ASA, buying/marketing plumbing/PVF groups
& national wholesale distribution companies
BY JOHN MARTIN
PVF industry veteran
Welcome to the fourth edition of “Martin’s Corner” for The Wholesaler in our new year of 2011. Hope your business is going the way you hoped it would! We have a good solid eight months plus ahead of us, so keep up a good spirit and work hard. Good things really do happen to “good people” — I’m convinced of that. Sometimes it takes longer than others, but do not give up the faith that it will. We all have to pull together to help get our great nation back on her feet and fuel our business and personal efforts. But it will happen! In the meantime, thanks for checking in again to see what I’m up to.
Bringing you all the success stories of some of the independent wholesalers in our industry from around the country has been fun and interesting. I will be doing that again, but thought I’d give you a break from that reporting style to do an “Opinion Article” on our industry. You know, most people have an opinion on just about everything — me included — but many keep them to themselves due to shyness, not being sure of the opinion, not wanting to upset the status quo, etc. Me? I believe in freedom of speech! I love to give my opinions when asked about different issues — even if it might be one that makes me work a bit of “overtime” in my thought process to draw out a real and believable answer, know what I mean?
Having said that, however, I feel “I have some meaningful remarks and responses” to share my thoughts on when it comes to this double-edged sword, if you will, about industry and wholesalers/manufacturer success in today’s world. Please stay with me on this very important issue that I believe will have significant impact on our collective success going forward and for years to come.
First of all, let me be very honest. I really should declare that this is a free-of-any-charge personal opinion and non-solicited advertisement in 100% support of all the independent and national companies that support ASA and its industry efforts. And at the same time that my opinion and support also applies to the market-unified efforts in general of those buying/market groups and the supporting national wholesalers as well.
Just a few words about the widespread national (and international) wholesalers in our industry as they relate to the ASA segment of this issue as well. I in no way leave them out of my thoughts and scope of importance to me, the industry manufacturer I work for (Anvil), and the industry as a whole. Think about the mega growth these national companies have experienced since the mid-1980s to present! The key point of interest I offer to that question is that other than some pure organic growth, they did it via the M&A model.
Think about it for a moment. The hugely successful companies that were acquired by and large by these aggressive growth companies were what? The fact is they were hugely successful independents or hugely successful regional distribution companies in the plumbing, PVF, mechanical and/or underground wholesale markets — just like the current members of ASA and/or the current member/owners of the industry buying/marketing groups. Doesn’t that make sense?
They went to the best, and for the most part the best were active members of what? They were active members of the ASA — and some were active members of a successful buying/marketing group!
My point is that for the most part, the successful companies in our industry today (PVF or plumbing or a mix) were or currently are active members of ASA. Today, many buying group member/owners are active ASA members, but some aren’t. And several buying group corporate offices are members, but some aren’t. Meanwhile, national companies’ corporate offices are members, but not all their locations participate.
So, my friends, I am trying to understand what makes some independents see the need to be part of a very successful buying/marketing group and why they feel that active membership in ASA is important to their business as well. To the opposite side of the coin I’m trying to understand why some independents feel the strong need for their buying group, but no need for ASA. You get the picture, right?
My struggle is the same with understanding why a national company’s field location does not see or feel a need for ASA, and quite honestly, why do some buying groups feel the value of being an ASA member at their HQ office location, when some of their own member/owners are not current members?
Let’s start with the basic definition of some key words in the title of this “Martin’s Corner” industry issue.
ASA — the American Supply Association
• American — We are the folks involved in this association/industry. We are Americans, right?
• Supply — In the simplest form, Webster says that the definition of Supply is “to furnish or supply something that is lacking!”
• Association — Here Webster indicates that the definition of an association is “to organize people for a common purpose with a formal structure, the connection or relation of ideas, feelings and reasoning, etc. for advancement of the common good!”
Okay then — The American Supply Association (a.k.a. “ASA”) according to Webster is people living here in North America banding together to furnish or supply goods that are lacking in our market place, with a common purpose and a formal structure that creates connections to needs, and relates to ideas, feelings and reasoning to advance the common good of our industry through that effort plus education, advocacy, benchmarking and networking!
