Buying groups have increasingly become a pivotal force in the plumbing-heating-cooling-piping (PHCP) industry by strengthening supplier relationships and providing tools for our ever-changing market landscape. As distributors face the relentless challenges of fluctuating market demands, technological advancements and stiff competition, buying groups’ collective bargaining power and shared resources have emerged as a game-changer. 

These alliances enable smaller entities to leverage competitive pricing and terms similar to their larger counterparts. They also offer a platform for knowledge-sharing and innovation —- fostering a more resilient and adaptive industry landscape.

The strategic significance of buying groups extends beyond mere procurement advantages. They are crucial in providing peer-to-peer support, offering collaborative, peer-driven help and sharing industry knowledge. In addition, marketing programs and tools, along with placing the spotlight on industry trends and future growth opportunities, provide members with the tools and opportunities to expand offerings within their organizations — benefiting customers and team members. 

This collaborative approach not only strengthens the market position of member companies but also contributes to the overall growth and sustainability of the PHCP sector, highlighting the transformative power of unity in navigating the complexities of the modern marketplace.

There is strength in numbers, and we wanted to hear what is taking place within the buying groups IMARK, The Commonwealth Group (TCG), and AD. Here is what each had to say, along with a spotlight on a member about how their group gives them an advantage.

IMARK Plumbing
www.imarkgroup.com

The IMARK Group is a dynamic, member-owned and -governed group of independent distributors with a focus in the electrical, utility, HVACR, plumbing, irrigation, waterworks and PVF industries. The Luxury Products Group (LPG) serves the needs of independent decorative plumbing and lighting showrooms. At the helm is President John Aykroyd.

The Wholesaler: What are your membership statistics and the verticals within your group?

John Aykroyd: IMARK’s membership currently stands at: 

Plumbing: 620 members with 1,450 locations

Decorative showrooms (LPG): 154 members with 1,037 locations

Irrigation: 58 members with 183 locations

PVF: 76 members with 224 locations 

Waterworks: 37 members with 143 locations

Member service providers: 57 professional service companies

The Wholesaler: What additional support and value-added services does your buying group provide to its members beyond collective purchasing? 

JA: With the synergy and scale of IMARK Group’s 1,600 wholesalers with more than 6,500 locations (BLUE HAWK, IMARK Electrical, IMARK Plumbing), we have shifted beyond the traditional role of a buying group. 

For example, we offer an IMARK Health Insurance Captive Plan. Like all U.S. businesses, IMARK members frequently face increases in the cost of providing high-quality health insurance to their employees. Our members can join a captive insurance plan and expect savings on health insurance premiums. 

The IMARK Group Retirement Plan provides the membership with 401K plans that offer cost savings and improved services by efficiently administering everyday back-office tasks. Also, leveraging scale and purchasing power in negotiations with service providers, the IMARK Group Retirement Plan drives costs down for all participating members. 

Networking and building relationships are cornerstone fundamentals at IMARK and LPG meetings. Our meetings allow the membership to enhance existing relationships and foster new relationships with IMARK suppliers. Members and suppliers meet in a formal setting to seek out new business opportunities or discuss any open issues. Peer networking among fellow members has proven to strengthen business relationships and build lasting friendships among members of all sizes. 

I-Net meetings offer plumbing member owners and executives an opportunity to meet in formal networking sessions to discuss their challenges, share ideas, and discuss solutions leading to best practices for business improvement. 

LPG offers best practice-sharing network groups providing showroom executives and sales personnel the opportunity to exchange ideas and share best practices with fellow LPG showrooms across the country. 

We offer innovative marketing programs and resources, all designed to drive greater engagement and partnership among the members and approved IMARK suppliers, including: 

•  GainShare Joint Marketing Planning, a performance-based incentive to increase sales and profits for IMARK members and suppliers. GainShare encourages members to develop specific joint marketing plans with mutually agreed-upon annual stretch purchasing goals. The program has proven to drive above-market growth for suppliers and members and delivers enhanced profits. 

•  In the problematic challenge of recruiting and retaining employees, our educational platforms have provided an advantage to the membership.

•  LPG has recently launched a new Learning Management System (LMS) called Xteach in partnership with the Absorb LMS platform, which will improve members’ ability to use content for HR and sales training. This platform will allow all verticals to import training modules from the American Supply Association, the Heating, Air Conditioning & Refrigeration Distributors International, and the National Association of Electrical Distributors for their employees. 

• IMARK University provides plumbing member personnel access to high-quality, web-based learning materials regarding the products and applications of all major commodity products in the plumbing industry. IMARK University provides practical, efficient training so IMARK members can grow sales and solve customer problems. Last year, 1,287 IMARK member employees completed more than 8,200 learning modules. 

•  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 maximizing their total rebate earnings through the group’s supplier partners. 

The Wholesaler: What are the key market trends you’ve identified in the PHCP industry, and how does the group leverage these insights for the benefit of its members?

