Success can be defined in many different ways: providing value, being the “go-to” company/individual, revenue and earnings, visibility, fame, accomplishment, relevance, etc. How one achieves success typically incorporates organizations and individuals to help and guide one along the road traveled. For wholesale distributors, buying groups can provide that guidance. 

Buying groups were formed to maximize purchasing power, yet it seems that through evolution and an ever-changing business environment, their offerings have changed, too — expanding into other areas to maximize the impact the group has on its membership’s health and bottom line. 

Today, we take a look at the buying groups within the PHCP-PVF industry — each with its unique offerings and focus. We discuss membership offerings, philosophy and vision — and how each group helps its members succeed. 

While each group has different styles for identifying distributors and manufacturers, for simplicity we categorize distributors as “members” and manufacturers as “vendors” and service providers as such.

www.imarkplumbing.com

Building Success ONE Member at a Time

Leadership and membership: IMARK Group is a multi-vertical, member-owned and -governed group of independent distributors that generates annual sales volume exceeding $28 billion in support of the electrical/utility, HVACR and plumbing industries. Included within the group umbrella is the Luxury Products Group (LPG), which serves the needs of plumbing and lighting showrooms. 

Guiding the IMARK Plumbing Group vertical are John Aykroyd, president; Matt Roos, executive vice president; Ted Havel, vice president of marketing and supplier relations; Scott Bardreau, vice president of IMARK Plumbing; Jeff MacDowell, executive director, Luxury Products Group; and Francesca Messina, LPG’s director of marketing.

The group has 642 member companies with more than 1,330 locations, alongside 155 supplier-vendor partners and 73 member service providers. On the luxury showroom side, the Luxury Products Group is made up of 374 showroom member companies with 542 locations, alongside 72 vendors and 28 member service providers. 

Ruth Mitchell: Has IMARK added new verticals or mergers/acquisitions within the group this past year? 

John Aykroyd: We established IMARK Irrigation and IMARK Water Works to better serve our members that cross over within these market channels. Additionally, we launched IMARK PVF to support our members that are serving the industrial market. 

Diversifying into these market segments also positions our group to better attract profit-minded independent wholesalers that are concentrated within these niche markets. With this expansion, we added a senior management position to head up our new verticals; we welcome Scott Bardreau to our team.

RM: The COVID-19 pandemic changed the way business is conducted. How did the organization respond to help members adapt, adjust and survive in 2020? 

JA: A priority was to assist the membership with cash flow. Working in conjunction with our supplier partners, we shifted a greater percentage of rebate earnings from quarterly pay to monthly distributions. The quicker distribution of rebate funds provided critical relief to many members during those difficult months of March through May. 

Another priority was to provide critical information and guidance to members as the pandemic crisis unfolded. Throughout the year, members received a steady stream of information, including:

Continuous updates and guidelines from the Centers for Disease Control and Prevention.

Information on the CARES Act and tips on applying for loans.

Publishing a “Distributor Financial Playbook — Surviving COVID-19,” which provided the membership with critical resources to navigate through the crisis.

Conducting COVID-19 market sentiment surveys to get a sense of the change in market conditions throughout the year. Survey data was collected from IMARK members, suppliers and rep agencies. Information was provided to members and suppliers to share a “pulse” of the industry and insight into member best practices. 

Publishing articles in IMARK Plumbing Now! Magazine, which gave members an opportunity to share best practices and gain insight on actions that fellow members had taken to steer through the crisis. 

RM: What is IMARK doing differently now to support its members? 

JA: With the synergy and scale of IMARK Group’s 1,600 wholesalers with more than 6,500 locations, we are moving beyond the traditional role of a buying group. 

As an example, we recently rolled out a Health Insurance Captive Plan. Like all U.S. businesses, IMARK members are frequently faced with increases in the costs of providing high-quality health insurance to their employees. Our members can now join a captive insurance plan and can expect savings on health insurance premiums. 

Connected to health care, we have partnered with Fitbit to launch The #Wellness Challenge. We want our members to be safe, healthy and fit. After a difficult year of social distancing and quarantine, we are looking to make life a little more fun by creating healthy competition among members. It is easy for members to join the challenge and thanks to the support from our supplier sponsors — Blanco, Bradford White, Elkay and Oatey — member employees receive a discount on a purchase of a Fitbit device. 

