We spoke with WIT & Co., AD, Embassy Group and IMARK Plumbing to hear about their mission, membership, what sets them apart and how they are helping their members succeed. Here is what each had to say. 

 WIT & Co.

 Mission and Membership:

WIT is a member-owned group of independent distributors that strives to improve its distributors’ economic performance in all market segments they serve. WIT currently has 70 independent-distributor members, and relationships with more than 160 vendors (manufacturers) and 19 service providers. WIT offers its owners cost-effective incentive returns, speed of payment and transparency of the WIT business model.

Leadership: 

Joining WIT in 2017, Brandy Reed was named executive vice president. Reed directs activities required for the successful operation of WIT and praises a talented WIT staff and accomplished distributors with solid commitment to a collective team effort.  All parties play an important role in corporate office functions and execution of WIT’s strategic business plan.

Best in Class:

Each buying group has its niche. I asked Reed to describe what WIT offers its members that they cannot find elsewhere — what makes the group stand apart. “WIT continues to offer technology enhancements and improvements to streamline the cost of doing business,” she notes. “WIT manufacturers work with our distributors to develop lucrative purchasing and marketing strategies to maximize their return on investment. WIT engages with vendor partners to offer exceptional buying specials, exclusive sales incentives and marketing opportunities at a substantial savings.” 

Outlook:
Ruth Mitchell: What is the vision and leadership direction for this year? 

Brandy Reed: WIT plans to further cultivate relationships with both distributors and vendors. Internally, WIT continues to focus on making our business model more efficient by working closely with our distributors and vendors in all areas of technology. 
RM: What do you see as the outlook for 2019 in terms of industry health?

BR: We anticipate a market like last year, with the possibility of some slowing in the second half of the year. The tariff issues of 2018 drove an unusual number of price increases over the past year. Until there is some resolution to this issue, additional increases in some product categories are still possible. Increased interest rates and the tightening of credit may slow the multifamily and residential housing sectors. 
RM: What is your outlook for the group’s sales growth, membership growth and industry consolidation? 

BR: After meeting with numerous HVAC and plumbing vendors at our October negotiation sessions, we forecast revenues in the mid-to-high single-digit range. WIT has historically welcomed conversations with distributors interested in joining the group and will continue to engage in discussions where the relationship is mutually beneficial. As noted in 2018, we believe there will be continued mergers and acquisitions in our industry by both distributors and vendors. 

Best in Class:

RM:  Please describe WIT’s offerings to help your members be best in class.  

BR:  WIT continues to offer technology that drives efficiencies for both manufacturers and distributors.  Participation in this initiative continues to grow as both groups recognize the importance of speed and accuracy as it pertains to data.  WIT’s business model quickly delivers data and resources to both manufacturers and distributors.  WIT engages in two annual conferences with our owners.  The Distributor/Vendor Conference falls in late February will be held at The Gaylord Texan Resort and Convention Center in Grapevine, TX.  The conference allows all parties a time allotment to engage in speed meetings and discuss business strengths and opportunities for the upcoming year.  The Fall Networking and Shareholder’s meeting will commence in September at the historic St. Anthony Hotel in San Antonio, TX.   

AD 

Mission and Membership: 

“Our mission is to help our members, supplier partners and associates grow and prosper,” says Bill Weisberg, AD’s chairman and CEO. “We are a member-owned group passionate about bringing growth-oriented independent distributors, best-in-class suppliers and great people together to outperform the market and to stay ahead of the competition.”

AD is comprised of more than 500 independent distributor members, across 9 divisions and 3 countries. “Our members’ annual sales surpass $40 billion,” Weisberg notes. “We partner with more than 600 manufacturers and our member-curated list of 50 service providers covers everything an independent distributor needs — from hiring and recruiting to discounts on cardboard boxes and credit-card processing fees.” 

Leadership:

Under the leadership of Weisberg since 1991, he oversaw the group transition to member ownership in mid-2018. The group is governed by a board of directors consisting of 12 individuals, including Weisberg, and elected by the membership at large. 

I asked Bill what changes have taken place since the transition to member ownership and it remains business as usual. “I’m very pleased that AD’s members are now our owners,” he says. “The positive energy that has come from that, internally and with our members, has been tremendous. There’s no question that AD is here to stay and in good hands for the long haul. As part of that, we’ve conducted the first direct election of our board members and created a Chairman’s Council, among other things.”

