Mike Miazga 2016-03-04 05:04:09
An unwavering commitment to its members and vendors is a continuous theme as Embassy Group celebrates its 25th anniversary. Maureen Cosyns has seen it all — except for the first six months. Cosyns, the jack-of-all-trades executive vice president of Geneva, Ill.-based Embassy Group, joined the PHCP buying group in January, 1992, midway through its first year. “My husband (Steve Cosyns, a fixture at Embassy events) knew Wally Gumm (retired Embassy president) and introduced us,” she says. “Wally was looking for someone to help administratively and told me he couldn’t pay much, there weren’t any benefits and he wasn’t sure where the company would go. He then asked if I still was interested.” She was and has been front and center as the buying group has evolved over the last 25 years. Thanks to a lean business model that focuses squarely on helping members and group vendors increase market share and profitability, Embassy continues to prosper as a now 71-distributor and 106-vendor member cooperative with group total sales totaling $6.5 billion annually. Embassy, a member-owned group, is celebrating its 25th anniversary this year with a spring gala in Phoenix and its summer shareholders meeting in Colorado Springs, Colo. HOW IT ALL STARTED Beaumont, Texas-based Coburn Supply is one of eight original Embassy members still active in the group. As Coburn President Don Maloney explains, Embassy’s beginnings can be traced back to an idea of John Vogt, then of International Supply in the Dallas/Longview area of Texas. “John’s idea of a small group of similar-size members, limiting the number of overlapping vendors and each member paying their own accounts resonated with the small group of companies he had contacted,” Maloney says. “John Martin with Anvil contacted John Vogt about the availability of Wally Gumm, who was a former executive in another buying group.” Maloney adds the small group of distributors agreed to underwrite the hiring of Gumm as executive manager. “And with that foundation of companies along with Wally in place, the group began soliciting new companies and vendors,” he says. Organizational meetings were held near O’Hare Airport in Chicago at an Embassy Suites hotel, thus how the name of the buying group came to be. THE DRIVING FORCES OF TODAY After Gumm’s retirement in 2012, Embassy hired industry veteran Mike Lepley as the group’s new president. Lepley, who came to Embassy with extensive experience on the vendor side, says the continued success of the cooperative traces back to its business model. “The biggest reasons behind our success are the consistency, transparency and pure commitment by our membership and vendors to embrace the model,” says Lepley, now in his fourth year at the helm. Embassy’s overhead is kept to a minimum, notes Lepley, who along with Cosyns and Shari Kelly, the group’s program administrator, run the administrative side. “It’s a very lean structure,” says Lepley who adds the group could not function at the level it does without the yeoman’s work done by Cosyns and Kelly. “We have $6.5 billion in total sales and three people who manage it. Technology has allowed us to keep overhead down and make sure more of the vendor-member earnings are going back to where they really belong — to our shareholders. We spend their money as if it were our money.” Scott Robertson, president of shareholder Robertson Heating Supply, says the membership benefits from that home-office setup. “We get 99.95 percent of rebates returned to us in an industry where we are challenged to be lean ourselves,” he says. “We work within an organization that is extremely lean and we enjoy that.” Dan Patrick, president and CEO of shareholder Todd Pipe and supply adds, "mike and this staff focus on the members’ needs.” In recent years, Embassy has expanded its focus with HVAC and waterworks verticals. “Embassy continues to grow outside the traditional plumbing sector into other areas that have attracted new companies to join the group,” says Jeff Worly, president and COO of shareholder Worly Plumbing Supply. Jeff Peterson, secretary and treasurer of shareholder Penco Corp., adds, “This growth in HVAC and waterworks shows Embassy is a progressive group of wholesalers that realize complacency isn’t an option in today’s business environment.” A TRUE PARTNERSHIP Lepley stresses Embassy will never stray away from its long-standing principles of limiting territorial overlap of shareholders and oversaturation of product categories on the vendor side. “This is not a one-sided organization,” he says. “It’s truly about getting the best vendors and matching them up with our membership. We put as much attention into our vendors as we do our shareholders.” Scott Morris, senior vice president of inventory and purchasing at The Granite Group, an Embassy shareholder, said the member-vendor dynamic is a game-changer. “The blend of strong independent distributors led by active, committed ownership that partners with select manufacturers to drive business that benefits both parties is Embassy’s secret sauce,” he says. Noritz Senior Marketing and Customer Care Manager Jason Fleming adds: “The most impressive component of Embassy is its support of the independent wholesaler. They are truly dedicated to the relationship of their vendor partners and the wholesale members.” Webstone Valves National Sales Manager Larry Waldron appreciates the care Embassy puts into assembling its vendor roster. “Embassy is selective with the vendor list,” he says. “Simply put, when you are an Embassy vendor their members make every possible effort to buy from your company. Undoubtedly this is one of the reasons why we continue to enjoy year-over-year double-digit growth from the members of this organization.” During Embassy’s spring meeting shareholders must meet with all member vendors during the tabletop sessions — a practice met with widespread approval. “Embassy gives us the opportunity to grow our business,” SFA Sanifl o CEO Regis Saragosti says. “During the meetings we see every one of their members and we almost always have the owner or president at the table. I love it.” Milwaukee Valve Vice President of Sales and Marketing Tom LaGuardia sees the spring meeting sessions as ways to connect with current as well as prospective customers. “We have benefitted from a long and profitable relationship with many Embassy members due in part to the somewhat unusual nature of the annual meeting,” he says. “We often find ourselves visiting with members who are not necessarily our customers. We enjoy the opportunity to address whatever issues we may mutually have in the market and because of that have developed many opportunities with Embassy members.” Matco-Norca Vice President of Sales Scott Bardreau says Embassy shareholders’ continual openness to new ideas benefits both sides of the table. “Embassy members have allowed us to present strategies designed to maximize Matco-Norca’s global sourcing expertise. As a result, both companies are performing well today. Embassy has a clear vision of market direction.” Fluidmaster President Todd Talbot praises Embassy for helping take his company to the next level. “As you would expect from a good customer, their vendor group challenged us,” he says. “And while at times it was not easy, there always were rational thoughts that in the end made us a better manufacturer.” WHAT WILL TOMORROW BRING? Growth, according to Lepley, is on the horizon for Embassy, but not at the expense of the current harmony the group enjoys. “We’ll look to add membership to all three verticals (plumbing, HVAC and waterworks),” he says. “The biggest misconception is Embassy is good size-wise. We are looking to grow, but it has to be the right distributors in the right markets — smart growth.” And growth over the years, as Sam Williams Jr., of Embassy original shareholder Gateway Supply tells it, has produced a coast-to-coast lineup that has spawned invaluable networking and best practices sharing opportunities, as well as many long-lasting friendships. “It’s a great group of men and women who are serious about their businesses and care about what happens in Embassy,” he says. Maloney adds: “Although strong egos do exist in the Embassy Group, we work very well together in the best interests of the group. ‘United for Strength, Independent to Serve’ states it best.” Embassy Originals Original active shareholders: Cleveland Plumbing Supply, Coburn Supply, Gateway Supply, Plumbers Supply Co., Supply New England, TORRCO, Wilkinson Supply Original active vendors: Anvil, Bemis, BrassCraft, Charlotte Pipe, Elkay, Elkhart Products, NIBCO, OateySCS, Watts Water, Zoeller.
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