Launching a 401K plan is another example of a strategic initiative. The IMARK Group Retirement Plan is multiple employer retirement plan (MEP). They allow multiple business to join one retirement plan and operate it as a single entity, rather than each business operating a separate retirement plan. 

MEPs offer cost savings and improved services by providing efficient administration of common back-office tasks. Also, by leveraging scale and purchasing power in negotiations with service providers, the IMARK Group Retirement Plan drives cost down for all participating members. 

Lastly, IMARK Growing Forward is designed to maintain and grow the group’s purchasing power by alerting member companies of fellow IMARK Group members in acquisition mode. While family considerations are of principal importance during the company sales process, many member-owners of independent distributors often feel that the best thing they can do for their employees and their customers is to sell their companies to fellow independent distributors. 

The result is  far more member companies selling to IMARK peers, which has kept that purchase volume inside our organization.

RM: What is a strategic goal or new initiative the group will focus on in 2021? 

JA: Scott Bardreau joined our team last year; he is directly responsible for expanding the PVF, Irrigation and Water Works verticals. Working together through IMARK on behalf of the members and suppliers that serve each market will come first. Sharing interests and bringing market-focused products to the membership for review is paramount. 

We look to form new partnerships and build on existing ones to provide meaningful value that will help both members and suppliers thrive going forward. And as is the case throughout our community, networking and sharing best practices will remain a mainstay initiative. 

RM: What unique services and programs do you offer to members for building their businesses? 

JA: The IMARK GainShare joint marketing planning program offers members the opportunity to set purchase objectives with a select group of supplier partners. Members are encouraged to conduct joint sales and marketing activities with local sales reps to drive sales growth and gain market share for both members and suppliers. 

IMARK University provides member personnel with access to high-quality, web-based learning materials regarding the products and applications of all major commodity products in the plumbing industry. It provides practical, efficient training so IMARK members can grow sales and solve customer problems.

The IMARK DASHBOARDS offer participating members access to in-depth analytical tools to help them better manage their experience with the group and provide guidance on how to maximize their total rebate earnings through the group’s supplier partners.

RM: How does the organization strengthen business relationships throughout the channel? 

JA: Networking and building relationships are cornerstone fundamentals at IMARK meetings. Our meeting format (either a live event or a virtual format) provides our membership with an opportunity to enhance existing relationships or foster new relationships with our suppliers. Members and suppliers meet in a formal setting to seek out new business opportunities and discuss any open issues. 

Peer networking among fellow members has proven to strengthen business relationships and build lasting friendships among members of all sizes. Member owners and executives meet in I-Nets, formal peer networking sessions, to discuss their challenges, share ideas and discuss solutions leading to best practices for business improvement. 

RM: How do members support one another during a crisis? 

JA: In the early throws of the pandemic, several members relied on their fellow I-Net networking partners as sounding boards to compare strategies. For example, members exchanged tactics for establishing safety protocols to best protect customers and employees while, at the same time, maintaining exceptional service levels. 

RM: What professional development services do you offer your members that are designed to help them grow their businesses? 

JA: Under the LPG vertical and rolling out to the IMARK Plumbing membership in early 2021 is our microlearning platform called XTeach. This is unique because it is designed to train our membership on soft skills in leadership, selling and merchandising. Most courses can be completed within four-to-six-minute increments, which allows our members to digest components of skills in small daily amounts. Itis the only platform of its kind in the industry. 

We also offer the “Concourse” for owners and senior executives to access best-practice documents on hiring, coaching and employee compensation. 

www.bluehawk.coop

Building Success ONE Member at a Time

Leadership and membership: BLUE HAWK is a member-owned purchasing cooperative focused on the HVACR industry. As one of the largest groups within the specialty, it has 218 member-owners with 1,710 locations, as well as 135 vendor partners and 54 solution/service providers. 

It has a nine-member elected board of directors who serve three-year terms, with a maximum of two consecutive terms without pay. 

The management team consists of Lance Rantala, CEO; Colleen Leppert, senior vice president of operations; Tony Burks, vice president of business development; Teri Ditsch, vice president of marketing and communications; and Charlene Fetty, revenue manager. 

RM: Has BLUE HAWK added new verticals/additions/mergers this past year? 

