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American Supply Association (ASA) members — 850 in total — gathered in Chicago from November 13th to 15th for the PHCP-PVF supply chain’s largest annual event, ASA NETWORK2024. The program was stacked with valuable speakers, panel discussions, roundtables and networking opportunities. For the 15th year in a row, Supply House Times hosted its exclusive distributor roundtable to gather a “state of distribution” as one year closes and supply houses prepare for the next. This year’s conversation was heavy on AI, data and technology integration, along with the implications of a never-ending stream of mergers and acquisitions. The 2025 ASA-Supply House Times roundtable participants were:

• Paul Andruszkiewicz, president, The Collins Companies
• Bryce Moore, director of finance, Hirsch Pipe & Supply
• Drew Roberts, CEO, ProSource Supply
• Nathan Wachtel, president & COO, Masters' Supply

One question that always gets the conversation started is, “As a distributor, what keeps you up at night?” Oftentimes this is where hurdles like hiring and competing with Amazon and other big box retail enter the chat.

Andruszkiewicz kicked off the conversation noting that replacing aging talent is a top concern that could make him lose some sleep. “The Collins Companies has 105 employees and about 40% of those are 60 and older,” he said. “Getting people to choose our instead of working at Google or Apple is an ongoing challenge. Once you’re in, of if you have family that’s in, you know just how great the people and opportunities are, but amplifying that message to the outside is what we need to do.”

ProSource’s Roberts agreed, adding that heavy focus is often put on the labor shortage within the trades, but the distribution side is suffering as well. “We’re no better off than the trades when it comes to attracting new talent into the pool,” he said. “If we don’t figure out how to get talented, quality people into our system, the Googles of the world will.”

Roberts added that it takes a massive reset to equalize the labor market. “I saw during 2008 when the world crashed; it seemed like there was a big correction where all of a sudden people that wanted to work at Apple and Google were willing to work in a warehouse. And none of us want to see a crash or reset like that.”

The distributors agreed that company loyalty is a concern as well, as the days of working decades at one business seem to be long gone.

“Once you get them, you’ve got to do more than ever to keep them,” Andruszkiewicz said. “The younger generation changes jobs every five years and it’s normal to them.”

Hirsch Pipe & Supply’s Moore jumped in to point out the economic incentive talented candidates have to move from one role to the other more frequently. “Someone can make the move and level up to make more money when the company they’re at didn't have an opportunity to promote or increase wages as quickly as other companies,” he said. “So there is a true economic incentive and it is tough for us as a distributor to keep raising wages to compete.”

Shifting the conversation a bit, Masters’ Supply’s Wachtel said what keeps him up at night is a “scarcity mindset."

“There is the philosophy that ‘a farmer's work is never done’ and a farmer's never really anxious; they know the work's going to be there for the next day. So, what keeps me up at night is that I'm not a farmer,” he said. “I sometimes see capacities and resources with the lens of scarcity instead of abundance. I am concerned about the projects we have ongoing and whether or not we have enough support to accomplish them. It's kind of a personnel thing, but it's also the firepower analysis — do we have enough bandwidth to be able to complete what we need to in order to stay competitive?”

Protecting core product

While many distributors may cite Amazon as a conglomerate that keeps them up at night, Roberts disagrees.

“The reason Amazon doesn’t keep me up at night is because I think we as independent distributors will continue to deliver the final mile better than they can. We deliver expertise and service that Amazon, Home Depot and others cannot match,” he explained. “But we have to continue to protect our core product, because there is product that Amazon can and will deliver quicker and cheaper than we can.”

While participants around the table agreed that a distributor’s edge is largely the final mile of service, they pointed out that this isn’t stopping manufacturers from going direct to consumer and/or selling product via big box, infringing on the wholesale-distribution business model.

Moore pointed out that manufacturers opening up to many distributors in one territory continues to drive down margin. “Today a lot of us carry the same brands, whereas years ago that wasn’t the case,” he said. “So now we are competing on price and service; you’re lowering your product margin or you're raising operational costs to offer additional services.”

These distributors agree that the number of manufacturers selling direct is on the rise, especially in the e-Commerce space. They agreed that alignment among distributors is key to fighting this battle.

“Any one of us cutting off a manufacturer for going direct is not that big of a deal, but all of us cutting them off sends a message,” Roberts explained.

Distributors are getting creative to add value to customers and deliver that “final mile.” Wachtel said Masters Supply is getting into light manufacturing of products like hydraulic hoses and special things for factories or machinery. “We also offer emergency after hours pick up in some cases.”

Andruszkiewicz explained that The Collins Companies acquired a valve repair business seven years ago so his salesforce is able to offer safety relief valve repair services throughout the Northeast.

Moore pointed to services like tool rentals and trash dumping that Masters Supply offers which are simple, but very valuable to the contractor. “Some manufacturers sell bundled copper jars while some don’t, so we actually started creating our own copper bundle jars and selling them which has been valuable,” Moore added. “In 2025 I’m excited to start offering more training and education services.”

