Imagine that you're a contractor and you get a call from the president of your HVACR wholesaler distributor inviting you for a day of fishing or a round of golf. You didn't win a contest, and he's not trying to sell you anything; it's just an opportunity to spend a few hours together. Now that's taking personal service to a whole different level.
This is the way that Spokane, WA-based Blacks Wholesale Distributing Inc. has operated since it first opened its doors in 1938. Blacks' employees know their customers, treat them as friends and do whatever it takes to help them succeed in their business. Even as Blacks has grown from its 4,500-square-foot facility in Spokane to a 45,000-square-foot location there and five branches in Washington and Montana, it has remained the distributor where contractors can feel at home.
James "Rolly" Johnson is president of Blacks - the third-generation owner of the business. Blacks Wholesale is named for its founder, Charlie Black, who started the business as a service station repair shop. In 1949, Bert Johnson, Rolly's grandfather, joined Charlie and became a partner. Charlie Black passed away shortly thereafter, leaving the business to Bert Johnson. Rolly's father, Jim, took over the business at age 18 when Bert, too, suddenly passed away.
Rolly officially began working at Blacks in 1982, the year he graduated from high school and began earning his associate's degree in management. While his father was thrust into the business because of the death of his father, Rolly enjoyed all aspects of the work - even when he was sweeping the floor or stocking shelves. "I really liked the customer side of things," he recalls. "You'd see the same customers every day, and they became more than customers, they became friends. That was really appealing to me." After working his way up in the business, he became president and majority shareholder in 1994.
When Johnson became president, Blacks had two locations in Washington and one in Montana. Since then, he's expanded the business to six locations, adding two branches in Montana and one in Washington. The branches also serve parts of northern Idaho and northeastern Oregon. Johnson says the business has expanded because there were opportunities in each of those areas to serve customers. "We saw a need for distribution in those areas," he says. Most competitors, he notes, are either small distributors or a larger distributor some distance away trying to serve the market with deliveries. Going into markets with little competition proved to be fortuitous for the business, making them the dominant players in these smaller markets.
Of course, doing business in the Northwest presents many challenges as well. "We've got all these miles in between," Johnson says. "It might be 200 miles to make one sales call and then drive another 200 miles. That's very unique." Such vast distances drive up Johnson's costs.
Given the size of Blacks' market area, there's great diversity in its product line. "That forces us to carry just about everything that Ruud has," Johnson says. The Spokane headquarters remains the central warehouse, but Johnson says they try to direct-ship as much product as possible from the vendors to keep costs down. Still, Johnson says, they "haul a good majority" of products themselves to the branches.
Branches are small, with each location having two to five employees. In the smaller branches, the branch manager does double duty as the sales manager, which Johnson says is an effective way to operate. "The branch manager is a jack-of-all-trades and knows a little bit about everything," Johnson says.
The Spokane headquarters has specialists who, in turn, help the branches with product questions or service issues. “It happens all the time,” he says. "When they run into a problem, they'll call us for advice." In some cases, the specialists travel to the branches, whether it's for a sales call or a technical issue.
While there is little competition at Blacks' smaller branches, there are plenty of HVACR wholesale distributors in Spokane. Still, Johnson is quick to point to the fact that Blacks is the only locally owned wholesaler in the city [Editor’s note: Larry and Willis Brown, father and son, purchased Johnstone Supply from Bill Nock in 1974. Larry stills owns the Spokane branch of this national distributor for HVACR parts and equipment. Johnstone Supply across the nation are locally owned and operated]. "I can remember back when I was growing up, every distributor that we competed with was a locally owned wholesaler. Since then, things have changed," he says. "Now, they are fairly large regional or national businesses here."
Blacks promotes its local roots in its marketing. "I still believe there's room for the small guy in the market," he says. In fact, Blacks uses a teddy bear with a "we care" sign around its neck as its mascot. Small is beautiful, Johnson tells his customers. "We're the small guy, but we can react just as fast and we can provide the little extra personal touches that our competitors just can't."
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The fishing and hunting trips that Johnson and his dad will take customers on is an important differentiator. Johnson also makes it a point to visit Blacks' top 25 customers at least once a year. ("It's usually multiple times," he notes.) That's easier said than done when you're talking about customers spread out over 800 square miles. While Johnson has made this a regular practice, he says customers are still surprised and honored that the president takes the time to meet with them. Larger customers also have a direct line to Johnson.
While these personal touches are part of Blacks' DNA, they mean more in today's competitive environment. Johnson notes that there will always be a supply house or store that can sell a product cheaper. "So what do we have to offer? Service. That personal touch. Not everybody wants to buy from a big national chain. When they walk through the door, we know everybody's name. That's what we hang our hat on."
The teddy bear is more than just part of Blacks' logo - it also has become an important part of the company's marketing efforts. Blacks will send the bear to customers, donate it for raffles or use it in lieu of flowers. The bear is such a strong link to Blacks that the HVACR industry, as well as many businesspeople in local communities, recognize the bear when they see it.
Teddy bears and visits by the president, of course, are good for business, but it remains hard to compete with the national supply houses and big-box retailers. Recognizing that the locally owned distributors would always face an uphill battle, Johnson and three other distributors put their heads together at the 1996 HARDI meeting to develop a plan.
"We were all independent and small and we decided that we needed some sort of an alliance or a way to compete with the big guys," Johnson recalls. What they came up with in a hotel suite was the Independent Wholesalers Alliance (IWA). "It was more like a support group of best practice sharing. That was the goal when the four of us first sat down."
What they quickly discovered was that there were more - many more - distributors like them. "We grew really fast," he says. The following year, when Johnson wore his IWA shirt at a HARDI meeting, he had members asking if they, too, could join. The IWA grew into a buying group and became a much larger entity than any of them could have imagined. Johnson served as president of the IWA from 2000 to 2002. "I spent as much time on the IWA as on Blacks," he says.
A year later, a majority of the IWA members voted to join the Blue Hawk buying group. That group was the best fit for IWA members, which numbered about 25 businesses at the time. In the end, all but two IWA members became members of Blue Hawk.
Blue Hawk has given Blacks "the best of both worlds," Johnson notes. The independent businesses within Blue Hawk compare notes and regularly share best practices, but they also reap the benefits of enhanced purchasing power. "This has been, by far, the best thing that we've done to remain competitive with the big guys and the chains," he adds about Blacks' association with Blue Hawk.
In addition to the purchasing power and best practices, Blacks relies on Blue Hawk for training. "Training has become one of those tools that we need to compete in today's market," he says. Johnson continues to send employees to regional training sessions sponsored by vendors as well. Given how far the branches are spread out, "it's just about out of the question” to bring together all of Blacks' employees for training sessions.
HARDI has remained an important source of information for Blacks as well. Johnson, who has served as a trustee on several HARDI committees, says he continues to learn "a ton" at every meeting - whether it's a regional event or the national conference. To him, it's about gaining nuggets of knowledge in unexpected places. "Sometimes the best information comes from who you sat with at dinner."
HARDI's presentations and training sessions also have helped smaller distributors like Blacks learn to do more with less - especially important during the recent economic downturn. Johnson notes that technology has helped them adapt - where it used to take eight to 10 people to manage an office, it now requires only two. "HARDI has helped keep us up to speed on what's going on in the industry."
But you'll never have to tell Johnson or his employees about what's going on with their customers. Their stores have bulletin boards where customers post photos of their kids' first deer or a 12-point buck that they bagged on their last hunting trip. In Johnson's office are mounts of fish and game that he has caught. This is more about sharing a love of the outdoors. At Blacks, they share the values of their customers, and there's nothing better for business than that.
Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].