Lance Rantala: In 2019, BLUE HAWK became an owner of lMARK Group. United by our mutual interest in serving our independent wholesalers, the three founders — BLUE HAWK, IMARK Electrical and IMARK Plumbing — launched a new member-owned healthcare captive insurance program. Essentially, we created a self-insurance model exclusively for IMARK Group’s members.

RM: The pandemic changed the way business is conducted. How did the organization respond to help members adapt, adjust and survive in 2020?

LR: The COVID-19 pandemic necessitated a swift reaction by our cooperative’s board of directors and management team. BLUE HAWK was the first HVACR group forced to cancel its annual conference. In just a few weeks, we transformed our highly regarded in-person meeting into a successful virtual event. 

Our member-owners and vendor partners responded enthusiastically by virtually conducting our previously scheduled 5,600 face-to-face appointments. Subsequently, we saw an increase in conversions from unapproved suppliers to approved vendor partners. 

RM: What is the group doing differently now to support its members?

LR: Business has indeed felt different during the pandemic, yet BLUE HAWK did not let COVID-19 curtail our efforts to connect with the family-owned wholesalers, suppliers and service providers. We maintained frequent contact with our community through socially distanced meetings, video conferences, email blasts and social media posts. 

We even substituted our yearly Fall Advisory Forum with a Virtual Golf Cup to promote networking and camaraderie! It allowed members and vendor partners to golf locally while participating in a national tournament. Team Hawk narrowly defeated Team BLUE and was awarded the 2020 Virtual Cup Champion flask.

RM: What is a strategic goal or new initiative BLUE HAWK will focus on in 2021? 

LR: In 2021, we will leverage our web-based rebate analytics tool called “The Dashboard.” This  data-driven platform is 100 percent transparent, and displays near-real-time rebate performance with approved vendor partners and conversion opportunities away from unapproved suppliers. 

RM: What unique services and programs do you offer to members for building their businesses? 

LR: BLUE HAWK member-owners have access to many unique benefits and resources that can make a difference for their businesses and employees; our group 401(k) plan is a critical example. It’s a 401(k) solution that BLUE HAWK offers to member-owners at a group rate. 

The plan gathers many tasks involved in operating a retirement plan and hands them over to third parties, such as administrative and investment fiduciaries. So members get the benefit of offering a 401(k) plan to employees without having to own all of the work, responsibility and liability.

RM: How does the organization strengthen business relationships throughout the channel? 

LR: The three founding members of IMARK Group : BLUE HAWK, IMARK Electrical, and IMARK Plumbing – have more than 1,500 wholesalers with more than 6,000 branches in North America. Collectively, IMARK Group has become the largest member-owned, member-controlled, and financially transparent distribution network globally, with cumulative sales exceeding $28 billion per year. 

We are actively recruiting other co-ops and independent wholesalers to join forces with IMARK Group and create better programs and services for our members.

RM: How do members support one another during a crisis? 

LR: At the onset of the COVID-19 pandemic, BLUE HAWK launched a Recover Strong Program, which is ongoing. It benchmarks our member-owners’ quarterly financial performance. Participating members submit trial balances anonymously and securely through our web-based Benchmark BLUE platform. The goal is to help members minimize the pandemic’s impact by comparing their vital financial metrics with their peers. 

RM: What professional development services do you offer your members that are designed to help them grow their businesses?

LR: Our members have access to the very popular BLUE HAWK University, where more than 6,000 employees of our member firms can access on-demand training courses to learn more about our vendor partner products’ features, benefits and advantages.

www.thecommonwealthgroup.com

Leadership and membership: On Jan. 1, 2020, two premier member-owned buying groups —Embassy Group Ltd. (established in 1991) and WIT & Co. Ltd. (established in 1974) — joined forces and merged to form The Commonwealth Group, Ltd (TCG). It is comprised of independent wholesalers specializing in the plumbing, PVF, HVAC, waterworks and irrigation industries.

Overseeing the initiatives and roadmap are Mike Lepley, president; Maureen Cosyns, senior vice president; Neil Mills, vice president of finance; and Jeff Smalley, director of vendor relations. This board- and committee-driven group is dedicated to working toward collective goals and initiatives to ensure each individual owner’s success. 

