Family. It’s an apt description to describe the PHCPPros community, if only because many contractors and wholesalers, and also vendors, for that matter, are family-owned and have been for generations.
“So much of the time we find that distributors and our contractor partners have this in common,” said Kathryn Poehling-Seymour, president and CEO, First Supply LLC, Madison, Wis., during a panel presentation at last year’s PHCCCONNECT in Cleveland, entitled “Collaborative Connections: Strengthening Supplier-Contractor Relationships for Success.” “Our businesses are part of our family and our families are part of our businesses, and so most of us operate that way.”
Poehling-Seymour was joined by fellow distributor Scott Robertson, president, Robertson Heating Supply Co., Alliance, Ohio. Dan Callies, president, Oak Creek Plumbing Inc., Oak Creek, Wis.; and Jason Pritchard, co-founder, PriCor Technologies, Seattle, represented the contractors. Robert Grim, senior vice president, global sales, InSinkErator, Mount Pleasant, Wis., moderated the discussion.
And like any other family gathering, members may not always agree on everything what with different priorities and conflicting views on certain matters.
“We have mutual goals and both contractors and wholesalers need to make money and be profitable,” Robertson said. “But sometimes it can feel like we aren’t on the same team, and we sort of forget our mutual goals.”
Still, everyone can strive to come together and find common ground to grow the relationship.
“It took me a while as a business owner to understand how these things came together,” Pritchard admitted. “For a long time, all I thought about the wholesaler was they simply wanted me to buy stuff. But the reality is we’re all in the relationship industry, and what I didn’t realize at first is that they weren’t just wanting me to buy from them; they were trying to help us and figure how we could fit in with one another.”
Good old-fashioned communication is absolutely imperative to the process, Pritchard added.
“Wholesalers know things I don’t,” he said. “And I need to be able to pass on that knowledge to my employees. The best pricing is always important, but I’ll tell you what, you pay a little bit more for a great relationship with someone who understands you and can help you make a little bit more money in the process. Our inventory and our purchasing decisions are all more effective by working with our wholesalers. Open and honest dialogue back and forth about how we can work together is key to everything.”
Attendees at the hour-long roundtable discussion heard plenty on how wholesalers and contractors can work together and strengthen their relationships. The panelists discussed emerging trends, technologies and solutions that are all benefiting the industry.
“I think one of the biggest opportunities for us to continue to collaborate is when we understand each other’s pain points,” Poehling-Seymour explained. “One of my favorite things to do is visit a contractor’s shop and just walk around and understand what’s working and what’s not, and how we can come together to actually solve these things in a way that distributors can really add value to our contractor partners and make all of our lives easier.”
So how can contractors and wholesalers make their lives easier? Product availability is a basic place to start.
“We’re really in the inventory management business,” Robertson said. “That’s what we do. We don’t make anything and we don’t install anything. So we better be pretty good at inventory management.”
With more and more of his contractor customers stocking more and more material, particularly on large fleets of service vehicles, Robertson says his company is “trying to figure out which contractors we can help by taking our inventory management system and offering it to the contractors.”
Product availability, however, no longer simply means having the physical product on the shelf just when it’s needed. The growing demand for easy online ordering is expected to only increase.
“We already do just shy of 20% of our volume online and we expect that to continue to grow as the younger generation continues to become a bigger factor,” Robertson added. “They’re used to online ordering, and I think they prefer it. So one of our challenges is that we’ve got about 16,000 products in our system so we need to make it easy for contractors to easily find what they need online along with proper descriptions that they’ll need to make the right buying decisions.”
That digital know-how for Robertson extends to a series of self-produced how-to videos the distributor has created for contractor education. Currently, the distributor has produced about 20 videos lasting around 10 minutes each.
“How does a basic water heater work?” Robertson explained. “What are the components that installers will see when they go down into the basement? We’ve had several hundred contractors view them so far and we feel this is a really value-added service to offer them.”
Offering training is one reason First Supply recently opened the Ed Felten Training Center, a 1,445-square-foot facility inside a Madison, Wis., branch. The center, named after the company’s chairman emeritus who passed away at age 80 in 2019, features 20 plumbing and heating live-fire training stations. The new center is adjacent to the 1,924-square-foot First Supply Badger Training Room. Together, the two facilities can train nearly 100 people at a time.
And while both sites are conveniently situated alongside Madison’s well-traveled Beltway Highway, Poehling-Seymour added that the facilities are wired to offer training over the internet in order to easily reach the company’s far-flung market.
“Having the right product at the right time for the right price is the basic expectation contractors have for all wholesalers,” Poehling-Seymour said. “But when we really think about what we’re striving to do, it’s to offer a level of training that gets our contractor customers together where they can work with their hands and get them excited about our products and what they can offer for their next projects.”
Callies raised an interesting question during the discussion: “How does my supplier make me look like a rock star?” (And to be sure, Callies said the question also applies the other way around, too.)
While Callies raised some possibilities, he did talk about the personal touch that often times gets lost in the shuffle with high tech.
“I can remember when a huge value proposition was the fax machine,” Callies said. “I couldn’t believe I could order something by just sending a fax.”
But while all of today’s technologies offers big improvements in efficiency, Callies will always appreciate the option of the personal touch.
“There’s a phrase that goes ‘digital when you can and verbal when you must,’ ” Callies added. “Why would you call in the order when you can just go online? Contractors might need an answer right now and they need to speak to someone.”
For Poehling-Seymour, people can make all the difference in the world.
“It’s the people every day who wake up and show up at our facilities,” she added, “the outside salespeople, the inside salespeople, the credit team, the delivery drivers, our kitchen and bath store design teams. Those are the people who are really adding value to what is happening out in the field every day.”
Robertson agreed, and thinks the people factor will continue to hold its important spot in nurturing wholesaler-contractor relationships.
“It’s going to be as necessary in the future as it has been in the past,” he added. “We can talk about technology, but at the end of the day, it’s still heavy on trust and who you’re comfortable dealing with and who supports you with the blocking and tackling. Because most days it comes down to blocking and tackling.”
The Mathematics of Inventory
Robertson presented some sobering stats on the investment wholesalers must make to ensure product is ready to go for contractor customers.
Robertson Heating Supply Co. has 39 branches in five states and just to open one branch requires an investment of “three-quarters of a million dollars at a minimum,” he said.
“Every contractor wants inventory when they need it,” Robertson added. “And for us to have that inventory, there’s a cost.”
Plus, patience. Considering the average industry turns, Robertson said his company holds inventory for up to 125 days.
Wholesalers, such as Robertson and Poehling-Seymour, have the same mutual goals to be profitable as contractors, such as Callies and Pritchard.
As a third-generation wholesaler committed to serving his local community, Robertson understands that sometimes it’s a “dog fight out there” and price will remain king. But he’s optimistic his commitment will earn “as much loyalty as we can get in our channel with our contractors.”
“At the end of the day,” Robertson said, “we hope that this gives us an edge over another wholesaler that’s going to ship product in from 30 miles away and maybe beat our price by a couple of points. We hope that contractors keep this in mind as they make their decisions and that it’s not always about the spreadsheet and who’s lowest in column K.”