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Traditionally, buying groups have been defined as entities that offer products and services to its members at reduced prices, as long as a minimum number of buyers are purchasing. However, as all things do, in business and in life, the function of the buying group has been changing.
Today, buying groups have gained respect and earned members on the promise of being marketing differentiators. The Wholesaler looked at buying groups in the industry to gain perspective on how change, in general, has affected their organizations and how they will tackle change in 2018.
Mission: Affiliated Distributors (AD) helps its members, supplier partners and associates grow and prosper. AD is passionate about bringing growth-oriented independent distributors and best-in-class suppliers together to outperform the market and stay ahead of the competition.
Leadership: Joining AD in 1983, Bill Weisberg has been the chairman and CEO since 1991. Weisberg led AD into Canada and Latin America, and expanded the company’s distribution network to include seven industrial and construction divisions.
Outlook: In regards to AD’s outlook for 2018, Weisberg said, “AD’s collective results in 2017 in member sales, purchases, and earnings resulted in high single-digit growth, breaking records in remittances as well as sales. We enter 2018 with cautious optimism; however, we are forecasting another year of high single-digit growth in line with 2017 across all market segments within AD Plumbing, PVF, HVAC and Decorative Brands.”
AD has some enticing efforts planned for the year. Weisberg said, “Certainly, the largest of our new initiatives is our eCommerce Solutions program. Between AD staff and the employees within AD business partners, there are over 140 people dedicated to this program. We have over 170 members participating through a monthly subscription to our content. Together, we have already built 2.4 million fully enhanced and attributed SKUs from 2,400 different manufactures. Over 40 of our members are now live with AD content on their webstores. In February, we are hosting our second cross divisional eCommerce Summit, where members can share experiences and learn about industry trends in the world of eCommerce. This spring we will host our very popular distributor only Network Meetings along with our first combined HR and Finance Summit. In the fall, our newly formed AD Decorative Brands Division will have their second meeting, and AD Canada Plumbing & Heating will meet for their annual meeting. The year will conclude with our North American Meeting.”
AD is also planning new efforts for 2018. Weisberg said, “We continue to expand our offerings in AD HR Services as well as AD Procurement Services. AD HR Services connects members with high-quality, innovative and cost-effective HR service providers, provides them with best practice sharing and professional development opportunities, and creates a foundation for a strong AD HR community. AD Procurement Services primarily leverages the group’s buying power in the non-traditional products area, with the goal of saving our members’ money and increasing efficiencies. AD PHCP, in another exciting new initiative, will focus on further developing the exciting AD Decorative Brands Division, which supports the ever growing kitchen and bath industry. Product categories include decorative faucets, sinks, showers and tubs, hardware, cabinetry & decorative lighting. Membership is comprised of 19 inaugural members with 200 locations across the U.S.”
Embassy Group Ltd.
Mission: Embassy Group Ltd. aims to create a framework for its members and vendors to increase market share and enhance profitability. This is done through creation and implementation of buying, marketing and operating strategies. This hand-selected, cohesive group is proud of its members’ ability to increase each others’ strength in the market. Simplicity, transparency and streamlined operations allow the group to offer a high ROI.
Leadership: Mike Lepley joined Embassy in 2010, becoming president in 2012. As an industry veteran, Lepley came into the group with extensive manufacturing and distribution experience in the plumbing and HVAC industries.
Outlook: Lepley spoke to the group’s overall outlook for the industry. He said, “We feel fairly optimistic in 2018. Purchases are up and we see our members expanding into larger warehouses, adding new locations, and acquiring companies. All three of our divisions have been growing and we are encouraged that growth may continue, as our waterworks/underground has been very strong; hopefully, laying groundwork for more residential and commercial building.”
Regarding plans for 2018, Lepley said, “Our annual Spring Conference, which brings together our members and vendors, is a major event that will take place in Miami in March. Our annual Shareholders Meeting will be held in Napa Valley, California. Embassy will continue to add to our membership, adding the very best independent wholesalers in plumbing, PVF, HVAC and waterworks. We will continue to consolidate our vendor base, creating greater opportunities for approved partners, and implement technology to afford our members and vendors the ability to maximize their profitability.”
Mission: Equity Plumbing provides a combination of marketing solutions and superior returns to member distributors and above-average annual market growth to preferred suppliers. The group drives success by providing a wide range of resources and services to independent wholesale plumbing and PVF distributors to help them meet sales goals. Suppliers and members work together on strategic relationships, market share and profitability.
Leadership: Matt Roos is the founder of Equity, and has been president since 2008.
Outlook: Ted Havel, VP Marketing & Supplier Relations at Equity, spoke to the group’s overall outlook for 2018. He said, “Equity member wholesalers and suppliers recently completed our 2018 Outlook Survey and the majority predict that 2018 will be a stronger year for sales growth than 2017. Expectations on sales growth range for the mid-single digit to low-double digits. Commercial construction followed by residential construction are expected to be the leading market segments that will provide growth. Consolidation will continue, and in our opinion, accelerate in our industry over the next several years. Our group is off to a strong start to the New Year as we continue to expand and recently announced 13 new member companies along with five new supplier partners.”