By combining the purchases of more than 128 distributors, with nearly 1,600 branches nationwide, TCG is committed to its vendor partnerships and works hard to give vendors “every possibility to grow their business within TCG,” says Lepley. “The reduction of more than 40 vendors since the merger should leave no doubt in the minds of the remaining vendors that we are committed to providing them every opportunity, with limited competition, to be successful within TCG.” 

The group currently has 140 vendor partners. “A simple model, providing members and vendors alike a platform to compete and grow their respective businesses. We keep overhead low and returns flowing back to the membership, with a best-in-class aggregate pay model.”

RM: Has TCG added new verticals or mergers/acquisitions this past year? 

Mike Lepley: Coming off an industry-changing merger effective Jan. 1, 2020, and seeing the rewards of bringing the two groups together, TCG will continue to look at bolting on additional verticals or greenfield our own. We intend to continue to strengthen our existing verticals and be additive to both our members and vendors. 

However, as our members grow and look to expand, we want to make sure we are aligned to help them prosper. 

RM: What is the group doing differently now to support its members? 

ML: Our greatest accomplishment is getting rebates into our members hands quicker. This became more important during this pandemic, thus TCG’s cashflow model has proven very helpful to our members. One thing we work very hard at, and will continue to be a focus, is reducing transaction costs for our members as well as our vendors. The TCG model is structured to do just that. 

RM: How does the organization strengthen business relationships throughout the channel? 

ML: TCG’s Spring Conference provides enormous opportunities for our members, approved vendors and member service providers to meet face-to-face and network. It offers a healthy mix of social activities to move the relationship meter during and after the final bell rings. 

Our Annual Shareholders Meeting brings owners and their spouses together in the fall. The TCG-Net roundtable sessions allow our members to share best practices with their peers in a noncompetitive environment. These TCG-Net groups continue to network with each other throughout the year, which further foster those relationships.

www.adhq.com

AD is a community of more than 850 vibrant, growth-oriented independent members and 1,050 suppliers in 13 divisions in the United States, Mexico and Canada. It serves PHCP members in pipe, valves and fittings, HVAC, plumbing and decorative brands channels, in addition to its members in the electrical, industrial and safety, bearings and power transmission, and gypsum industries.

The member-owned and -governed group gives every member an opportunity to serve and be all-in. AD’s key governance bodies include its member-elected corporate board and divisional boards. About 120 member companies serve on one or more of these boards. 

“This model brings strength and wisdom to the group,” says Bill Weisberg, CEO. “From a staff perspective, we have outstanding leaders in the PHCP Business Unit, including Jeffrey Beall, our president. He’s surrounded by a slate of divisional champions and subject-matter experts in plumbing, PVF, HVAC and decorative brands, as well as areas like e-commerce, HR services and marketing.”

RM: Has AD added new verticals/additions/mergers this past year? 

Bill Weisberg: The AD community began 2021 on a high note, completing mergers with two well-regarded groups: pipe, valves and fittings group Delta Distributors and safety-focused SafetyNetwork. These were our 11th and 12th mergers since AD formed 40 years ago, and our fourth and fifth in less than two years. 

I view this trend as a testament to our compelling value proposition for independent distributors and a positive signal that our growth strategy continues to show results in the market. Mergers are good for our members — they bring benefits such as incremental volume that increases AD’s collective scale and helps us bring more value-added programs and services to help our members accelerate growth. 

They also enhance our relevance with supplier partners, all of which help our members compete and win. And the increased scale that comes from our multidivisional platform allows us to field a dynamic team of professionals with expertise in a wide range of industries, disciplines and functional areas. The programs and services they develop and oversee accelerate AD member and supplier success.

Jeffrey Beall: Delta’s total member sales across the United States are more than $3 billion. Combined with AD’s PVF members, collective member sales in AD’s PVF Division now exceed $11 billion. This creates the only true PVF group of independents in North America. 

We continue to advocate for independent distributors with programs and scale that enable their continued growth and success.

RM: The pandemic changed the way business is conducted. How did the organization respond to help members adapt, adjust and survive in 2020?

BW: AD’s team immersed itself in activities that were laser-focused on maximizing support to our members and suppliers, enabling the group to not only recover but grow. That effort took many forms, including being intentional about staying plugged into the needs of associates, members and suppliers. 

