Starting as early as next month, consumers looking to build their own homes may need look no further than their own computers or local warehouse shopping club to connect with contractors and set up a payment schedule for the project.
The Home Service Store, a Vermont-based company with offices nationwide, is preparing to launch its services in the Boston area as early as March. But while HSS brings with it promises of a one-stop shopping solution for home repair and building needs, some local builders are wary of the new service.
According to a company press release, HSS matches the needs of customers that contact them with a pre-qualified network of local trade affiliates for jobs ranging from a leaky faucet to constructing a new home. The affiliate contacts the customer directly and provides an estimate for the project. Once a contract has been signed, work begins. When the job is completed, HSS follows up to ensure that the work has been completed to the customer’s satisfaction. The customer pays HSS directly for the work.
“The response has been very good,” said Dick Courcelle, marketing manager of the Rutland, Vt.-based HSS, about his company’s performance in other areas of the country. “We wouldn’t be doing this if the response hadn’t been good.”
HSS opened its first stores last year in Dallas, Pittsburgh, New Orleans, Atlanta and Minneapolis. Currently there are stores in 30 metropolitan markets nationwide, and the company expects to have 60 opened by the middle of this year.
Courcelle said he expects HSS to enter the Boston market in late March or early April. The local HSS office will be based in Waltham, but information kiosks advertising the company will also sprout up in Sam’s Club stores in Massachusetts through a partnership with the warehouse club. Customers can also log on to the company Web site, www.thehomeservicestore.com.
“We’re expanding with Sam’s Clubs throughout the country,” Courcelle said.
For the customer, Courcelle said HSS offers a member protection plan in case there is a problem with the project ordered. The contractor affiliate, he continued, is able to take advantage of offerings such as liability insurance, financial planning and legal services through HSS.
The Home Service Store generates its revenues through annual membership fees of $48 for customers and $300 for contractors. HSS also keeps a percentage of the total project cost. Courcelle declined to comment on what percentage the company keeps.
“We can generate 30 percent of a contractor’s business; that means less money spent on advertising for them,” he said. “We also offer credit card processing, which many contractors don’t do, but many property owners choose that option.
“It’s difficult being an independent contractor,” he continued. “We view this as an opportunity for them not to have to do as much lead generating as they would without the service.”
Courcelle further stated that HSS uses local contractors, keeping the consumer’s money invested in the area.
The exact launch date for the Boston market has not been set because HSS is still working on lining up the necessary contractor affiliates. “It takes time to get established,” Courcelle said. He could not provide figures as to how many area contractors had already signed up as HSS affiliates. “We don’t want to open until we have a full staff and a network of trade affiliates.”
Once it is ready to go, HSS plans on launching an advertising campaign with direct mail and other promotions through various media to get the word out about the store. “We’re ramping up,” Courcelle said. “We’ll be using several different marketing channels.”
Skepticism
The recruitment of contractors is most likely going to be the most difficult part of establishing the Home Service Store, area builders said.
“[HSS] sounds like it has a great appeal, but contractors are so busy these days they can’t see straight,” said M. Shepard Spear, senior vice president of the Home Builders Association of Massachusetts. “How are these people going to provide these services? Where are they going to get qualified people to do this? Everyone’s at work already.”
Spear added that he was not specifically familiar with the Home Service Store, but had experience with similar businesses in years past.
The departure from the traditional way of working with contractors to an essentially retail environment raised some concern for Thomas Zahoruiko, vice president of construction lending at Enterprise Bank in Lowell and a former builder.
“The overriding issue is that construction is a very hands-on environment,” he said. “Most contractors will commit to work based on who the customer is. A lot of them are not receptive to a forced portfolio of work.”
Zahoruiko echoed Spear’s concerns about finding an adequate supply of affiliates. “Most good contractors have enough work,” he said.
“This might appeal to someone who’s young and just out of technical school as a good way to get experience,” Spear said, “or maybe for someone who thinks it’s time to go out on their own.”
Courcelle said all network affiliates must be qualified, insured, and properly licensed. They also have to go through a screening process.
Zahoruiko said in order for a business model like HSS to succeed, the relationship between the contractor and consumer is crucial. “I don’t know how it can be done without that link,” he said. “I think customers will be a little bit hesitant to accept a contractor they’ve never seen.
“Hiring a contractor is not a commodity than be selected off a shelf,” he continued. “It’s hard to systematize something where every transaction is totally unique.”