Relationships with suppliers, customers, employees and even competitors are the defining factor in wholesale distribution. While much has been written about the perceived decline of the wholesaler's role in the supply chain, the fact is that wholesalers today are in the perfect position to create alliances with contractors by understanding and fulfilling their needs.
A contractor may need help solving a problem on a job or locating a repair part for discontinued equipment. He may need training to keep his business profitable. He may even need to set out on a new path to grow his business. Wholesalers who provide solutions to their customers can cement alliances that last for years.
This relationship-building with customers is best represented by two Midwestern hydronics wholesalers -- Heating & Cooling Distributors of Overland Park, Kan., and Northern Radiant Floors, a division of Lino Lakes, Minn.-based Northern Wholesale Supply. Each company not only sells hydronic and radiant floor-heating products, but also designs the systems for the projects, providing a one-stop shop for their customers. And both companies provide extensive on-the-job training for contractors who want to enter the hydronic/radiant market.
Teamwork
Family-owned Heating & Cooling Distributors employs two full-time hydronics designers -- Jason Proffitt and Larry Lang, vice president/sales. Lang's younger brother, Jim, also designs systems as needed, while sister Amy handles the bookkeeping and accounting, and older brother Bob, the firm's president, deals with the HVAC side of the business. Originally an HVACR wholesaler, the company entered the hydronics and radiant floor-heating business about 10 years ago when it lost its major HVAC line."We found out how devastating to our business it was to rely on that one supplier," Larry Lang says. "We knew that we had to diversify or we wouldn't survive. About that time, someone came to us with a boiler product line and convinced us to get into hydronics."
No other wholesalers in the greater Kansas City area were involved in hydronics or were even interested in learning about it, he says. But the demand was there as former East Coasters moving into the area wanted radiant heat in their homes.
"To get into hydronics, you had to provide all aspects of it -- product, design, installation -- because the dealers had never seen it either," Lang explains.
He taught himself the hydronics basics by reading everything he could find about the subject. Those first hydronics jobs were trial-and-error, but his customers were willing to experiment with him.
Lang tells contractors that if they ever have a chance to bid on a hydronic job or are asked to replace a boiler with a forced-air system, he will go with them and explain how to upgrade a boiler to make it more efficient or make a home more comfortable with radiant floor heat.
"We want to be a member of the contractor's team," Lang says. "And part of being on the team is taking the worry out of a job. I tell my dealers, 'If you're willing to trust me, I'll do the research and design, and you provide the labor to install the system.'"
Lang usually accompanies dealers on their first few boiler start-ups to ensure they practice the proper techniques, which the contractors are willing to learn. If the job is a replacement of a boiler system, Lang asks to visit the jobsite before designing the system.
"The contractor may not understand how the system works, so it's much easier to take me onsite where we can look at the job together," he says. "Then I can go back and give him a bid and a design based on what we discovered at the site."
On commercial jobs Lang will visit the site several times to make sure the installation is correct. Some of these projects are very large in scope and many of the big mechanical contractor firms are not familiar with hydronic systems. Lang makes sure that the general contractor knows what is needed for the installation of the boilers and the radiant tubing.
For Lang's family, it has been a challenge to keep up with his love of hydronics. But they agree that it has been good for business.
"Larry's taken us to places we never thought we'd go," Jim Lang says. "It's a challenge because we have to know a lot of things about many different products, from pumps to boilers to European controls. But there's no question that diversification into radiant floor heating has helped us dramatically. Large companies want to do business with us because we have extensive knowledge and experience in the field."
Onsite training is critical
On the outskirts of Minneapolis is another wholesaler who determines his customers' needs before selling a system. Jeff Jannetto is the hydronics manager at Northern Radiant Floors; Jon Wallace and David Tomala round out his team. Wallace designs hydronic/radiant systems and assembles bids, and Tomala handles the purchasing as well as some design work."I don't look at a customer and figure out what I want to sell him; I find out what he needs first," Jannetto says. "We've had guys who have stuck with us through thick and thin, and they're great people. If you make them money and are loyal to them, they'll be loyal to you."
Northern Radiant isn't a typical radiant wholesale business. Jannetto and his team don't worry about warehouse space or collecting money. Because it is a division of Northern Wholesalers, the warehousing, order fulfillment, shipping and billing functions are handled by the corporate group.
In 1996, Northern Wholesale built a new warehouse/office building using radiant floor heat, and owner Nick Gargaro says it¿s been a great selling tool for the radiant side of his business. And the success of the radiant division is very satisfying to Gargaro, who is a strong proponent of radiant heat.
"Due to our specialization in hydronic/radiant floor heating, we have an expertise that a lot of other supply houses don't offer," he explains. "Because we only focus on hydronics, we're very knowledgeable. We've come across every type of design problem or challenge. Consequently, we have a reputation for doing good work. Even if a contractor has a good relationship with a supply house in Colorado, he will still give us the radiant floor work because he knows that we have the experience to do the job right."
Jannetto worked for a contractor for four years before joining the Northern Radiant team, so he knows the issues that contracting firms deal with every day. He believes in being a hands-on distributor; he travels all over the country to give his customers assistance when they need it.
"We solve problems," Jannetto says. "If I have to go to Ohio to see a customer, I do. If you're partnering with somebody, you have to make him or her money. And you can do that by being available when they get in a bind.
"Another way to make contractors more profitable is training them, educating them. But you can't send contractors to a two-day school sponsored by a manufacturer and expect them to do a job. You have to physically go to the jobsite and train them. There are not many wholesalers who do that. We target customers that we can work with and who want to learn. And those that do learn aren't afraid to share their newfound knowledge."
About 22 wholesalers in the greater Minneapolis area are involved in hydronics and radiant heating. What gives Northern Radiant the edge is its design services, Jon Wallace says.
"The other wholesalers were more plumbing-oriented and then branched into radiant," he says. "We've always concentrated on hydronics, boilers and radiant floors. Because of that knowledge, we can offer design services to any contractor bidding a hydronic or radiant job.
"Some contractors that have been doing radiant a while don't really need the design. But they may want to have a tube layout design that they can send out with a newer crew. It gives them a predetermined plan of what they need to do, saving the owner both time and money."
And Northern stands by its work. A simple drawing of the hydronic design is created before giving a quote to the contractor. If the contractor accepts the bid, then a more detailed design is created on computer. If Northern misses anything on the drawing, the company will absorb the cost; it won't make its customer pay for the mistake.
While Northern is doing very well in its radiant business today, David Tomala believes that the United States will see an explosion in radiant heat in the next five to 10 years.
"In Europe, there is about 95% saturation of the hydronic/radiant market," Tomala notes. "But over here it's only about 3% to 5%. It can only grow in the next few years, and we're in the best position to take advantage of that growth when it happens."
