Like many wholesalers, Slakey Bros. was started by two brothers who had $5,000 in capital and wives who were willing to pitch in during those lean early years. Roger and Bill Slakey had previously worked for Dallman Supply and Oakland Sheet Metal, respectively. Upon starting Slakey Bros., they alternated working as outside salesmen and inside managers each week. Their wives took turns as secretary and bookkeeper of the fledging firm.
The company steadily grew and over time, the Slakeys’ children took over the business. Slowly, other members of the management began holding stock in the company. Around 1990, Slakey Bros. became an ESOP and now its employees own all the shares in the company.
Frank Nisonger, who has spent his entire career at Slakey, has served as its president, CEO and chairman since 1996. Nisonger graduated from Cal State-Chico in 1974 and went to work as a trainee at Slakey Bros. Soon after, he moved to Modesto where he first worked in the warehouse and later in inside sales, then was assigned to outside sales in South Lake Tahoe and a branch manager in Fairfield, Calif., before moving to the corporate headquarters in Sacramento in 1986. Over the next 10 years — before taking on his current responsibilities — Nisonger held roles in marketing, branch supervision and sales.
He is particularly proud of the longevity and loyalty of the Slakey team, noting that more than half of the 300 employees have been with the company at least 10 years, and many are celebrating 20, 30 and even 40 years of service.
“It’s a good environment here, and that shows through our employees,” Nisonger said. “We treat our people right, pay fairly and offer good benefits. People appreciate that and they, in turn, are very conscientious and dedicated to serving our customers.”
Unfortunately, Slakey’s market area of Northern California, western Nevada and southern Oregon was hit extremely hard by the recession, and between 2007-2010 the company — which had steadily grown throughout its years in business — faced dramatic decline in sales, which necessitated significant expense reductions, including pay cuts and furloughs for everyone. During that period, Company sales and employees shrunk in half. “It was very tough to make some of those decisions, but it was the right thing to do for the overall health and future of the company,” Nisonger said. “Things are really starting to come back in our area, and we’re growing again. That is a great feeling and we look forward to regaining what we lost over the next few years. I anticipate 10% minimum growth the next couple of years. Last year, we grew about 20%, which was phenomenal. I’m looking forward to strong, solid growth.”
It’s all about the customers
Customer service is at the heart of Slakey Bros.’ business. They are dedicated to providing the best total value and service to their customers — by supplying them what they need, when and where they need it. And with a team of such veteran employees, Slakey Bros. is able to share an enormous amount of expertise, knowledge, and technical training and troubleshooting with customers.
Slakey Bros. is a full-service distributor of plumbing and HVAC products for residential new construction, remodel and replacement, as well as commercial design-build and replacement. Currently, Slakey Bros. sales are about 62% HVAC and 38% plumbing, and they predominantly are involved in the residential side of the business, along with some light commercial. About 7% of their total business is done through their showrooms.
“I’m confident that the percentage of sales on the plumbing side will start rising faster because of the new construction growth we’re starting to see in this market,” Nisonger said. “
They operate 24 wholesale branches and three stand-alone showrooms. As Nisonger describes, “We have a branch in every major city in our market geography.”
A member of the Embassy Group Ltd. since 1991, Nisonger stressed that their solid rebate programs have been a major benefit in keeping Slakey Bros. competitive in a tough market. He also complimented the networking and relationship-building opportunities the group has afforded him.
“I’ve gained a lot of ideas and knowledge from relationships I’ve formed with other wholesaler in the group, and that has been a tremendous value,” he said. “The Spring Meeting provides an opportunity to get together with every manufacturer in a short period of time — and often I’m able to meet with their top executives who typically we don’t get to see at our office. It’s a good opportunity for all parties. Buying groups like Embassy allow independent wholesalers to buy at or near the pricing/rebate level that a large national company is already getting. It truly levels the field and allows us to compete.”
Their corporate headquarters in Sacramento houses senior management, purchasing, credit, IT, human resources, accounting and marketing. There is also a large training room that can accommodate roughly 40 customers.
They also operate a 225,000-square-foot distribution center and will call area. Most of Slakey Bros. purchasing is done at a corporate level, and product is shipped from the DC to the branches daily on numerous truck runs.
“I would say that one of the things that really sets us apart is our logistics process,” Nisonger said. “When we built the distribution center to replenish branches daily, it gave us ability to provide timely inventory service to our customers. If our branches don’t have a product a customer needs, they know they can get it the next day from our DC. It helps us grow from our service capability.”
Nisonger is proud of how efficiently the warehouse operates.
“We have a very modern warehouse with high cube racking and narrow aisles,” he said. “We have an in-floor wire guidance system that the forklifts run on which makes it so much easier for the drivers; they literally don’t have to steer and can concentrate their efforts on picking items.”
Another interesting aspect of the warehouse is the carousel that contains small items. It actually rotates, bringing the product to a warehouse worker who is stationery in one spot so he can easily pick product from the bin, making the process much more efficient.
One of the efficiency strategies Slakey Bros. has rolled out to help customers is its E-Sales program. Contractors can log in through our website, check inventory, see their pricing and place orders at their convenience 24/7. “Many of our larger customers are doing a lot of their purchasing online with us. We also offer an online catalog, and software that helps our HVAC dealers with issues such as load calculation and sales.
But really, Nisonger emphasized, this is still a relationship business, and so Slakey Bros. has built a huge following among customers for its annual incentive trips. They actually refer to it as “Club Slakey.”
“It’s became a very tight-knit group because many of the same customers go year after year and get to know one another,” Nisonger described. “It’s a lot of fun. We also take along a number o four management and salespeople. In the good old days, we would take 300 to 400 on any given trip; today that number is down to around 200. But I think that as the market continues to improve, we’ll see that increase again.”
The trips — which are for a week — have taken Slakey Bros. and its customers to wonderfully exotic locations around the globe including South Africa, Tahiti, Monaco, Hawaii and several cruises for which they’ve chartered the entire ship.
“It really helps drive business because customers earn points based on their purchases and gain bonus points from select vendors who are sponsoring the trip,” he said.
Slakey Bros. also hosts a large dealer meeting annually for their HVAC customers. More than 400 attended this year’s event in Napa.
And of course at the branch level, there are plenty of BBQ and counter days to draw customers.
I asked Nisonger what he believed would be Slakey Bros.’ biggest challenges and opportunities in the years ahead.
“I would say our biggest challenge is to increase our gross margin percentage,” he said. “Contractors are requiring smaller order quantities and we need bigger margins to support the business. There is increased expense pressure from new regulations, rising health care costs and other factors that require a greater investment.
“When it comes to opportunities, the economy is improving, houses are being built and general construction activity is picking up. There are opportunities out there to grab more market share. I also see interest building in electronic purchasing, so we’ll continue to invest in our website to make it easier for customers to do business with us.”