malaysian meranti and red balau.

Pallets of red cedar shakes and shingles capped with protective coverings line the gravel corridors busy with forklift traffic. Payne’s half-dozen lumberyard workers receive, inspect, and stockpile new product, and assemble orders that are shipped out across Vermont, New Hampshire, Massachusetts, and New York daily in the company’s five tracter-trucks. Adding to the hubbub is the construction of a massive new storage structure, with a nearly 12,000-square-foot footprint, that looms over the little office building in front of it.

The specialty lumber that Payne’s company provides is used in so-called “high-end” applications. Among these, he says, are the artistically designed buildings at the Vermont National Country Club in South Burlington and the Shelburne Museum’s new Pizzagalli Center for Art and Education.

The second-home market in Vermont’s resort-centered communities also creates demand for the elegant cedar shakes, the fine tropical hardwoods used for decking and outdoor projects, and the massive structural beams honed from Douglas fir that flow in and out of the company’s Williston lumberyard.

“The reason for that,” the owner explains, “is that everything we have here is expensive.”

But Payne emphasizes very clearly who his customer is, and who it isn’t. It is not, for example, the architect designing these high-end buildings, although Payne and his team can procure not only the spruce, fir, or ipe the architect might specify but also the specialty-milled dimensions required. Nor is it the general contractor laying in supplies as the project gets underway. Payne’s customer is the retail lumberyard doing business with that contractor.

A sign on Vermont Wholesale Building Products’ front door discourages anyone hoping to short-circuit that supply chain. It reads:

No Retail Sales.

Support Your Local Independent Lumber Dealer

One such retailer is the Rice Lumber Co. in Shelburne. The relationship between Payne and Rice’s president, Jim Carroll, dates back nearly 30 years to when Payne was employed by a Boston-based company that had gotten its start building sailing ships a century earlier and thus had well-established sources for specialty woods and a longstanding reputation.

Payne, as a contracted employee working out of his home, helped that company create a distribution site in Vermont. When he went out on his own (he incorporated Vermont Wholesale Building Products in December of 1995 and opened in ’96), Carroll turned to him for a substantial portion of his specialty needs.

“It’s a Vermont business doing business with a Vermont business,” Carroll explains. “That’s important to us, and hopefully important to our customers. He’s expanded his product lines over the years, and in a way, his inventory is our inventory; that’s the niche he serves.”

Rice keeps a supply of some of these specialty products on hand. For items sold less frequently — Carroll mentions Brazilian ipe and Douglas fir beams up to 12 by 18 inches by 24 feet long — “We often lean on Phil. He’s not the only source around, but much of our business is with him.”

Payne protects relationships like these by ensuring that the distinctions between wholesaler and retailer are observed.

“Contractors will sometimes try to buy from us directly,” he says — some, perhaps innocently, failing to understand the industry’s composition, others hoping to save money by cutting out the retailer. “I’ll just make it clear to them that it doesn’t work that way.”

There’s a good reason, besides the legal ones, for Payne to safeguard his relationships in the lumber industry. If it weren’t for them, he might never have been able to launch his own business.

He’d been working for the Boston-based distributor for a few years when a wave of audacity overcame him, convincing him that he could insert himself in the midst of this supply chain of costly, often exotic, merchandise. As he relates it, he cashed in his 401(k) (“People told me, ‘You’re out of your mind!’”), took out a loan and a small line of credit, and began courting his contacts in the industry.

“Normally you have 10 days to pay for a load of lumber,” he says. “But my early backers told me, ‘When you sell it, pay me.’ I’d already been selling them products from the other company. It was all about local connections, local relationships.”

Actually, Payne’s relationships in the industry went back considerably further that the few years he had represented the Boston supplier. After graduating from Burlington High School in 1971 and working for a year in a grocery store, Payne was contacted by his older brother, who was employed by Diamond National Lumber and offered to set up an interview for him at Georgia-Pacific. Greenhorn that he was, Payne replied, “Leo, I don’t know anything about railroads!”

At the time, Georgia-Pacific, one of the world’s foremost building-products companies, had a warehouse in Burlington. After an apparently successful interview, Payne, then 19, went to work as a laborer. He became a forklift operator, and then a truck driver doing long hauls around the Northeast. Eventually he graduated to sales, visiting lumberyards and growing intimately familiar with the products used at all levels of the lumber and construction industry.

“I worked with good people, who explained a lot to me about looking at things from the customer’s standpoint and doing things the right way,” he says. “Then I went back inside again, and became a lumber buyer for Georgia-Pacific.”

This was the job he eventually left to head up the Boston company’s Vermont expansion, so by the time he struck out on his own to create Vermont Wholesale Building Products, he had more than 20 years in the lumber business and lots of exposure to the field of specialty lumber. Now that Vermont Wholesale is in its 21st year, Payne has a track history nearing 45 years.

“We’ve had tremendous growth,” says Payne, “so people sometimes say, ‘Don’t you wish you had done this 20 years earlier?’ And I say, ‘No, I wasn’t smart enough.’”

This is the kind of story that Bruce Bernier, senior lender at Merchants Bank’s South Burlington office, loves, and feels is emblematic of Vermont.

“You drive by some old, nondescript building a hundred times,” says Bernier, who now provides a range of banking services for Payne’s company, “then one day you happen to stop in and here’s a handful of people working away and there’s Phil back in his corner office. Phil had it in his mind that he was going to build his own business; he took that leap, learned from his mistakes, and built the company. He cares about what he does and he provides good jobs. People like this are all over Vermont!”

Payne was born in Rutland in 1953. When he was 7, the family moved to Burlington, where his father had taken a new job. Payne and his wife, Diane, a Milton native, were married in 1981. She has a background as a legal secretary, and in the early years after Vermont Wholesale Building Products was established, she managed the company’s books. They have two grown children, Travis and Annie.

The Paynes now live in a beautiful waterfront home in Malletts Bay, where several species of his specialty wood can be found: Western red cedar, Douglas fir, ipe, dark red meranti, eastern white pine, and cherry, plus 100-year-old oak that was repurposed as flooring.

The business relationships Payne values so highly extend also to his “team” — the 12 to 13 employees who serve in sometimes-overlapping roles in the office and lumberyard. Payne opts for an egalitarian corporate model. “Overlapping roles” can occasionally refer to cleaning the toilet or the refrigerator.

The Paynes enjoy the recreation afforded by living on the lake, and golf is one of his diversions, but the office attracts him at least as much as the links.

“People call me hard-working,” he says, “but I don’t consider it that way because I enjoy it so much.”

Some might say it’s a lucky man who so fully loves his work. In this case, it’s clear that Phil Payne has earned his luck.•