Titles are downplayed. Everyone is on a first-name basis and there is a strong sense of camaraderie among the staff.
“We treat every employee as an owner by running an open-book company,” says Bob Robinson, president. “Each person either has access to or can find out every detail about our business, except the compensation of other employees.”
The firm seeks to hire and retain people who are self-starters and are well disciplined.
“We believe in building future leaders for our business, allowing every employee to gain more responsibility,” Robinson says.
Customer or factory issues are handled at the lowest possible level, he says.
“You can only grow a business at the rate that you can develop people,” Robinson notes. “We are careful in who we select and try to teach business philosophy as we teach products and procedures.”
No Commissions
Similar to EDOS, SUPPLY HOUSE TIMES' other 2005 Rep of the Year, RepSouth does not compensate its sales staff by commission. Robinson says that no one has received a commission since 1975; instead everyone is paid a salary and gets a performance bonus.“This fosters a team approach to sales and specifications,” says Hans Haas, vice president, who joined RepSouth 21 years ago. “One person might work against another if we were commission-based.”
There are times when it is wise to walk away from an order, such as when a customer is “holding an auction” (shopping for a rock-bottom price), says Bob Smith, executive vice president, who has been with the rep firm 19 years.
“If you are working for commission dollars and you haven't done too well that month, you will sell at almost any price you can get by with,” Smith says.
“We are selling the manufacturers' plans and programs as opposed to just quoting the job or the products,” Robinson adds. “Our commitment is to both sales and marketing.”
By paying salespeople a salary, no one suffers an income reduction when new people are hired; new people do not experience sudden wealth; and everyone is protected from ups and downs, Robinson says.
“The worst anyone suffers is to earn the same income as the prior year, regardless of business growth or specific territory performance,” he notes.
Growth Through Acquisitions
Much of RepSouth's growth has been through acquisitions. In 1992, RepSouth acquired Joseph Keller and Associates of Richmond, Va., serving parts of North Carolina and all of Virginia. In December 1996 the firm bought a portion of Mechanical Products of Charlotte, N.C., and in January 2000 it acquired all of Central Sales Co. of Newport News, Va. Earlier this year, RepSouth purchased Whyte and Associates of Frederick, Md. The rep firm recently added the Rheem Water Heater line to its product offerings, also hiring former Rheem factory rep Bill Beeler to work with its Maryland group.“Our growth has been natural and easy,” Robinson says. “We grew only into adjoining territories and by acquiring existing businesses from retiring owners that had some of the same lines and few conflicting lines.”
The company's current expansion plans involve adding more lines and growing organically by selling more at higher prices.
Every acquisition has brought quality lines and quality people to RepSouth, while helping pave the way for its previous owners to successfully retire, he says.
RepSouth's product focus is on high-end kitchen and bath products and commercial and residential construction.
The firm has committed substantial resources to providing commercial quotations. Often the commercial quote is a cross-referencing service because the customer already knows the cost, Robinson says. The inside sales staff is available by phone from 7 a.m. until 6 p.m. every day.
Acquisitions Expert
Robinson has become something of an expert on acquisitions. In addition to his involvement in RepSouth's acquisition activities, he has helped more than 10 outside companies with acquisitions or consolidation, according to Haas. Other rep firms will call him when the owner is thinking about retiring and needs to plan for the future of his company. They will ask Robinson for advice about the benefits of consolidation or being acquired.“He does an excellent job. It turns out to be a win/win for the seller and the buyer,” Haas adds.
Robinson is a firm believer in planning for the future. The first sentence in RepSouth's philosophy statement is: “We are in business forever.”
“When you don't plan for the continuation of your business, you are cheating your customers, your manufacturers, your employees and yourself,” Robinson says.
“RepSouth has a family atmosphere,” says John Fox, who joined the rep company through its acquisition of Whyte and Associates. “Nobody is leaving this place. They look at longevity. They work toward success through long-term planning.”
Competitive Edge: Quality People
RepSouth views the expertise and teamwork of its employees as its competitive edge. Several of its employees have a wholesaling background: Bob Smith, Scott Thomas, Eric Early and Shawn Gerst.“We do not recruit our people from wholesalers, but there have been a number of people from the wholesale channel entering the rep business,” says Scott Thomas, vice president of RepSouth's Virginia operations, who worked for Newport News, Va.-based Ferguson, where he was in the management trainee program in inside sales.
“From being on the other side I know there is nothing worse than calling a rep and waiting a day for an answer or not getting the information,” Thomas says.
“I understand if someone calls us three times in an hour that he has someone calling him five times in an hour. I understand the wholesalers' systems and priorities.”
Smith worked for Parnell Supply of Concord, N.C., a small independent wholesaler, for seven years before joining RepSouth.
Eric Early, quotations manager, worked in various capacities for several wholesalers.
“I prepare quotes the way I liked to get them when I worked for a distributor,” Early says. “Some companies quote with just the model number and price, but I quote with as much detail as I can confirm.”
Shawn Gerst, recently hired for the Frederick, Md., branch, which was formerly Whyte and Associates, previously worked at branches of Hughes Supply (Orlando, Fla.) and Ferguson.
“He was a buyer for Hughes in its Frederick, Md., office and he really knows inventory and the process side of things at wholesale,” says John Fox, Maryland sales rep.
The company has a busy training schedule. In-house training classes are offered twice a month. The courses cover product information, pricing, marketing and sales strategy for each line, as well as listening and interpersonal communication skills. Inside and outside salespeople are sent to the manufacturers' training schools.