He adds: “Our vision hasn’t changed. We strive to bring our members and suppliers the programs and services they need in order to compete and win, today and in the long term. We focus on delivering solid results in the present and on making bold moves to insure success in the long term.”

Best in Class:
RM: What does AD offer its members that they cannot find elsewhere? 

Jeffrey Beall (president of the group’s U.S./Canada PHCP divisions):  For more than 25 years, AD has successfully operated across multiple industries. We have the team in place to run our group efficiently, with dedicated divisional teams to focus on our members and suppliers. 

Our members find it easy to do business with our group. They only need to login to one website to view reports, make payments, view their eCommerce SKUs and more. We streamline the work for our members to focus on growing their business, not the paperwork of being in multiple buying groups. 

Our networks continue to be voted the most valuable part of being an AD member. Our high-quality membership combined with our confidential, structured and meaningful networking sessions led by trained facilitators, provides a safe environment for distributors to share best practices and learn from the best! 
RM: Please describe AD’s offerings to help your members be best in class. 

JB: We are living in a changing world and at AD, we are never satisfied with the status quo. Our innovative mindset enables us to take risks, while our size affords us the resources to make investments in programs such as AD eCommerce Solutions, HR and procurement services to help our members compete.

Outlook: 
RM: What do you see as the outlook for 2019 in terms of industry health?

JB: Despite some headwinds due to tariffs, we are confident that our members will continue to take share. In fact, we are forecasting double-digit growth for our PHCP members. We are bullish about 2019. 
RM: What is your outlook for the group’s sales growth, membership growth and industry consolidation? 

JB: Consolidation has always been part of our industry and continues to be. However, we believe that consolidation provides a great opportunity for those that stick with it. Our strategy is to embrace change and we have a great track record doing that. For the past five years, every PHCP division has seen consistent growth in both overall sales and membership — net of consolidation. We are confident in our continued growth and AD is well-positioned to help strong, solid independents grow and take their businesses to the next level.
RM: Tell us about your strategic goals and new initiatives the group will focus towards in 2019 and beyond. 

JB: AD eCommerce Solutions continues to be the largest initiative for the group. We now have more than 3 million SKUs representing more than 2,000 manufacturers. Eighty-six of our members are using our data on their live Digital Branches; 20 of those are members in AD PHCP. Helping our members go live with their Digital Branches, through our SKU production, consultative services and Webstore offerings will be a focus of 2019. At the heart of this program is cost savings. We are consistently looking at how we can leverage our size to help save our members money in building their Digital Branches. 

Now in its second year and under the leadership of Linda Hoff, AD Decorative Brands is rapidly adding more suppliers and inventing creative ways to help build the business of our independent distributor members who operate more than 275 kitchen and bath stores and showroom locations across North America. Building strong supplier relationships and organizing exclusive training opportunities are among the top priorities to support our members gain market share. 

Through an acquisition of a bearings and power transmission buying group, AD has two redistribution warehouses. Private label is a part of the PHCP wholesale industry we operate in, so having a successful model to evaluate in-house will certainly be something we investigate. 

RM: Can you give a brief overview of what is happening within your different groups, Decorative Brands, Plumbing, PVF, HVAC, etc. 

JB: 2018 was a strong year for our Plumbing Division, which posted double-digit growth. We credit this record-setting year to the strength of our membership. These companies grew faster than the market through organic growth, distributor acquisitions and conversions to AD suppliers. Our business development pipeline is strong, and we believe the division is poised for a successful 2019 as we continue to build upon these accomplishments. 

AD PVF is coming off an incredible year that included strong growth both organically with existing members and through acquisition. We’ve also added some very strong new members over the last few years and believe we have a solid baseline for continued future growth with our supplier partners. We’re looking forward to expanding AD networking and educational opportunities in 2019 with our members who are actively focusing on oil and gas, fire protection and waterworks/utility markets.

The HVAC Division experienced another record-breaking year of growth in 2018. The division remains steadfast to helping our HVAC members grow faster than the market in 2019 through eCommerce, strategic marketing programs and commercial excellence initiatives.

AD Decorative Brands’ outlook is good for 2019. Our members continue to build more showrooms and invest in the remodeling of existing showrooms as they see their markets expanding. Our members and suppliers averaged double-digit growth through 2018, which we expect to continue at least to mid-year 2019. Both members and suppliers are adding to staff to meet the growing needs of their customers. 

