I am in the process of writing a white paper on the SIP industry and the central theme of the paper is wrapped around the question, "Why are we but a dismal 2% of the industry?" I want you to first consider the following points: 1. We are better 2. We are greener 3. If we are fair with our clients, we are no more expensive Please no MgO better than OSB, better than Steel backbiting that seems to get out of control on this site sometimes. For those of you who want to offer some counsel on this matter I would really appreciate your time and attention. I have only been at this for 5 years so I am a relative novice when compared to some of you and I do not want to share my thoughts, yet. I would like to read your thoughts and then compare them to my research. Hint, two books have been instrumental in my deciding to do this project; "The Tipping Point" and "Blink". Both by Malcolm Gladwell and both could have been written solely about the SIP business. Thanks, as always for your time and consideration. Greg

You could call your paper the "The Sipping Point".

Just my two cents, but I think that the biggest barrier is the shift in the economics of home building that SIPs engender. I'm sure you guys will feel free to correct me if I'm wrong, but most builders have their crew of framers who build the shell, and sub out the electrical, plumbing, painting, foundation, and many of the other tasks. So, while the builder applies a minimal markup on all of the subs, the majority of the builder's income is in the markup on materials and labor for erecting and closing in the shell.

SIPs effectively relegate even the shell construction to subcontractors. So, the majority of the builder's economic benefit ends up going to the SIPs manufacturers, and in some cases even the erection of the SIPs shell is sub'ed out. So, economically the only way that SIPs construction is financially advantageous to the builder is if the builder can increase the volume of business to overcome the narrower margins.

Unless builders have a clear economic advantage, they are probably always going to balk at the economic benefit shift, but also will be unwilling to invest the time to master the learning curve inherent with SIPs.

Most builders do not care about providing a better product to the customer, what they care about is their bottom line. If they can make 2 cents extra selling a pig with lipstick, then thats what they do. SIPs remain a consumer driven business, by the intelligent consumer that takes the time to find a stronger, greener more energy efficient product

Absolutely. For SIPs to really take off, I think that SIPs manufacturers will need to treat builders as retailers, and replace the lost income with a markup that is cost-effective for the buyer. Short of that, the only driving force for market saturation is highly motivated buyers who usually lack the requisite knowledge, and impetus for forcing a SIPs decision. They will be told that stick built is just as good, and cheaper. You need the builders to be selling SIPs, otherwise they will sell what they can make money on.

In my area, almost everything is sub contracted. About the only crew that the builder has is one clean up man. Even then, the final clean up is usually done by a sub contractor that specializes in hauling away the debris at the end of the job. I agree that SIPS remain a consumer driven business. I think consumer education is the best way to increase the market share. In my opinion, there are not enough SIP companies displaying their product at home shows. If a potential homeowner does not see SIPS at a local home show, then there is not much of a chance for one on one discussions about the merits of SIPS. In other words, the homeowner is at the mercy of the builder who has other goals.

What about bypassing the contractor?

What about going straight to the buyer/home owner?

In your areas do you think people are saavy enough to come into a retail outlet to design and buy a home?

Do you think the over abundance of spec homes on the market keep people from looking at a home they have to wait to get built?

What if we use micro-plants to supply to overcome the freight but use a one company buying to benefit from economies of scale?

Thanks, again,
Greg

Greg; Most construction financing will not allow the owner to be their own contractor , so unless its a cash deal or unless the contractor agrees to be cut out of the deal, it is not likely to happen In our area spec homes are not the problem, the market is flooded with undervalued foreclosures and short sales. While real estate values continue to decline, material prices continue to climb. This makes it impossible for new construction to compete

Greg; just got a call from the local Home Depot, they were picking my brain about SIPs and the manager at the pro-desk is coming out to see a 7,000 sq. ft. home we are just starting in Odessa, FL. If the Homer starts to take an interest in SIPs construction nationwide it could be the "tipping point"

When I consider my experiences trying to buy a window package, or any other product that needs to be special ordered from the Home Depot, it's hard to imagine how they (Homer) will be able to help the SIP industry.

ICF Hybrid; I agree that when it comes to Home Depot employees product knowledge, it is from 1 to 10, with 10 being genius and 1 being ignorant, they are about a 2 at best. However being the retail monster that they are, their interest to promote the product would go a long way to mainstream SIPs

Maybe, but you always need to weigh the benefit of the exposure versus the damage that can be done by the inevitable improper usage of the product. And, it's just not enough to get consumer exposure, even assuming it is all positive. Let's face it, the great majority of homes are built by contractors. If they aren't convinced, things can't move forward.