To help our members collaborate, share best practices and navigate pandemic-related protocols and regulations, we quickly launched a community message board. We created business intelligence reports using member and market data to equip members with a timely picture of the financial impacts of the pandemic. We continued to facilitate meetings and networking between members and also supplier partners. 

To connect members with expert service providers on timely topics, we co-hosted webinars on subjects such as the SBA Paycheck Protection Program and bolstering systems to protect against a rising surge of cybercrime. Leveraging our U.S.-based warehouses, we initiated a personal protective equipment power buy that provided masks and other safety items for members who critically needed them to conduct business. 

We continue listening to the needs of our members and adapting to what helps them most. I’m especially proud that despite the financial challenges we all faced in 2020, through our disciplined approach, AD was able to distribute 100 percent of supplier rebates to our members. 

RM: What is the group doing differently now to support its members?

JB: It remains crucial to us to facilitate interactions that fuel business between our members and suppliers. AD enhanced our market planning program to reflect the online nature of most training and marketing activities being held in 2020. We introduced new activities that could be conducted virtually, such as digital marketing initiatives, digital field marketing summits and AD Education Center training. 

Within the AD PHCP divisions, we conducted a webinar series called the AD Strategic Supplier Briefings, hosting more than 1,872 attendees in 38 webinars across our five divisions. These briefings are a one-stop-shop for our members to hear from suppliers about strategic changes, product improvements, new personnel and enhanced go-to-market strategies in a confidential environment. 

They were so successful we decided to keep them going into 2021 and beyond.

RM: What is a strategic goal or new initiative AD will focus on in 2021? 

BW: We’re always looking and thinking ahead toward our shared future, and always focused on our core purpose as an exceptional buying group. For this year, we’re also fixed on realizing the potential our warehouses across our U.S divisions, and evolve and grow our complement of innovative, value-added programs and services. More to come on both of these!

RM: What unique services and programs do you offer to members for building their businesses? 

BW: AD’s scale allows us to invest in an ever-evolving slate of innovative services and programs in a cost-effective way that fits each of our member’s personal vision and brings discrete value to areas of strategic importance to them. 

JB: Our major strategic programs are in areas such as e-commerce, indirect procurement services, marketing and HR services. We have dedicated internal resources supporting our members in each of these areas. And there’s even more opportunity for us to continue delivering value through programs for our community.

RM: How does the organization strengthen business relationships throughout the channel? 

JB: This is a relationship business, regardless of COVID-19. This past year has caused us all to rethink how we stay connected and communicate. Technology is a great tool to enhance relationships while we respect each other’s space and safety protocols. We have incorporated enhanced technology options to continue to build relationships. 

I would add that seeing people in their home/work environment has helped to get to know people even better. We have utilized technology and these new practices to not only stay connected but ultimately get stronger. 

RM: How do members support one another during a crisis? 

JB: Our members want to succeed, and they want the independent community to collectively succeed. One of our fundamental benefits has proven even more important during this crisis, as it has in the past. AD provides confidential, structured and meaningful networking sessions led by trained facilitators with noncompeting AD members who are market leaders in the industry. 

These meetings are a great opportunity for members to share ideas and develop sales and marketing strategies for the coming year. The relationships forged in these sessions create an easy, trusted, go-to resource when members are facing challenges. 

This was a year when many members were connecting more often than normal to get advice, troubleshoot, and just check in with one another. To facilitate that conversation, we set up an online community message board where members posted COVID-related best-practices, safety protocols and operational policies, and asked and answered questions on the challenges being faced. The AD community actively supported one another.

RM: AD introduced ‘Let’s Grow’ as this season’s meeting theme. Can you tell us more about the thinking behind it?

BW: As we began to see signs of stabilization and recovery, we were inspired to introduce “Let’s Grow” as our meeting theme. Our community has always been passionate about growth, and while we acknowledge the difficulties the pandemic has presented, we’ve made a collective commitment to get back to doing what we do best: growing, leading and innovating. 

“Let’s Grow” is about each of us committing to overcome obstacles, achieve growth, and leverage the strength of together to scale the hurdles of the pandemic. But it’s also about personal growth and seizing the opportunity to continuously better ourselves and our personal partnerships in family, community, friendships and at work. 

This includes building new habits and investing in self-development. And the AD community has done just that!