United Pipe & Steel is on a roll. Literally. After nearly 35 years of operating solely out of their headquarters location in Ipswich, Mass., this master distributor of commodity pipe and related products has opened nine operations since 2006: Apopka, Fla.; Burlington, N.C.; Corsicana, Texas; Elyria, Ohio; Franklin, Ind.; Loves Park, Ill.; Topeka, Kan.; Pinson, Ala.
And just this spring, United Pipe opened latest Distribution Center, in Rialto, Calif. — its first on the West Coast. It is a 95,000-square-foot facility with a 7-acre pipe yard that will mirror the company’s existing facilities. They will operate on their own fleet of trucks from this East LA suburb, delivering as far north as San Francisco, east to Phoenix and Nevada, and south to the Mexico border.
Noah Heller, Vice President of New Markets, was in charge of opening this location. He has quite a track record in successful openings at United Pipe, having overseen the launch of their four most recent locations. The DC will have a dedicated outside sales team while inside sales will be coordinated out of the headquarters, with extended hours to handle the West Coast time difference.
According to United Pipe President Greg Leidner, California’s demographics were what drove the company to make such a major investment. “California is the second-largest market in the U.S.,” he said. “It has a high concentration of an existing customer base, with a lot of independent wholesalers. That’s our target. We were servicing Arizona, but had not done business on the West Coast.”
During the early stages of preparation, Director of National Sales Michael Blair and other members of the team spent a significant amount of time in the Los Angeles area on what Blair described as a “recon” mission.
“Initially, I spent some time out there months in advance to identify competitors and our target customer base,” he said. “I wanted to make sure we had the right handle on the market landscape. And what additional products we might need to stock that are different from other regions. California is a unique market and we had to make some adjustments. There are differences in building codes and trucking requirements that we had to factor in.”
Blair developed a 20-page report based on his nearly two months of data collecting, which has been instrumental in coming up with just the right product mix for Vice President of Purchasing Joe Kelly to focus on. In addition to their existing partners, Kelly has brought in considerable supply sources that are unique to the California market.
“We are stocking about 900 SKUs in Rialto currently,” Kelly commented. “We had to establish a lot of new relationships for the product we were bringing in. The dynamic is mostly import when it comes to steel. We are also bringing in domestic steel from our existing mills. Currently, there isn’t a source of domestic steel in California. The Rialto DC stocks a combination of current and new sources. And we will continue to adjust that as the market demands.”
Vice President of Sales Corey Lowsky added, “The unique part of this for us and our customers is that there isn’t anyone like us in California. We can put domestic steel pipe, import steel pipe, PVC, ABS, SDR, copper, metal conduit and PVC conduit all on same truck. There is no master distributor in the area that has the products we offer. We are truly a one-stop shop for customers. It’s a tried and true master distribution method for us, one that we’ve successfully implemented in other markets.”
One of the things that gave United Pipe such confidence in investing in the new facility is the rebounding market in California. “The LA market, much like Texas, is a market unto itself,” said Blair. “We’re also seeing the same signs with the rebound in Las Vegas and a very strong Phoenix market, both of which we will serve from this new facility.”
Lowsky added, “When I go out there, I’m letting them know that I’m coming to their home field to serve them and bring our model to them. Customers are so excited to be able to one-source their products. Every wholesaler in that area relies on pick up business. We anticipate our will call business in Rialto will do more volume than all of our locations. It’s going to be in high demand for customers. One of the things we’ve learned is that contractors typically factor time for their pick ups into their day; many even pick up materials the night before so they’re prepared for the next morning. With our new DC, instead of them going to three different spots, they can go to one stop. There are roughly 200 wholesalers locations within 25 square miles of us that carry plumbing, PVF, irrigation and PVC.”
The extended size of the market area — and California’s notorious highway gridlock — presents some unique challenges to United Pipe, but Leidner is confident in their abilities.
“At our core, we are trucking and logistics experts,” he said. “This is why we exist in the supply chain. Yes, the California market is logistically challenging, but we have assembled a very experienced operations team to be able to deliver the right product to our customers on time, every time.”
Lowsky added, “What we’ve come to know is what we’re good at — we’re a logistical service model. We’re very good at moving pipe products. When we go into a wholesaler, we’re selling them on the fact that their time is money. We can supply three or four of their product types in a one-stop environment. Pipe is the hardest product for wholesalers to move around. So when we share with them our logistical service message — that we’re experts at moving pipe — it attracts their attention.”
The Rialto DC had a soft opening on April 1, and members of the sales and senior management teams from the headquarters office will be spending time on the West Coast over the next few months meeting with customers and ensuring that processes and operations are being handled correctly and efficiently.
As Blair described, their membership in industry buying groups has been exceptionally beneficial in their market expansion.
“While some independents don’t necessarily know us, most buying group members and national accounts do, and are so excited about us being on the West Coast and what we have to offer. We know these folks from the various meetings, and they feel comfortable with us.”
In total throughout all of its locations, United Pipe now has more than 1 million square feet under roof and 75 acres of pipe yard to support its inventory.
Until now, they haven’t done a widespread marketing campaign in the region; instead choosing to spread the word personally.
“Because this is a new market for us, we have sent several members of our sales team out to meet wholesalers face-to-face, and tell them about what we do, how we do it and, most importantly, how our business model can help wholesalers better manage their cash flow,” said Leidner.
One of the factors that is helping United Pipe expands its operations is the infusion of capital through their recapitalization by Morgenthaler Private Equity (MPE) in 2013. “MPE invested in us with the goal of super charging our growth,” said Leidner. “To do that, they helped us think through our organizational structure and build it out to a point where we can truly scale out our organization internally and find the external support needed.
“Internally we’ve promoted many people in sales, purchasing and operations. Externally, we brought in a top-tier Vice President of Operations who is charged with creating a truly flawless experience for our customers as well as manufacturers. We also hired a Vice President of Business Development, industry veteran Eric Pilas, who is developing new channels, markets and products for United Pipe to further develop growth. And finally, we are working on a number of M&A opportunities to give us further depth and breadth.”
In addition to the investment in attracting and retaining the best personnel across the organization, United Pipe has invested in technology that helps the company communicate more effectively with customers and suppliers. And they’ve invested in the inventory required to fulfill our customer commitment.
Leidner emphasized that there are two things that set United Pipe apart:
• The suppliers with which they are aligned
• Their employees.
“We select our suppliers based on those who produce the highest-quality product, and who can provide us with extremely high service levels. This is critical because we stand behind everything we sell. As far as our employees go, all I can say is that they are truly the best in the business. Consistently, our customers rate our salespeople and our drivers at the top of their class. And that is so critical, because as much as business is done using technology, at the end of the day, people do business with people they like and trust. Our employees go the extra mile, and customers see this and appreciate it.”
The company hopes to open a DC in Northern California next spring that will allow them to provide even better coverage for the West Coast. “All of our DCs support one another in terms of transfers,” Leidner said. “It’s important that we have another DC within an easy drive that Rialto can be closely aligned with.
“And we continue to look to grow through mergers and acquisitions of other best-in-class master distributors. Our door is always open, and we welcome their calls!”