Now then, what in the world does this have to do with all the buzz and hoopla in our world today about “what group do you belong to, and which group is better, and I don’t belong to ASA any more because I get all I need from my group, etc. etc, etc.?” Okay, that’s fair. Let’s see what Webster has to say about these key words: “Buying,” “Marketing” and “Group.”
Buying/marketing group
• Buying – Webster states that the word buying is “the act of acquiring an item or an article or a product that is needed at a fair price.”
• Marketing — Webster says that marketing is “the total of activities involved in the transfer of goods from the producer or seller to the consumer or buyer — including advertizing, shipping, storing, and selling expense!”
• Group — Webster says that a group is “any collection or assembly of persons, a number of persons or things considered together as being related in some way or another — to associate together in a group as with others!”
So let’s review this: A Buying/Marketing Group, according to Webster, is “a group that actively acquires an article or product at a fair price, which includes all the activity that is involved in the purchase of that item from the manufacturer of choice for the independent member wholesaler’s inventory or customer on a project that takes into consideration total volume of the membership/ownership of the collection of companies in the group to leverage all their buying power annually for the specific volume of the products produced and supplied by a vendor!”
Okay, a national wholesaler in our industry then should have no issue (in my opinion) with my definition of “ASA” above based on Webster’s definition. So, making that assumption, I’d state that it is my opinion there is little difference in how I rolled up “Webster’s” definition of buying/marketing groups v/s the structure from top down to field operations for a coast-to-coast company that is all under one ownership, huh?
Wow! I’m impressed I got all that out without having to take a break and catch my breath! Lots of words and ideas to play with, but at the end of the day, my assessment is this — please pay very close attention to what you are about to read:
• An ASA meeting is the place for wholesalers and vendors to firm up new industry relationships, visit with mature ones, contribute to and support enhanced opportunities for business growth, learn of new industry education and technology advancements, and to review the successful efforts of any and all government affairs work that has been done for our industry by ASA’s advocacy group in the current period.
• A buying/marketing group meeting is the place for wholesalers and vendors to firm up/review annual programs and define the field support efforts needed to grow market share together.
• So, as readers, if you agree with these first two at face value as stated for now, then this third one should simply state that national companies should view ASA as I noted above, and should look at their vendor endeavors much the same at the buying/marketing groups do.
Summary comments
I have worked in and been around ASA (both national and regional) and buying/marketing groups for many years during my career in this good industry. I also witnessed first hand the amazing “M&A” trip that took place over several years. With equal satisfaction, I can say I believe in and still support ASA, all the buying/marketing groups, and the activity of the national companies that are out there today. It is no secret that our industry and all the related associations have gone through tough times the past few years for many reasons. All the M&A work that went on over these past years really did take a toll on the financial membership base revenue of the ASA. That should not be a surprise to anyone. As a huge piece of the independent wholesalers were caught up in this activity, the active membership suffered. The number of members in ASA and the associated revenue went south as these valuable independents were acquired!
Throughout this article, you will see direct quotes from some respected industry people in all phases of the business. I asked them all the same question reference their honest opinion of ASA, the buying groups and our national companies. I think you will find them all pretty interesting, so I’m gonna ask you all to wrap up reading my closing remarks, then go back and read any points of interest to you from me in this report, and each one of these industry remarks as well — one more time. I’d be glad to discuss with you any area of concern you might have to clarify my position, as I’m sure any of these folks would also.
In closing, you know it is always a good thing when everyone agrees with your thoughts or plans or beliefs, but I don’t expect that at all, and especially on the issues I have covered in this article. If everyone agreed with me, I most likely wouldn’t be addressing it here, would I?
What I will ask of each of you reading this — and especially if you are a business owner, or in executive management of a company, or in line for future ownership of a business, etc. — take some time and stop to review with your team what your company needs now and for the future to grow and compete and stay focused on the market, etc. Where will it be five years from now, 10 years from now, etc. If you are one that is involved currently in ASA and a buying group also, the industry is pleased, and would ask you to share all the reasons you are with maybe a member of your group that is not.