In terms of the plans Equity has in motion for 2018, Havel said, “Our 2018 Annual Meeting will be held October 29-31 at the Hyatt Regency O’Hare in Chicago. Networking is a cornerstone attribute of our meeting. Strengthening existing relationships, establishing new ones and exploring mutual opportunities that lead to increased sales and profits are fundamental benefits gained for all attendees. In 2018, we also plan to continue to develop and offer innovative and effective marketing programs and resources. We want to be at the forefront with innovative and cost effective technology solutions to confront the ever changing and challenging competitive landscape for wholesale distribution. For example, we recently introduced the ‘Equity E-branch Content Management Kit,’ which provides members with tools and resources to support the development of a best-in-class web store. Other marketing programs we will continue to expand and promote include ‘Equity to the Maxx,’ ‘GainShare,’ and ‘Gold/Platinum.’ All of our programs and resources are available on our website, which we have invested heavily in over the last three years to be best in class management tools for both our members and suppliers.”
A new initiative Equity will focus on in 2018 is its new SAP ERP Platform. Havel said, “Leveraging the power and flexibility of SAP, we have increased efficiencies of our back office operations. Plus, our new operating system provides a better resource to develop enhanced analytic tools and benchmarking reports that we can use to drive greater collaboration between our suppliers and members. With the direction and guidance of our Distributor Advisory Committee, we recently expanded into the decorative plumbing hardware space. Our objective is to better service the needs and aspirations of our showroom locations by fostering partnerships with industry-leading suppliers of decorative plumbing hardware.”
OMNI Corporate Services Ltd.
Mission: OMNI Corporate Services Ltd. provides its wholesaler members with innovative marketing resources and promotional programs to succeed. Through its purchasing power, the group delivers a competitive balance for the independent plumbing distributor, consistently working to maintain quality of membership, depth of programs, and professional support.
Leadership: John Aykroyd was named the president of OMNI in 2016. He is an accomplished executive with a background in marketing, sales and operations.
Outlook: Echoing the sentiments of others in the industry about the new year, Aykroyd said, “I believe 2018 will be a great year for our members and vendors.”
Since taking on leadership of OMNI, Aykroyd has been knowing for expressing that the group is is in the business of information. That tone continued in his forecast for the year, as he said, “We have our annual meeting in Palm Desert in early February and our Vendor Invitational in July. These two meetings are critical in developing better programs for our members as well as creating marketing plans with our vendors to drive revenue growth.”
When Aykroyd took over OMNI, he hit the ground running with changes including the KeyBank credit card program for members, a mobile app, and a computer program center on allowing members to track key purchasing data. In terms of more changes on the horizon, Aykroyd said, “We have several key initiatives that will enable greater participation from our members.”
WIT & Co.
Mission: A member-owned buying group, WIT & Co. works with distributors and vendor companies to provide purchasing and marketing programs, central payment services, technical support, and networking. WIT works toward collective goals and initiatives that ensure each owner’s success in the plumbing, heating and cooling industry.
Leadership: Brian Cobble is the president of WIT. An industry veteran, he is the president of G.W. Berkheimer and previously served as present of HARDI.
Outlook: Charlie Moorhead, executive vice president of WIT, provided the group’s overall outlook for 2018. He said, “The consensus seems to be that the industry revenues should likely be up again in the 4 to 7 percent range. We feel strongly that certain regions of the country will continue to outperform. WIT is predicting middle single-digit growth in 2018. From an industry standpoint, we believe there will be continued mergers and acquisitions by the large national distributors, as well as the larger independent regional distributors. While it’s probably too early to tell how all of these changes will ultimately impact the independent distributor, it should be noted that their expectations will be somewhat different from the relationship-orientated style of management that our distributors have experienced in the past.”
WIT has various plans underway for 2018. Moorhead said, “We’ve had great early success with our new WIT Net Enhancement process and will continue to work on this project in 2018. These efforts streamline the flow of transactional data between distributors and vendors. Planning is well underway for both of WIT’s two major meetings in 2018. The annual Distributor/Vendor Conference is scheduled for March 5-8 at the Hyatt Regency Hotel in downtown Dallas. And, our Fall Networking and Shareholders Meeting to be held later this year at the Boston Marriott Longwharf from September 4-6. Also on the horizon and in early stages of discussion for 2018 is a meeting with key WIT vendors to explore how we can improve our major spring conference.”
WIT is committed to continuing to evaluate changes occurring in technology in 2018 and beyond. Moorhead said, “Understanding that our distributors look at technology from a different perspective based on their size, market and business model, WIT plans to act as a resource for our distributors: one that can provide as much current and relevant information about new technology for all of our distributors. As an example, WIT recently supported a meeting of larger distributors in the group to look at various options available to our distributors seeking sources for “rich content.” WIT is also committed to the ongoing process of the networking and development of our NEXT generation managers and principals.”