When I went shopping for an ICF contractor, I sat down, in turn, with a half dozen contractors, all of whom knew the plans were drawn for ICF. Every single one tried to turn me to conventional construction, which they were more comfortable with.

If that happens with SIPS, you can make all sorts of inroads with consumers, only to find yourself defeated by the contractors.

ICFHYBRID,

After designing a SIP home for a client, his favortite builder convinced him to stick build.  The builder told my client that it would take too long to build with SIPS.  Of course, the builder had never built with SIPS.

Of course, the builder had never built with SIPS.

Exactly.
Five out of the six I sat down with hadn't built with ICF, either, although they had "seen" it and initially voiced their willingness to go with it. The sixth had done two ICF jobs and, it turns out, had troubles with both.

So, here you have a determined client, with a set of plans by architect and engineer for ICF and the contractors are still trying to switch them over to conventional. Would have done it, too, if I hadn't been so "committed". That is the uphill battle that has to be faced in the market for both SIPS and ICF.

The Home Depot stores here in California have these reciprocal arrangements with contractors where Home Depot promote services offered by local contractors, and get something like a finder's fee for the referral. They do that with HVAC contractors all the way through paver stone installers. If they are interested in SIPs, then it may be for a similar arrangement.

Dick; its done a little different in Florida, If Home Depot is going to sell: installed HVAC systems, Plumbing, roofing and contactor services. They have to have a licensed contractor qualify Home Depot in those respective areas.

Greg; don't know if you have read this study? http://www.pathnet.org/si.asp?id=1686

Sorry if I come late to this discussion.
In reading the previous posts, one main theme comes to mind.
Are SIPS going to be thought of as a 'commodity' or a 'system'?
To gain any type of marketing relationship with mainstream construction retailers, SIPS must be looked at as a commodity, the same as 2x's or plywood. That is really the only way the retailers can see any advantage to their association with these products. ie: if they can buy cheap enough, mark them up enough, and sell enough product to recoup their overhead and still make their projected net profit. That is their only concern. Ever notice how your favorite product will be instock and selling like crazy one week, and gone from the shelves the next week. Why? Because the product did not sell well enough CHAINWIDE to justify the shelfspace.
Add to this disadvantage, the fact that SIPS really are not a one to one replacement for any other product available now, but a 'system' that requires more time and expertise to sell, and you have negatives that I don't think will ever be overcome for mainstream marketing through 'lumberyard' dealers.

I suspect that until one company develops and funds an agressive national marketing program, to develop the 'name recognition' that the average home buyer will know when he goes shopping ala 'Lincoln Log' or 'Pella', will we see SIPS move forward, as we would like.

What if I propose to you that SIPs solve no problem? Can you define a problem that we solve? I would submit to you, that the average home builder sees nothing wrong with a stick built home and that the contractor is simply providing the absolute least, which is what the consumer finds acceptable.

Am I wrong? Is there a problem we are solving? We are greener, but do people really care? We are more efficient by way of constucting a home, but does the consumer really care how long it takes to build a home? What if no one ever sees your product? How do you get folks to say to their contractors, I want that instead of what you are currently using?

Thanks to those of you who have provided your thoughts. I am looking forward to your thoughts on these issues.

Greg; 95% of conventional builders looks at SIPs as the problem. They have no interest in getting involved in a new system where they may make some mistakes or forget somthing during the learning curve. Mistakes = $$$$ ........... If a customer tells a conventional builder he wants SIP, that builder will try everthing to talk them out of it. Problems that SIPs have solved for us: 1. in the last 10 years we have gone thru 2 hurricane code changes, our SIPs have not had to make any changes, while conventional has added many things to meet the new codes. @. We have also had energy code changes, with SIPs it is a lot easier to meet the new codes, it is geting harder and harder to get block and 2x4 contrction to be energy efficient. 3. As a builder I choose to build with SIPs not just because I know what a better building system they are, but because it set us apart from the tens of thousand of builders still building the "same old- same old". Educated consumers looking for a stronger, greener more energy efficient system seek us out! No hard sell needed. In the Tampa Bay area I am only in competion with a few builders as opposed to thousands. In these tough economic times, we are still staying busy. We DO NOT build anything except SIPs.