Leveraging technology

Integrating technology into business is a nonnegotiable into today’s marketplace. When it comes to the PHCP-PVF supply chain, Moore said it is all about leveraging technology to improve the customer relationship.

“One way we are doing this at Hirsch is by emailing out key customer insights from our analytics team to our sales team,” he said. “It shows buying trends and gathers contact info so the sales team can easily follow up. I’d like to see this data as part of our ERP process to seamlessly use technology to boost both sales and the customer experience.”

As the PHCP-PVF supply chain witnesses a generational shift, it can be difficult for distributors to know the perfect way to offer technology to customers.

“As the younger generation takes over in their parents’ businesses, we go from using almost no technology communication to all technology,” Roberts said. “So it’s a constant balancing act where we just have to meet each individual customer where they are at.”

The distributors agreed that when it comes to technology adoption, you’re only as good as your data, and data integration is a major pain point for many supply houses. “Picking and packing is one of the greatest points of failure is many warehouses,” Roberts said. “Whichever distributors can leverage technology, robotics and automation to streamline picking and packing will succeed.”

Wachtel shared that Masters Supply invested in a distribution center in 2019 that utilizes wireless warehouse technology. “It is a huge capital investment, but the benefits have been great for us,” he said. “We can hire someone new and within hours they are set up, ready and able to pick and pack orders and the system automatically identifies errors.”

The supply house of the future

Looking ahead, a concern these distributors agreed on is the amount of independent distributors being acquired by nationals or private equity groups.

Roberts pointed out that independents like the companies around the table have to make it known that they have skin in the M&A game as well. “We when are seeking acquisitions we are reminding these companies that they don’t have to sell to the large nationals,” he said. “We value their business and their people, and we want to keep independents thriving.”

The distributors agreed that there is “good” private equity and “bad” private equity, and it will be interesting to see how the next 15-20 years play out as these firms gain more market share.

Wachtel added that private equity in frequently purchasing distributor’s customers as well. “There are blessings and curses with investment firms acquiring our customers,” he explained. “It's helped us force the hands of some companies that do business with us while others who are out of our market begin making decisions that negatively affect the relationships we've built.”

The group said private equity is buying up service and repair contractors nationwide and the trend is moving toward gathering new construction companies as well.

Although a volatile merger and acquisition market is inevitable, distributors are mostly optimistic about their ability to thrive for decades to come — as long as constant evolution and technical expertise are top priorities.

“As distributors we must rely on the technical expertise and service that always has and always will differentiate us,” Andruszkiewicz said. “We can’t just be a part number that everyone can find on Google — we have to be the experts that customers can rely on to solve unique and complicated problems.”

Wachtel agreed, adding that it’s all about being a few steps ahead of your customer. “We try to stay ahead of our customers’ needs rather than reactive to them,” he said. “Defining their needs is an ongoing challenge, so it’s vital to stay strategic and analytical about what works and what can work in the future as customer needs evolve.”

Meeting customer needs isn’t enough; being the most efficient at doing so is how the distributors of the future will thrive, according to Moore. “It comes down to convenience. Distributors today have to be the easiest and fastest to do business with. As long as our customers can get the information and product they need quickly and efficiently, they will chose to do business with us,” he said.

Bringing the focus back to internal operations, Andruszkiewicz emphasized the importance of company culture for a prosperous future.

“Culture is vital for long-term success. We host seminars that lay out the fundamentals of our culture,” he said. “The wholesalers that make it into the future will be the once that thrive off of a healthy, unified culture.”

When asked about the state of distribution today, this group used this handful of words to describe their feelings: Bright, endangered, proud and opportunistic.

While there is ample opportunity to gain market share and an exciting future ahead for the PHCP-PVF industry, Moore elaborated that “endangered” is his word to describe the independent distributor because there are so many entities working against them.

“Our business is getting picked away little by little. If we lose enough of that share, you hit a tipping point where you have to have enough. Our business is pretty high in operating leverages, so if you get a lot more sales, you don't have more profit. But, if you hit this point where you don't have enough sales to sustain your operating base, then your business becomes unsustainable.”

While Moore’s points were echoed around the table, the group agreed that there is plenty to be optimistic about. “What we do matters,” Wachtel said. “I agree that there are things coming at us from every angle to take market share, but I have to remain confident that we still have great opportunities ahead of us.”

Resonating with Wachtel’s optimism, Roberts simply says that PHCP-PVF distributors are fortunate to be in the business they are in. “We deal with the health of our nation and its infrastructure,” he said. “We’re involved with the building of America, and that’s never going to go away. So we are all fortunate that we got into this industry, and as long as we evolve, we can continue to grow.

“The supply house of the future is going to be the one who evolves. We can’t be stuck in our ways; we have to make an evolution if we’re going to make it into the next century.”