In late 2018, AD’s plumbing and heating members in Canada with showrooms were invited to join the Decorative Brands Division. The integration of these members will grow DBD’s showroom locations to more than 325 locations and has made us a true North American decorative plumbing buying group. We will continue to fully develop our supplier partnerships in decorative plumbing, cabinetry, lighting, tile and aging-in-place product categories. 

RM: Can you give us a snapshot of upcoming group events? 

JB: The 2019 AD eCommerce Summit (Feb. 25-27) and the 2019 AD Finance & HR Summit (June 3-5) will host decision-makers and rising stars from independent distributors across North America. The event agendas are chosen by members for members; its customizable nature allows attendees to choose the sessions of most interest. Perhaps the most valuable aspect of these summits is the opportunity to network with professionals at independent distributors across AD’s nine industries. 

The 2019 AD PHCP Spring Network Meeting (April 29-May 1) is the first time all three of AD PHCP Divisions (plumbing, PVF and HVAC) will come together to network and share best practices at Green Valley Ranch Resort in Vegas. In the past, HVAC held a separate Spring Network Meeting. We are excited to welcome them into the fold this year. 

The 2019 AD North American Meeting (Sept. 16-19) is our flagship annual event where our PHCP members and suppliers spend an intensive week together investing in their relationships, celebrating successes and working together to build their businesses. This year’s event is back at the Gaylord Texan in Grapevine, Texas. 

Embassy Group LTD

Mission and Membership:

Embassy’s mission is to align a select group of independent wholesalers with the very best in manufacturing, and to provide a host of financial, marketing and educational platforms to compete against the national chains. Embassy currently has 70 members representing 800 branch locations covering 50 states that offer plumbing, HVAC and waterworks. In addition, the group has 114 preferred vendor partners, representing three divisions. 

Leadership: 

The group is under the leadership of Mike Lepley, who started in 2010 as its director of business development and rose to president in 2013. As a seasoned industry veteran, Lepley came into the group with extensive manufacturing and distribution experience. 

Best in Class:
RM: How does Embassy help its members be best in class?

Mike Lepley: Embassy is a member-owned group, and we spend a great deal of time on the financial returns to our members. We have a lean staff, keep the model simple and are 100-percent transparent. You will not see a big backroom of overhead changing out dollars on fluff. We respect the financial returns of our vendors too much to invent ways to spend their money. This approach returns the greatest amount of monies to where they were intended — the Embassy wholesaler. 

Culturally you will not find a better group in the business. Big volume through limited membership makes it easy to communicate and execute the goals we set. We are board- and committee-driven. Our group is laser-focused and all willing to do their part. Of course, we make it easier by getting out of the wholesaler’s way.

Outlook:

RM: What do you see as the outlook for 2019 in terms of industry health?

ML: We are optimistic about this year. 2018 was a phenomenal year and although we saw some pullback in November and December, 2018 year-end numbers were stellar. Tariffs and price increases will still hold some growth at bay but overall, we are encouraged by the backlog and growth of our members. Additionally, we will be rolling out a group solution involving EDI and other technology to improve the efficiencies for all. 
RM: Can you give us a snapshot of upcoming group events? 

ML: Embassy’s annual events include our Spring Conference, March 18-22, in San Antonio, which includes 100 percent of the Embassy members and vendors. Our annual shareholders meeting will take place in August in Chicago.

 IMARK Group

In late 2018, the boards of Omni Corporate Services, Equity Plumbing and IMARK Group announced a merger of the three organizations into one, thus becoming the only multivertical, member-owned and fully member-controlled marketing group serving the plumbing and electrical industries. Effective Jan. 1, IMARK Group is the name of the new organization, with Omni and Equity having combined to form the new group’s plumbing vertical, IMARK Plumbing. 

I asked John Aykroyd, president of IMARK Plumbing about the merger. 
 

RM: What was the reason for the merger and how does it enhance the membership?

John Aykroyd: In a consolidating market, our member distributors recognize that we cannot be satisfied with the status quo. The merger to create IMARK Plumbing resulted in the largest industry group in terms of membership and boosted the purchasing power of IMARK Group by more than 30 percent. We added close to one hundred additional showrooms to our Luxury Products Group division and are planning to offer LPG services to IMARK Electrical members that operate lighting showrooms. 

We have numerous member distributors that operate in both the electrical and plumbing industries. As we are member-owned and member-governed, we provide these companies with the option to belong to one group instead of multiple ones. We are well-positioned for growth and will continue to be a very important and essential channel to market for leading plumbing manufacturers.

