Master distribution plays a pivotal role within the plumbing, heating, cooling and piping (PHCP) industry, offering the ability to streamline supply chain operations and enhance efficiency for manufacturers, wholesalers and their customers.
By consolidating products from multiple manufacturers under one roof, master distributors provide wholesale distributors convenience, extensive product offerings and efficient logistics solutions, facilitating smoother transactions and reducing lead times, — driving customer satisfaction.
This centralized approach not only fosters stronger partnerships between manufacturers and distributors but also empowers contractors and end-users with access to a diverse array of high-quality products, ultimately driving growth and innovation.
We wanted to hear more from master distributors about what is trending, and how they help their customers be best in class. We reached out to Lewis Finn, CEO of Control Supply; Mackenzie Roman, general manager of The Stock Market; and Corey Lowsky, senior vice president of sales at United Pipe & Steel, to hear more about the industry and its landscape.
The Wholesaler: Thank you for joining us today to talk about master distribution in the PHCP industry. Let’s get our readers up to speed on your companies.
Lewis Finn: Approaching our 50th year in business, Control Supply is a master distributor of HVACR controls to the wholesaler only. Located in Copiague, N.Y., we have 17 “family” members and more than 3,000 products in stock from 50 manufacturers. Control Supply prides itself on being the problem-solver of choice.
Whether it’s a single product needed the same day, a large stocking order to be filled immediately, technical help or sizing and specification work, Control Supply handles all these things daily. We are the perfect blend of new school technology and old school customer service mentality. Our goal is to create fans by being responsive and agile in everything we are asked to do.
Mackenzie Roman: The Stock Market operates as a distributor for a comprehensive range of products including finished plumbing, kitchen and bath fixtures, HVAC and connected home products. Our network includes 10 strategically located, nationwide distribution centers, allowing us to efficiently manage and deliver a vast inventory from top manufacturers.
We pride ourselves on our ability to quickly fulfill orders. Our team of approximately 100 dedicated associates throughout the country is invested in our customers’ successes. We collaborate with our customers to tailor strategies to best meet their and their customers’ needs.
Corey Lowsky: United Pipe has 12 strategically located Distribution Centers nationwide, 60 flatbed trucks and trailers, and close to 250 employees who strive to safely serve independent wholesalers with a broad array of steel pipe, copper tube and coils, PVC pipe, strut, threaded rod and electrical conduit.
We offer wholesalers the opportunity to minimize the impact of volatile commodity pipe pricing while acting as a one-stop-pipe-shop for purchasing, helping to improve their turns, cash flow and operational efficiency with our reliable and on-time services.
TW: What are the most significant challenges and concerns facing your sector this year, and what are your strategies for addressing them?
LF: Ten years ago, we transitioned into a second generation of leadership, and the company has grown stronger each year. Our investment in and education of our less-seasoned team members remains our biggest challenge. The amount of knowledge and passion our veterans possess is unmatched in the industry. Having more than three decades of experience, they are the best in the business and have developed multi-generational relationships with our fan base.
Our newer team members are working hard, and we are putting a tremendous amount of effort into creating the next generation of genius problem-solvers. Our fan base knows it is faster to call us for an answer than to Google it. Putting that information into their repertoire of tools takes a commitment in time and energy. We have the best team in terms of character and drive, and in a fast-changing industry, there is so much more to learn than a few decades ago.
Our technology investments will help speed up that time frame and we expect our newer members to be with us for decades to come.
MR: The housing shortage presents a significant challenge, with millions of housing units needed across the United States. This scarcity has sparked a shift in focus from new construction to renovation and repair, encouraging innovative thinking and adaptation.
As homeowners increasingly opt to enhance their current properties, we have strategically collaborated with our vendors and reseller partners to meet the rising demand for repair and remodel projects. This situation propelled us to broaden our catalog offering and incorporate adjacent brands and categories.
No matter the challenge, our team is unwavering in its commitment to develop solutions fostering growth and prioritizing customer satisfaction.
CL: Market uncertainty regarding demand across the country as interest rates have softened has put downward pressure on the need for new residential construction and the repair and remodeling of existing homes. Also, there’s the continued consolidation of customers, suppliers, buying groups and other vital elements in the distribution channel.
As a result, we pivot to focus on other wholesale distribution segments such as PVF, HVAC, electrical and waterworks while broadening our product offering (with seamless pipe, for example) to continue to be the pipe supplier of choice nationwide.
TW: How are recent global supply chain challenges affecting your operations? What strategies have been most effective in overcoming these obstacles?
LF: Supply chain challenges were never a big concern for us. We have always operated our business under the premise that a master distributor must have all the answers and that includes maintaining the highest inventory levels.
A customer recently commented that we are a mini Amazon meets Google. We perfected our ordering needs to maintain inventory levels that meet our various customers’ needs. Having no order minimums, we can solve immediate inventory needs and help our wholesalers win business. The ability to provide competitive pricing for very large quotes and send those items out the same day enables our wholesale customers to be successful.