JA: The ever-expanding merger and acquisitions activity has significantly impacted the PHCP industry. To stay ahead of consolidation and maintain and expand the group’s purchasing power, the IMARK Growing Forward program has proven to be an indispensable resource. The program alerts member companies of fellow IMARK Group member companies 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 customers is sell their companies to fellow independent distributors. This initiative has resulted in far more member companies selling to IMARK peers and has kept purchasing volume inside our organization.

The Wholesaler: What strategic goals and new initiatives will the group focus on in 2024? 

JA: Through our passionately progressive management disciplines and family-first culture, our goal is to help independent wholesalers thrive and survive. 

Jeff MacDowell, LPG executive director, explains our 2024 showroom initiative: “LPG continues its commitment to ensuring the success of brick-and-mortar showrooms. Our ever-expanding Xteach LMS platform provides the membership with best-in-class learning modules. We look to expand the hardware and lighting categories to better serve the needs of our current and future members. Boutique and upscale luxury showrooms will be a growing segment for LPG. As always, LPG remains the premier decorative group in the industry, and our family of partners continue to work ever closer together.” 

•  Recently launched, Fill It Now is an exclusive, closed e-commerce environment for IMARK Plumbing, LPG and BLUE HAWK members. Fill It Now allows members to access a larger pool of products from each other, which they can then offer to their own customer bases. This expansion of available inventory enables them to provide a broader range of products to their existing customers, potentially attracting more new customers interested in these additional offerings. 

In addition, it allows members to tap into new customer bases associated with IMARK Plumbing, LPG and BLUE HAWK, as their members gain access to each other’s inventory and can market and sell those products to their respective customer networks. Members can also leverage the marketplace to offer inventory that has a long turnover. 

•  As our industry continues to evolve and take a more technologically driven approach, so must the way we serve our members. Automated communications, real-time action-driven program updates and push notifications with pertinent membership information are all part of a long list of technology-driven user enhancements that IMARK plans to roll out as a part of an implementation series with customer relationship management services provider Salesforce. 

These enhancements, set to go live in mid-2024, will gradually roll out over the next six months and begin making their way to both members and suppliers. The existing IMARK portal user experience will remain the same; however, communications and notifications from the group regarding account status, program progress, rebate accrual and savings opportunities will be more frequent, customized and timely. 

•  In three short years, IMARK has experienced unprecedented growth in our irrigation, waterworks and PVF verticals. With continued focus on these areas of growth, we are rapidly expanding our membership and supplier base. 

Vice President Scott Bardreau reports: “We are well-positioned to grow our footprint in these three verticals. I am excited about the tremendous support being provided by new and existing suppliers and members alike. By implementing strategic transparency and alignment, along with real-time, data-driven opportunities, IMARK is creating genuine opportunities for increased brand awareness, strengthened relationships within the verticals and genuine return on investment for all.”  

AD
www.adhq.com

AD is a member-owned group, passionate about bringing growth-oriented independent distributors and best-in-class suppliers together to outperform the market and stay ahead of the competition. At the helm is Jeffrey Beall, president, AD PHCP Business Unit.

The Wholesaler: What are your membership statistics and the verticals within your group?

Jeffrey Beall: AD is the largest contractor and industrial products wholesale buying group in North America. We provide independent distributors and manufacturers of construction and industrial products with support and resources that accelerate growth. Our 850-plus independent owner/members span 14 divisions in the United States, Mexico and Canada, with annual sales exceeding $70 billion. 

AD’s 14 divisions cover industries including electrical, industrial, safety, bearings and power transmission, plumbing, PVF, HVAC, decorative brands and building materials. In addition, we partner with more than 1,000 manufacturers and 38 service providers specializing in finance, operations, marketing and information technology.

The Wholesaler: What additional support and value-added services does your buying group provide to its members beyond collective purchasing?

JB: It’s significant and evolves to meet the needs of our members. Our multi-industry approach gives us the necessary scale to offer plenty of enhanced programs and services that help our members seize opportunities and grow faster. We support members with programs such as eCommerce Solutions, a sales incentive program called AD Rewards and access to vetted nonproduct service providers. In addition, the Center for Independent Distributor Leadership offers leadership education for member employees. 

Our programs are designed to be an extension of our members’ teams and integrate into their business models. We know that not all our members need the same support, so members also only pay for programs they use.

Behind our value-added services are more than 70 dedicated AD associates focused solely on our shared programs and services across all 14 industries. This is outside of our divisional and operational teams, and they are passionate about supporting independents and driving innovation to our industries. 

The Wholesaler: What are the key market trends you’ve identified in the PHCP industry, and how does the group leverage these insights for the benefit of its members?

JB: Each year has its own set of challenges and surprises. While the past few years we saw steady demand, supply chain challenges and price inflation leading to inventory build by distributors, the current trend has been inventory rebalancing, price deflation in certain products and higher interest cost, leading to a more cautious outlook. 