Mission and Membership: 

IMARK Plumbing is focused on being the preeminent global multivertical and only member-owned and member-controlled distribution network in the facilities construction, maintenance and operations of buildings, and what’s inside of them. The plumbing vertical consists of 646 members, 156 vendors and 20 service providers.

Leadership: 

RM: Please share with us who is in the leadership roles of the newly formed group?

JA: The entire IMARK Group management team is committed to the success and continuous growth of IMARK Plumbing. I am the president of IMARK Plumbing, Matt Roos is the executive vice president, Ted Havel is the vice president of marketing and vendor relations, Steve Perencevich is the vice president of member development and Jeff MacDowell is the executive director of the Luxury Products Group.

Best in Class: 

RM: With the formation of the new group, what new services will it provide to its members? 

JA: With our combined resources, we are positioned to provide best-in-class services to our membership through increased rebate returns, improving cash flow, e-commerce platforms, webstore development and national account solutions. 

RM: What do you see as the outlook for 2019 in terms of industry health? 

JA: I believe 2019 will be a challenging year for all industries. The first quarter will be interesting with continuing uncertainly related to the tariff situation and the effect on pricing in the marketplace. We have seen multiple increases since they were first announced, and more are coming. The other sticking point will be the interest-rate hikes that hamper residential and commercial construction. The housing market has been softening for the last two quarters and I don’t see it picking up anytime soon.

RM: What is your outlook for the group’s sales growth, membership growth and industry consolidation? 

JA: Our plumbing vertical will experience above-market-average growth for 2019 with our preferred suppliers as we add to our marketing programs and information technology resources. We will certainly continue to attract new members but also expect more distributor consolidation in this segment as well as other distribution industries.

RM: Tell us about your strategic goals and new initiatives IMARK Plumbing for2019 and beyond. 

JA: Our major priority is to ensure that the merger of our organizations is as smooth as we can make it. We know from experience in both the plumbing and electrical markets that 1 + 1 will equal 3 for our members and suppliers.

In the near term, we will convert our plumbing back-office systems to the SAP platform our electrical vertical operates on, consolidate our websites and improve our member’s and vendor’s experience. 

Our strategic goals for 2019 and beyond include:

• To create and build the only fully member-owned and member-controlled multivertical group with transparency. 
• To provide existing and future multivertical members an option of one “IMARK.”
• To create a platform for future verticals to service related construction, MRO and industrial end customers as related to national accounts integrated supply.
• To provide all members of all verticals a back-office service benefit that can maximize investment returns and a reduced cost to serve.

RM: Please describe the offerings from the niche groups within IMARK, and how they help your members be best in class? 

JA: A great example is in the area of e-Commerce. Many of our members are moving to develop these capabilities. Others realize that sooner or later, they will want (or need) to develop e-commerce alternatives to engage customers now and in the future. For these companies, there are two major questions, When and how will we build this capability?  How much are we willing to spend to get this done?

We recognize that one size does not fit all — and that there are many approaches to developing these capabilities. IMARK Plumbing is working with technology companies with experience in wholesale distribution to develop and offer cost-effective alternatives that can help our members get started — and to win — in a cost-effective way. Our partners include Second Phase and Trade Service, Distributor Data Solutions, XO Logic, My Plumbing Showroom, Moblico and others. 

Also, IM Supply is a company that offers electrical and plumbing supplies to national or multiregional MRO customers that seek a national supply contract. IM Supply uses IMARK Group members (electrical and plumbing) to act as the fulfillment network for MRO product needs.

RM: What does IMARK Plumbing offer its membership that they cannot find elsewhere? 

JA: We have taken a major leap forward in technology with our “Dash Board” initiative. By leveraging our memberships purchasing information, we enable them to make better-informed purchasing decisions and help them reach individual rebate targets as well as group incentive goals. And, possibly the most important, is financial transparency across verticals. As a member-owned group, the actions taken are actions always in the best interest of the membership. Finally, as the largest player in the electrical space, we are now a solid No. 2 in plumbing and will look to build on this in short order.

RM: Can you give us a snapshot of upcoming group events? 

JA: The plumbing vertical will host two more meetings this calendar year, one being the Vendor Invitational in late July and then the Fall Annual Meeting in October. IMARK will streamline the number of meetings moving forward.