Dakota Premium Hardwoods Defies the Odds and Finds Success

Dakota Premium Hardwoods (Dakota) was founded in 2008 by Owner and CEO Price Brashear. “You would think during a downturn would be a terrible time to start a new business. But the truth is it was actually a pretty good time. When you're starting a company new during a downturn you can control your growth in such a way that you can be profitable during those times,” said Ron Mazzarella, chief operating officer for Dakota Premium Hardwoods, on the company's origins.

Dakota originally specialized in hardwood lumber, but has since expanded into full line woodworking products distributor. Dakota's product offering now includes a heavy emphasis on cabinet hardware, laminate, moulding, and more. That expansion into new products and industries has also been a big driver of the company's growth over the years. Dakota now boasts branches in Waco, Austin, Houston, Dallas, San Antonio, and El Paso, Texas. They have more than 80 employees throughout Texas, and there are plans to open a branch in Louisiana.

This expansion and growth has been no accident according to Mazzarella. “It was actually a part of the vision of the owner from the beginning in getting into distribution. His background was more in wholesale lumber and truck load business. When he got into distribution it was his intention from the outset to be a one stop shop for a variety of diversified products to the cabinet industry,” says Mazzarella.

Dakota has grown quickly to six branches in nine years. The company has diversified its product mix to keep up. “Five years ago we were more than 50 percent hardwood lumber, and now we sell more hardwood lumber than ever. But the percentage of our mix that is hardwood lumber is less than 25 percent now,” says Mazzarella. That expansion has also led Dakota to produce over 40,000 SKUs for the marketplace. Mazarella notes that the key to the company's strategy is to offer the whole package for all customer needs on a single IPO.

With the recession in the rearview Mazzarella says the state of the industry is positive. “We're in Texas and things are very good here. There are some big markets here in Texas that are hot and doing well,” says Mazzarella. “We're in the middle of a record month here in July, and the old record was set in May. Sales are booming. So we feel very good about the industry.” However, with success in business there are always challenges.

While times were tough in 2008, Dakota hit the ground running and hasn't slowed down. Mazzarella notes that companies that expanded before the recession likely had a harder time due to their costs and size. In contrast, Dakota was just establishing their overhead structure. “We were in a better position to control overhead as a startup because we could be profitable with less business because we hadn't built up a large infrastructure yet,” says Mazzarella. He also says the next downturn will likely prove more challenging because of our recent growth and investments in infrastructure.

However, there are current challenges Dakota must overcome. According to Mazzarella, smaller issues like finding lumber and servicing customers are largely under control. But there are difficulties within the industry that may require diligence. “As far as our industry there's a reluctance to operate outside of traditional methods to better respond to customer needs. End users today are hungry for new and better products, and distributors have to keep up with that.

We need to come up with better ways to educate our employees to present, market, and deliver new products,” says Mazzarella. “It's one thing to make new and innovative products available on the shelf. The challenge lies in creating an effective linkage from the manufacturer to the distributor to the fabricator, and ultimately, to the end users. Distributors that can master that linkage are the ones that are going to prosper.”

Adapting to and staying informed about changing industry trends is something all distributors must achieve. For Dakota, adapting and expanding its offerings has also been a key part of the company's success. Mazarella says new business opportunities are emerging as people become more open to some new products with European designs.

“Traditionally markets here in Texas have been characterized by face frame cabinetry. But we're seeing trends towards more openness to higher-end innovative products,” adds Mazarella. These new products include frameless cabinetry and European influenced styles gaining a foothold in Texas.

Mazarella also cites the North American Building Material Distribution Association (NBMDA) as a major reason why Dakota has been able to experience such success over a short period of time. “We view NBMDA as the most helpful of all the trade organizations we participate in. The annual convention has been a good tool for us to meet with current and future vendors,” Mazarella said.

With nearly 10 years under their belt, Mazarella is predicting a bright future for Dakota. But diligence is necessary as economic forces can quickly change business plans. “Our industry is certainly very tied to what happens in the economy, but we've tried to diversify ourselves. We certainly have to be aware and on guard on what happens in the economy,” he says. “However, we feel we have positioned ourselves to where we can continue to grow and adapt if the economy changes.”