2012 Supply House of the Year: WinWholesale
A plumbing or mechanical contractor who approaches a Win Group supply house for the first time could get the wrong impression. First, the name on the supply house suggests a very limited market niche, be it Winair for HVAC products, Winpump for pumps, Windustrial for industrial PVF or Winnelson for plumbing supplies.
The size of the supply house could mislead him as well. He may think it’s a small independent operation or perhaps a branch of a multilocation wholesaler. Either perception would be incorrect.
“We have a very small business feel in our markets backed by a much larger organization,” Vice President of Marketing Steve Edwards says. “As a result, we historically branded each of our locations in a very literal way to the industry they serve.”
In fact, under the WinWholesale corporate umbrella, the Win Group of Companies comprises 526 locations in 44 states and $1.76 billion in annual sales. Although the diversified product mix varies by location, Win companies sell electrical supplies, waterworks, irrigation systems and fasteners in addition to the products mentioned above. Winnelson, by the way, comes from plumbing wholesaler N.O. Nelson Co., where WinWholesale has its roots.
Dayton, Ohio-based WinWholesale employs 4,137 people around the country. Four regional distribution centers support its local companies, including 131 bath-and-kitchen showrooms, with hundreds of millions of dollars of inventory.
Most Win Group supply houses are owned by a president who has invested in the local company and the community. This business model and the benefits it gives to Win Group supply house customers have led Plumbing & Mechanical to name WinWholesale our 2012 Supply House of the Year.
“Our philosophy with contractors is, ‘We’re pros like you,’” Chief Operating Officer Monte Salsman says. “Many contractors started their businesses from nothing and had to struggle to get that first bill paid. Our local company presidents have been through that. So there’s a kinship and deeper understanding that allow our people to serve the contractor at a different level than other wholesalers.”
Customer focusGreg Jackson went to work for Dayton Windustrial Co. in 1982 as a truck driver. Today he is president of the local company that he owns with his majority equity partner, WinWholesale.
The arrangement is typical of most Win Group local companies where the president has an equity share. The remaining locations are wholly owned subsidiaries of WinWholesale and led by a manager. The latter group includes the Noland Co. locations in the Southeast, which WinWholesale acquired in 2005.
“We strongly believe that ownership creates a different level of hunger within an individual,” Edwards says. “Overall, we believe investing in the company will drive better performance. It’s your skin in the game. And, with our business model, customers are working with someone who is an owner of that company and can make a decision on the spot.”
CEO and Chairman Rick Schwartz says the fact that WinWholesale doesn’t have branches helps local company presidents relate better to contractors because they’re both entrepreneurs. This is especially true in a down market.
“We have local companies owned by entrepreneurs, so they’re focused on the difficult economy, improving efficiencies and lowering their costs,” he says. “Because our relationships with our customers are so close, many of our presidents counsel their customers over the counter or a cup of coffee on what we’re doing to help ourselves in those areas.”
WinWholesale President Jack Johnston adds: “Our local company presidents are compensated based on their results, just like the contractor. They run a business just like the contractor does.”
Dayton Windustrial’s sales growth has been steady, Jackson says, despite a local economy that has seen the closings of General Motors plants and some of his mechanical contractor customers going out of business. Work has come from a technology center at the University of Dayton, Wright-Patterson Air Force Base and local school districts. Other projects include installations of fire protection and radiant floor heating systems.
“We’ve become the leader in the Dayton PVF market,” he says.
Jackson credits another component of the WinWholesale business model for allowing him to spend most of his time focused on his customer’s needs. The WinWholesale corporate office in Dayton handles most of his “headache” tasks such as payroll, accounting, insurance, taxes, employee training, marketing, human resources and fleet management. In return, Jackson pays WinWholesale a management fee based on his company’s gross margin dollars.
“We want to give our presidents and managers every tool possible to allow them to succeed without having to worry about all the administration,” Schwartz says. “We take all those worries away and let them focus on customer service. Get the right products to the customers on time. That is where they should spend 80% to 90% of their time.”
Inventory mattersJohn Siefert, president of Lake Erie Winnelson in Cleveland, agrees that he gets to spend more time with his customers when WinWholesale corporate handles his company’s back-office functions. His family firm, The Deegan-Siefert Co., joined the WinWholesale family in 2001.