As we know, there is still much that is unpredictable. The one steady trend has been the need for data to manage the business, both on the supplier side and the distributor side. AD invested in developing and enhancing our real-time programs/reports. These reports help members make the most-informed decisions to run their businesses, manage and track purchases and maximize cashflow. We provide them with access to timely reports that help in these areas by managing purchases around reports and how they are tracking to date. 

The Wholesaler: What strategic goals and new initiatives will the group focus on in 2024? 

JB: Our ongoing goal is to ensure our members, suppliers and service providers feel as if AD is the best partner to support their goals, and that associates feel AD is a great place to work. To do that, we work with our owner/member-led governance groups to strategically select areas of focus across the business, and within each of our divisions. 

This year, we’re focused on maximizing engagement within the AD community. In 2023, we built out dedicated member and supplier engagement teams and it’s been great to see the response to this level of advocacy and support. We’re also focused on making sure that our Executive Networks, which are non-competitive industry groups of independents that have dedicated time to come together at AD meetings and share best practices, continue to be one of the most impactful benefits of joining AD. 

For our associates, we are proud to be recognized as a Top Workplace in the Philadelphia region for five years running, and in Canada for the second consecutive year. We receive these recognitions from a third-party anonymous engagement survey and our goal is to keep engagement levels high. We have an incredible team of associates who are passionate about our mission to support independents and they are the reason AD is as successful as it is. 

From a divisional perspective, our strategy is to work in partnership with our owner/members and our governance groups to focus on areas where we can leverage scale to accomplish needed efficiencies in the distribution market chain. Our boards and committees are structured in ways for us to hear ideas and build out solutions through a planned approach. 

Coming into this year, we experienced tremendous success expanding our membership in our current industries and adding new complementary industries to directly support our member and suppliers’ growth objectives. We will continue to focus on segments in water works, groundwater, oil and gas, fire protection, refrigeration, hydronics and irrigation. 

To support us in this goal, we have created several task forces/councils made up of members and suppliers to identify opportunities. We have a lot of bright leaders in our AD community, so working closely with them keeps us focused and servicing their needs. By dedicating these governance groups, we ensure that our direction is aligned with what our overall AD community needs, and it’s been exciting to see this momentum.  

The Commonwealth Group
www.tcgltd.com

The Commonwealth Group (TCG) is a dynamic alliance, driven by a collaborative board and committees, dedicated to achieving shared goals and initiatives that ensure the success of each individual owner. TCG capitalizes on its expansive national reach and scale to deliver unrivaled purchasing power to its members. Its offerings include financial incentives, a streamlined payment model, access to marketing resources, robust networking opportunities and, most importantly, transparency — all designed to bolster each owner’s bottom line. 

At the helm is President Mike Lepley, who oversees the group’s 105 members, 138 vendors and 18 service providers, in the plumbing, PVF, HVAC, waterworks/irrigation verticals. 

The Wholesaler: What support and value-added services does your buying group provide to its members beyond collective purchasing?

Mike Lepley: TCG offers a wide array of value to our members. The most substantial benefit is the opportunity to belong to a group that is limited in members, but has a very large footprint when it comes to purchasing volume. This allows the group to work closely in meeting the financial goals and other opportunities set forth. The same is true with our vendor partners. TCG is not a hunting license, but a true collaboration with our members and vendors to grow their respective businesses. 

This not only happens through the financial goals, which is obviously a key component, but the combined approach to a market and the strategy to elevate and differentiate collectively in that territory. The best-shared electronic data interchange adoption in the industry is, hands down a huge value for members and vendors. Vendor participation is now a requirement to join TCG. The rebate analytics feature allows members to track progress toward group and individual goals. 

TCG Net sessions during our annual shareholders meeting are always great successes, as similar, noncompeting companies can openly network and share best practices. 

The Wholesaler: What are the key market trends you’ve identified in the PHCP industry, and how does the group leverage these insights for the benefit of its members?

ML: We are very proud to be engaged with our industries governing bodies, such as ASA, HARDI, the Mechanical Contractors Association of America and the American Water Works Association. These organizations have a litany of tools, as well as economists, that keep us ahead of the curve. Again, because of our limited membership and having the leading independents serving on the various boards, we can communicate on the latest developments and trends sooner, rather than later. The communication piece is key and our committees are very responsive. We continue to see consolidation and have been able to help identify matches for sellers and buyers. 

The Wholesaler: What strategic goals and new initiatives will the group focus on in 2024? 

ML: As always, TCG puts a lot of emphasis on the financial return to our membership. We don’t get caught up with “bells and whistles” that often dilute shareholder return. We continue to build out our data and content repository for our membership, and we will enhance the engagement opportunities for our members with each other and our endorsed vendor partners. We have great leadership on our board and committees, and we will continue to grow the group while embracing the values, integrity and character that makes TCG.