MR: Recent global supply chain challenges — including fluctuations in commodity prices, regulatory changes and transportation bottlenecks — have necessitated a strategic response from our company. As a key distributor, we maintain a strong connection with our vendors and reseller partners to ensure we receive real-time updates, allowing us to quickly adapt to cost adjustments and regulatory changes, as well as communicate with our customers.
Our supply chain team diligently monitors these developments and adjusts ordering behavior accordingly. Although these global constraints affect us, our extensive inventory allows us to mitigate their impact significantly. By staying proactive and responsive, we continue to manage these challenges effectively, ensuring stability for our consumers and reseller partners.
CL: There has been a lot of news recently regarding fighting in the Middle East, the war in Ukraine and ongoing issues in the Suez Canal — and all impact the global supply chain of pipe products. We continue to diversify our supplier base to ensure a steady flow of material while working with our existing suppliers to assist them in planning and coordinating their manufacturing process.
We believe that strong communication and continued partnership with the goal of all parties enjoying success are keys to overcoming any challenges.
TW: With sustainability becoming an increasing concern for consumers and businesses, how is your company adapting to this trend, particularly regarding eco-friendly products and practices?
MR: Sustainability has been a central focus for years at The Stock Market. We actively promote sustainable products and solutions to our customers. Additionally, we improved our packaging solutions to enhance efficiency and reduce the amount of waste.
Our distribution centers participate in recycling initiatives, including the reuse of pallets, corrugated cardboard, shrink wrap and plastic bonding. We’ve successfully reduced our Scope 1 and 2 carbon emissions and are progressively expanding our use of renewable energy throughout our operations.
CL: Innovation in the pipe products we carry hasn’t changed dramatically in 100-plus years, but it doesn’t mean we aren’t focused on being a good supplier, customer and neighbor in our communities. We focus on recycling the limited amount of damaged or scrap material we handle throughout the year, purchasing material from best-in-class manufacturers and supporting their sustainability endeavors.
We continue to invest in and consistently update our fleet of trucks to run the most fuel-efficient vehicles while also developing our transportation management system (TMS), which allows us to run the shortest routes possible to serve customers quickly and with the least environmental impact.
TW: What technological innovations have you incorporated into your business model in recent years? How have they revolutionized your approach to distribution and customer service?
LF: Understanding that new technology sometimes can slow you down, we’ve been careful where we invest our time and money. This year, we invested heavily in modules that will allow us to be more efficient and for our customers to seamlessly use our inventory and knowledge for their immediate benefit. Our new web platform will provide all the tools and information to help our wholesale customers.
MR: Our technological innovations have all centered around enhancing our customer’s experience. Our distribution centers include integrated robotics to improve the speed and efficiency of picking product on certain items. Additionally, we implemented a more streamlined and automated process for managing customer returns. Our investment in sustainable and effective packaging solutions aims to minimize damage rates.
Furthermore, we are expanding our capabilities in enterprise resource planning and system integrations to facilitate new, unique partnerships and opportunities. We want to deliver solutions and processes that are seamless for our customers and drive growth.
CL: We use a TMS system to help optimize our truck routing, along with an extensive safety program that ensures all team members operate in a safe and controlled environment in our warehouses and offices.
This year, we implemented a customer relationship management tool for our sales team to use when engaging customers. It allows us to keep better track of opportunities in the pipeline so that we work in tandem with our customers to ensure they have the proper inventory on hand for their stock replenishment, and to secure job work that can be delivered throughout our national distribution network.
TW: Are there new trends yousee this year?
LF: In the distribution world, we see a trend amongst our fan base that buying direct is not a necessity anymore. Many manufactures also realize that a lot of savings and efficiencies rely on master distributors to help create and maintain market share. What we do best is help all types of customers, whether large multi-branch companies or small independent wholesalers, obtain the best and fastest service to meet their needs.
On the product side, we see a movement to more efficient heating methods, such as heat pump systems and electric boilers. We continue to invest in our education in these areas so we can pass that knowledge on to our customers.
MR: This year, we’ve observed several emerging trends that reflect evolving market conditions and consumer preferences. One notable shift is toward lower-cost items in certain markets, likely driven by economic factors. Additionally, there’s a growing inclination among homeowners to remodel their current home instead of buying a new home.
On the product side, we’ve observed an increase in IoT/smart home products as that technology has advanced. There has also been more of an emphasis on ADA-compliant products, aligning with the trend of more homeowners aging in place. These trends underscore our adaptability and commitment to meeting diverse consumer needs.
CL: I don’t know if you can call it a trend, but in 2023, United Pipe opened three new state-of-the-art distribution centers in Houston; Belvidere, Ill.; and Seymour, Ind.
We continue expanding our footprint to store more products and create an environment where our team members can work safely and comfortably in modern facilities.