“We have customers whose companies go back 90 years with us,” Siefert says. “I spend more time working on my company instead of in my company.”
Lake Erie Winnelson operates a bath-and-kitchen showroom and sells industrial pipe, valves and fittings along with plumbing supplies and cabinets. One of the biggest advantages of being a Win Group supply house, he says, is his access to inventory.
“That’s a huge home run in this area,” Siefert says. “We have access to the inventory in the distribution centers and all the other WinWholesale locations through our computer system. I can find a faucet in our Riverside, Calif., company and probably get it here the next day.”
Jackson adds: “Customers keep coming back to Dayton Windustrial because we provide them with a service every day. Part of that service is having a large inventory.”
Helping him to manage the inventory since 1991 is WinWholesale’s proprietary Wholesalers Information Services Executive software. In addition, the financial reporting system on WinWholesale’s mainframe computer generates profit-and-loss statements and a report that allows him to compare his company’s performance against those of the 53 other Windustrial locations. Other reports track expenses for his 27 employees, his warehouses and overall operations.
Product expertise goes hand-in-hand with the large inventory available at Win Group local companies. The supply houses work with their vendors and manufacturers reps to train their employees.
“One of the things we always want to bring to our customers is dependable expertise so they can come into one of our locations and get an answer for whatever problem they have,” Edwards says.
At its national meeting in March in Nashville, Tenn., WinWholesale created a competition around a new product showcase.
“We asked our vendors to bring in their most innovative new products and the competition was to select the best,” Salsman says. “The purpose was to get good innovative product knowledge into the hands of our local people. We then developed a database of products our people could take to customers to help save them time or money.”
Industry involvementMarketing is a relatively new function provided by WinWholesale corporate to its local companies. Edwards came on board six years ago and subsequently brought on Corporate Communications Manager Chuck Manker.
The marketing department circulates a bimonthly newsletter that allows Win local companies to share best practices in customer service and other areas. Three years ago, the department created the Pro- Rewards incentive program for contractors who can earn points for every dollar they spend with a Win local company and double points if they buy the products of the manufacturers sponsoring the program.
During the first year of Pro-Rewards, 95 Win local companies participated. Last year, that number grew to 250 and it’s up to 350 supply houses this year.
In addition, Winnelson and Windustrial locations have started a commercial water heater program through A. O. Smith. Another promotion, Green Tips from Winnelson, involves three vendors: A. O. Smith (save time and money with your residential water heater); In-Sink-Erator (create renewable energy using your garbage disposer); and NIBCO (install a lead-free and safe plumbing system).
Manker is leading a corporate effort to make local companies a go-to resource for contractors on the lead-free legislation that will take effect nationally in 2014. He’s providing educational materials to employees so they can become reliable experts during the transition to lead-free plumbing products.
“It’s not on the radar of a lot of contractors right now except in those states that have legislation in place,” Manker says. “Contractors may be depending on their wholesalers to keep them straight, but they need to be aware of it themselves.”
WinWholesale has sponsored a webinar on lead-free legislation with the Plumbing-Heating-Cooling Contractors – National Association. It’s also developing an educational piece on lead-free legislation with PHCC.
As part of its effort to reach out to contractors, WinWholesale is taking a more active role in PHCC, the Mechanical Contractors Association of America, and other contractor trade organizations on the national and local levels. It has long been a member of the American Supply Association, which will present Schwartz with its inaugural Plumbing Division Award of Excellence this month at its convention in Orlando, Fla.
WinWholesale has invested in www.winwholesale.com where contractors can set up a commercial charge account and buy products. It also is connecting with contractors through social media with a presence on Facebook, Twitter, YouTube and Linked In.
“Keeping a partnership with contractors and growing that relationship is important,” Schwartz says. “A supplier is a big part of their success, and their success is a big part of ours.”
Edwards adds: “What we’re striving for is a business partner relationship. Our ‘Pros Like You’ tagline is about our expertise, our local decision-making ability, and the breadth and depth of our inventory. We can say to a contractor: ‘We’re business owners and you’re a business owner. Let’s partner together and together win.’”