If you are a member of one and not the other, try to find out from someone why they spend the money to be members of both. There have got to be positive reasons why, know what I mean? If you are in leadership of a national company and have membership, the industry thanks you as well. I’d ask you to try to find a way to get more of your field locations or to allow your field locations to participate. If you are in the field for a national company and want to be involved in ASA, express that interest to your management.
Finally, if you are the executive head of a buying/market group and have membership in ASA, I’d ask you to try to find a way to have all your member/owners become active members of ASA also. If you are a member of ASA, but your group is not, talk to the executive of the group about “why not.”
What about the vendors in this equation? Do not worry about vendors. You know those guys — they go wherever their customers go; you know that, just looking for orders and market share growth! No big deal, huh? Yes it is a big deal really!
My company has been in the industry and related associations since all have been in existence, and no matter how tough things get, it has always been the feeling and a reality that for us to not attend and support an ASA meeting or the old Central Supply Association meeting would just not be right. The independent wholesaler in the beginning is what helped make us what we are today — and we feel the need to always give back.
We do the same with groups and with the national companies, but we feel it is a must to support industry associations. We do the same with the contractor associations as well. You know the big difference between them and the wholesaler associations? I just attended the MCAA Annual Convention in, of all places, Maui! There were a total of just under 2,000 people registered. This is a combination of union mechanical and plumbing contractors, service companies, vendors, etc. It would be hard for you to find a handfull (if that many) of union contractors in the U.S. that did not attend.
Why? It is important to them to find out what is new— to seek out peers and management of larger companies to see what they do about labor issues, new ideas and methods of construction, the green movement, new vendor products, education, advocacy, student chapter new hires, etc., etc. They are all open when they talk of work, labor cost, back log, etc. They share information to help make their companies better.
I know it is different. I know the MCAA members are contractors and you are wholesalers. Some wholesalers are in attendance at the MCAA as well to promote more business with maybe their larger customers and look for a couple more while they are there. Having said that, and with due respect, these companies all work together and talk about progress and process, but when several wholesalers get together in a convention room, they tend to close up or with-hold valuable opinions and learning tools about industry needs, because one or more of them may compete in a given market. I know there are certain things you don’t or can’t talk about, but just from an education point of view, I’d prefer an educated competitor over one that is not, wouldn’t you?
Being with a national company (wholesaler or vendor) or being a member/owner of a buying group certainly has advantages, but most all of them are instinctively catering to and addressing issues that only a member company or the group and its management should address.
Being a member of ASA gives you open education opportunities, advocacy, peer group open discussion from across the country, industry vendor contact, benchmarking, full-blown networking and much more — plus a connection to everything industry related that you may desire.
National companies, in my opinion, you also need all of this. And your field locations most likely would gain a lot from the education and networking.
That’s it, my friends. I’ll most likely be speaking for all the vendors you currently have when I say we support you — all of you, no matter which direction you take. More vendors will be at ASA if you are, and that’s a fact.
It would be a personal victory for me if everyone stopped what they were doing and started the paperwork to become a member of ASA. But as they say in Texas, “That ain’t gonna happen!” I realize that, but I just ask that you give it more thought and talk to a few folks about it. Call the ASA office and tell them you want to speak to someone about membership. You’ll get someone quick. Call me, and I’ll get someone for you. Same way with any industry question, call me and I’ll help and support you.
Gotta go for now! Thanks for reading and hope to hear from you on some of these points. Remember: “It is your industry — use it to Your Advantage and to the Industry’s Advantage! Support, Support!”
So long! See ya on the road!
— John
Born Johnney E Martin in Venus, Texas in 1944, he is one of nine children raised 100% on a cotton and grain farm that his father share-cropped. After high school, Martin went into the Army and then Reserves. From there he joined what was then Grinnell Co. in 1968 and has been with them every day of his life since then through four different owners, now Anvil International, A Unit Of Mueller Water Products. He currently serves as vice president of national account sales for the Anvil Mechanical Unit. Holding various sales and management positions for the company over the years, Martin has received numerous industry and association awards and has been involved with industry education foundation boards, and the Board of Directors of both asa and mcaa. Martin currently resides in Castle Rock, Colo., with his wife Kathy of 27 years; they have a daughter Kayla who is 25 years old. He is committed to staying involved in the plumbing and pvf industry (which he loves) for many years to come.