In the supply chain landscape that’s increasingly shaped by consolidation, logistics challenges and evolving customer expectations, master distributors continue to play a critical — and often behind-the-scenes — role in the PHCP industry. By bridging the gap between manufacturers and wholesalers, these companies provide deep inventory, fast delivery and access to a wide range of products that distributors might not otherwise be able to or want to stock. 

To better understand the value proposition, challenges and future outlook of master distribution, we spoke with three leading master distributors who shared their insights on where the model fits today and how it’s evolving to meet tomorrow’s demands. 

With so much uncertainty taking place, master distributors are ready and able to help distributors fill their orders, and allow distributors to avoid deep stock investments during turbulent times. 

We reached out to the following individuals to get their perspective: Dan Sherman, partner, Master Source, an HVACR master distributor located in Seattle; Andrew Rich of the Wal-Rich Corp., a family-owned and -operated plumbing, heating, hardware and industrial specialties distributor located in Port Washington, New York; and Cole Conner, vice president of sales and marketing, The Distribution Point (TDP), master distributor specializing in plumbing products based out of Moody, Alabama.

The Wholesaler: As there is often a misconception with the definition of a master distributor, please describe your company.

Cole Conner: The Distribution Point (www.thedistributionpoint.com) is an independent master distributor that prides itself on customer service, competitive pricing and fast shipping with low damage rates. We are careful only to open legitimate wholesalers and showrooms to protect the supply chain.

 Andrew Rich: Wal-Rich (www.wal-rich.com) is a crucial link in the distribution channel, allowing manufacturers at the top and wholesalers downstream to effectively manage inventory and cash flow. With more than 6500 SKUs, Wal-Rich is a primary source for most items and a secondary source for others, allowing wholesalers to choose from a range of products that are competitively priced at Free Freight Allowed (FFA) levels that are reasonable and achievable.

Dan Sherman: Our role as a master distributor (www.master-source.com) is to provide distributors with a quick and cost-efficient path for order fulfillment. We do not sell to plumbing or heating contractors, consumers or any form of walk-in business. It is a great solution for a manufacturer — we can handle small- and medium-sized orders more efficiently.

The Wholesaler: What challenges are your customers facing today that didn’t exist three years ago?

Conner: Customers are facing margin compression from price exposure and inconsistent lead times from a global supply chain that hasn’t fully recovered, paired with a consumer base that demands rapid service. We believe TDP helps wholesalers meet those demands with consistency and flexibility.

Rich: Pricing and economic uncertainty due to trade policy. 

Sherman: It seems like we all continue to have less time to do anything. So being able to use master distribution to provide quick solutions for our distributors’ customers is what we think brings value to them — saving them time and money.

The Wholesaler: With tariffs, inflation and rising freight costs, how are you managing pricing strategies to remain competitive while maintaining profitability?

 Rich: Managing pricing is about managing information. It’s about the relationship with the customer, and the speed and effectiveness of communication.

Sherman: We are in constant contact with manufacturers to manage price changes (up or down) and implement them as they come out. For most shipments, we use a flat rate, so our customers don’t need to worry about increased expense or variations there.

The Wholesaler: Have recent geopolitical factors (e.g., tariffs, supply chain shifts and global trade policies) forced you to diversify sourcing strategies? If so, what changes have you made, and how do they benefit your distributor customers?

Conner: TDP operates in transparency with our partners, both customers and factories, about the realities of the modern supply chain and its impact on performance and opportunities. We are carrying more inventory in all locations to better stabilize the assortment for customers.

Rich: We have not changed sources for any products. We have been loyal to our sources as they have been effective partners for the 75-year life of our company. Our vendor relationships are just as important as our customer relationships.

The Wholesaler: As automation and artificial intelligence (AI) become more prevalent in inventory management and logistics, how is your company leveraging these technologies to improve efficiency and better serve your customers? 

Conner: While we take advantage of some AI technology, we value building relationships with customers and connecting to understand their needs, so we do not plan to allow AI into our customer service dialogue. 

Rich: We recently invested in electronic data interchange (EDI) for customers who prefer it.

Sherman: We are at the early stages here. Todd Sisson, our e-commerce manager, has been helping to spearhead web applications. We have a quotation app we have been using for about a year, and it seems to be very efficient. This has helped us to see the efficiencies available through AI. We are now reviewing an inventory application that should enhance our P21 enterprise software.

The Wholesaler: Independent distributors often struggle with balancing inventory costs and availability. How do you help them manage inventory efficiently while mitigating risks tied to fluctuating demand and extended lead times? 

Conner: Our extensive inventory and transparent cost structure allow customers to use TDP as an extension of their own wholesaling business. The turbulence of the past few years has allowed us to move from emergency fulfillment to becoming a strategic partner with wholesalers nationwide. 

Rich: This goes to the heart of the master distribution model: offering a diverse, attractive product selection at competitive prices and a reasonable FFA.

Sherman: Building out stock orders to cover the immediate need for a handful of items is not likely worth the hard and soft costs, nor is it time-efficient for their customers. It seems like in most cases, lead time is the No. 1 factor. We process small and medium orders faster than the manufacturer — usually same day — so lead time issues are mostly relieved. 

The Wholesaler: E-commerce platforms and digital transformation are reshaping distribution. What digital tools or innovations are you implementing to improve the ordering process, enhance supply chain visibility or provide better customer service? 

Conner: We have a robust platform for our wholesalers and showrooms to use for inventory, pricing and freight cost visibility. We also offer EDI and application programming interface connections for streamlined communication and ordering to allow for the most efficient flow of information. 

Rich: We are constantly enriching our online content. We also actively reach out to our customers to share our data and imagery for their online presence. 

Sherman: All orders are processed via our e-commerce site, which has all the resources we could think of — specs, images, quotation requests, freight, order confirmation, etc. We put the effort in up front to make it easy for our customers to use. We carry a significant inventory and can process most orders in less than an hour — meaning on the loading dock and ready to ship.

The Wholesaler: What do you see as the biggest concern wholesalers have with using the services of a master distributor, and how would you respond to the hesitation? 

Conner: Freight costs and the perception of not buying direct seem to be equal hurdles, so we have opened the conversation about freight programs, and we hope the spirit of serving the consumer overcomes the hesitation of buying through master distribution. 

Rich: We do not expect any hesitation. During times of economic uncertainty, the master distributor offers more value, not less. 

Sherman: They may believe that it reduces the relationship they have with the manufacturer in some way. We don’t think the manufacturer has that view — that relationship is very important to everyone, regardless of the path the product takes to the distributor’s doorstep. At the end of the day, the distributor has the manufacturer’s product in hand, so that circle is complete. Keith Kendall is our leader for new accounts/outside sales so our distributors have face to face or online service for most anything they might need.