Industry Consolidation
Manufacturer consolidation has worked to RepSouth's advantage so far, Robinson says. “We have gained new products to sell and for the most part, we have done ok. Most manufacturers are more forgiving than 10 years ago about representing companies that have some overlap.”However, Robinson says vendor consolidation is the biggest threat to the rep business.
On the whole, wholesaler consolidation has not hurt the rep firm, he asserts. “We won on some and lost on others,” Robinson says. “Where we did our job right, the demand for our products did not change. Manufacturers still need salespeople who can represent their products and deal with architects, engineers, kitchen dealers, contractors, service agents and end users. There has not been that much change in the way people do business.”
Thomas notes that the wholesale market is changing as middle-size wholesalers are acquired, resulting in a mix of relatively small, local supply houses and very large wholesalers. “The key is to keep adding value,” he says.
As consolidation continues and wholesalers get bigger, some have created master distribution centers. “They put certain products into their branches and tell the branches these are the products we support,” he says. “When you are in, that is great. When you are not in, it is a little harder.
“When our product goes into the wholesaler's master distribution program, we have to work that much harder to pull the product through their facility,” he says. “We go to specifiers, architects, engineers and mechanical contractors to try to create demand for our product.”
Initially, RepSouth avoided the builder segment and the associated rebates, but now the company has one builder-only sales rep, Robinson says.
“In some markets, our outside reps spend well over 50% of their time with the builders,” he notes. “Our manufacturers are becoming more committed to this segment.”
Warehousing
Warehousing is an important part of RepSouth's business, Robinson says. “We try to recognize when and where it makes sense and equally important, when and where it does not. It must be tied to the manufacturer's overall marketing plan. Warehousing is not free, no matter who does it,” he says.
According to Robinson, the benefits of rep warehousing include keeping the pipeline full of products, making C and D items available for immediate sale, offsetting long lead times and offering products that are in shrinking demand each year.
The Future For Independent Rep Firms
Robinson sees a strong future for independent rep agencies. He says he expects to see more of the major fixture manufacturers using independent reps.“We do a better job at a lower cost,” he says. “We are constant, stable, and have better relationships with everyone in the market.”
Using an independent rep also means lower administrative expenses and softer costs at the plant, he adds.
On the down side, reps will continue to be challenged by heightened expectations from manufacturers and wholesalers, usually with no change in compensation, he says.
RepSouth takes pride in its healthy relations with wholesalers.
“We try to resolve every issue with every customer,” Robinson says. “Our people feel welcomed at every account. We do some business with almost every wholesale account in our markets.”
Sidebar
RepSouth Manufacturers' Representative Headquarters:559 Griffith Rd., Charlotte, N.C.
Branches:
Columbia, S.C., Wilmington, N.C., Richmond, Va., and Frederick, Md. (near Baltimore).
Employees:
28 company-wide.
Officers:
Bob Robinson, president; Bob Smith, executive vice president;
Hans Haas, vice president; H.B. Harrison, vice president; Scott Thomas, vice president/Virginia operations.
Territory:
North Carolina, South Carolina, Virginia, Maryland and Washington, D.C.
Product Focus:
High-end kitchen and bath products and commercial and residential construction products.
Customer Base:
Wholesale distributors: Section 15 - plumbing & PVF wholesalers; Section 10 - architectural specialties wholesalers; plus architects, engineers, designers, kitchen & bath dealers, contractors, builders and end users.
Sidebar: History Of RepSouth
The company now known as RepSouth was founded in 1964 by George W. Strickland as a single man agency, Strickland Sales. Strickland and Joe Keller of Richmond, Va., bought out another rep firm, H.S. Woodward, Manufacturers' Representative, that covered Virginia, North and South Carolina for Elkay and Fee & Mason. The two men bought out the business separately and operated two separate companies for more than 25 years. Bob Robinson joined Strickland's company as a salesman in 1975, followed by Hans Haas and Bob Smith, who joined the company as sales reps in 1984 and 1985, respectively. In 1990, Mr. Strickland took early retirement for health reasons. In 1992 the new company officers changed the name of the company from Strickland Sales to RepSouth. They did not want to include any of the principals' names in the business name as they planned to build a company that would outlive many generations to come. In 1992, RepSouth acquired Joseph Keller and Associates of Richmond, Va., in effect putting H.S. Woodward's business back together.Sidebar: The People Of RepSouth
Charlotte, N.C. OfficeBob Robinson, president
Bob Smith, executive vice president
Hans Haas, vice president
Peter McCranie, sales representative
Jason Abernethy, sales representative
Debbie Phillips, office manager
Chuck Pearson, builder/showroom sales representative
Eric Early, quotations manager
Brent Hood, inside sales manager
Dave Bayko, inside sales
Eddie Wolter, inside sales
Joey Wolter, inside sales
Deborah Wallace, sales support
Denise Near, sales support
Dan Griffin, warehouse manager
Scott Matthews, assistant warehouse manager
Columbia, S.C. Office
Mitch Clark, sales representative
Wilmington, N.C. Office
Reed Taffer, sales representative
Richmond, Va. Office
Scott Thomas, vice president/Virginia operations
H.B. Harrison, vice president
Haynie Hite, sales representative
Jerry Dowdy, inside sales
Tom Lazarchek, inside sales
Chuck Berryman, warehouse manager
Mike Fugatt, inside sales
Ty Crandol, sales representative
Frederick, Md. (Baltimore) Office
John Fox, sales rep
Richard (Dick) Whyte, sales associate/consultant
Carol Whyte, office manager
Kathleen Fox, sales rep
Shawn Gerst, sales rep
Bill Beeler, sales rep
