Interview With SWA's New President Bob Christiansen
After a quarter-century and hundreds of interviews with industry citizens, I can count on one hand the number of times I didn't find the session enjoyable. It takes an extremely foul or dull personality to bum me out. But some interviews are more fun than others, and I can count on the other hand the number of times I've walked away from one wishing I had more time to spend just shooting the breeze with the subject.
This was one such time. Bob Christiansen, this year's incoming president of the Southern Wholesalers Association, is one of those effervescent individuals with a knack for putting people in a good mood. Only 42, he looks even younger, and carries an infectious enthusiasm that makes problems seem a little smaller.
His company, Chris-More Inc., headquartered in Memphis, Tenn., with a branch in Nashville, was started in 1972 by his father, Bill Christiansen, and partner Doug Morehead. In 1983, Darryl Skipper bought Morehead's share of the business and has been Bill's ally ever since. Bill is still active in the business overseeing the big picture, but lives in Birmingham and delegates day-to-day management to Darryl, the branch managers and sons Bob and Bill Jr., the latter serving as operations manager of the Nashville facility.
With Bob ascending to the SWA presidency, the Christiansens become one of only a handful of father-son combos to lead PHCP trade associations. Bill Christiansen held the reins of SWA in 1982-83.
Bob Christiansen and his wife, Carol, have five children between infancy and nine years old. He came to work for the company in 1982 after graduating from the University of Alabama with a degree spanning public relations, business and sales. He took a "sabbatical" during the late 1980s to work in commercial real estate in his native Birmingham, but returned after a year and a half. "I did okay in real estate," he says, "but there's something about this industry and its ongoing relationships that pulled me back."
The interview begins.
Supply House Times: What do you like about this business, and what strengths do you bring to it as a manager?
Christiansen: I like the people in the industry. I grew up in it and have been attending SWA meetings ever since sixth or seventh grade. I made friends back then who now run other supply houses, work as reps or hold other positions in the industry. I used to play with the sons of some customers Dad used to do business with, and now I'm doing business with those sons.
As for my management style, I'm not one to stand over people and crack a whip. Our employees have a lot of leeway. They understand the general model of our company, which is to jump through hoops for customers.
We have the best group of people we've ever had. In key positions, we just don't have turnover. The chains and other supply houses are always talking to our people, but they never leave. Here, they have a lot of say over how to get the work done without constant home office interference or threats. I know it sounds like a clich?but we truly are like a family around here. I'd trust my five kids with anyone working here.
Supply House Times: What are the biggest problems you face in business day-to-day?
Christiansen: The biggest challenge is maintaining margins. Wholesaling gets tougher and tougher, because the big guys will always have certain advantages. If I tried to go head-to-head against the chains on price, they could run me out of business. But I can out-service them and outdo them in business in general.
Supply House Times: Allow me to play devil's advocate. Independent wholesalers always say they can out-service the big guys, but how can that be when the big firms have so many more resources? What can you do better than them?
Christiansen: We don't have a salesman who's been in the industry less than 10 years. Frank House Sr. has been with us ever since day one; Thomas Boyd worked his way up from truck driver and has been here 30 years; Don Edwards was a manager at Westburne and has been with us 12 years; Frank House Jr. was with a rep agency for years and with us 15-plus years; and Jeff Wiggins has been with us for over 14 years. The same holds true for our Nashville branch. Jesse Hudiburg, Jim Duerr, Dwight Ethridge and Tye Waldon bring a world of experience to the table.
Bob Stewart is beyond retirement age, but he takes care of three accounts for us. The reason is, he feels an obligation to those companies. He knows what they want, when they want it and how they want it.
These guys have grown up with some of our customers, from the time many opened the company through passing it down to their sons. When a new salesman or manager comes into a chain branch every few years, these kinds of relationships just don't have time to develop. We sell on friendship. We pull them into the fold and don't let them out.
Supply House Times: What's friendship worth - will they pay 3%, 5%, 10% more? They'll still shop the big guys, won't they?
Christiansen: Yes, they do, but they always come back. Friendship may not get you much more money, but it will get you the order. On orders where the customer is deadlined and simply has to have the product, if we can meet price, we'll get it. Also, most change orders negotiated with a decent price will be brought to us.
Contractors are always complaining about credits and mis-billings from other supply houses. Our credits and billings are almost always right, because our guys are doing business with people they regard as brothers.
Business has changed. In the old days we'd get a week to put together $5,000-$10,000 worth of inventory for a customer's warehouse. There are fewer and fewer contractors who buy like that. Now they come to our warehouse every morning and pick up what they need for that day's work. And they'll overbuy, because if they think they'll need five on the job, they'll buy six or seven just to make sure, and maybe find out they only need four. Then at the end of the day or next morning they'll bring back the extra material. They depend on that credit coming through to offset new invoices going out. They know they'll get treated right by us.
Contractors today don't have time to dilly-dally getting a stock order together, because general contractors are putting more pressure on them to get in and out. A lot of times GCs don't get jobs until the last minute, then say we want you to start tomorrow. We are able and willing to jump through those hoops with them. That's our competitive edge.
We stock stuff we sell only once or twice a year. Our turn rates are low compared with the rest of the industry, but the customer satisfaction rate is high. I stock 23 to 25 commercial water heaters at a time, where the chains can't do that. If a customer tells me he needs 100 tubs for an apartment job right away, I can supply them, whereas the chains make him wait a couple of days. When customers can't fill an order with other supply houses in town, we pick up the spillover business.
If we want to try new product, we can put in 50 or 60 Gs worth of stock without getting in trouble with a home office. A good example is Viega's Pro-Press fittings, which we're pioneering with a lot of customers and has turned out to be a pretty good line. We can do that, whereas some of the chains penalize branches for having inventory levels over a certain amount.
We also do a tremendous amount of counter business and stock parts even for lines we don't carry. So even though we're an Eljer distributor, we stock a lot of American Standard parts, Kohler handles and stems, along with Sloan, Delta, Chicago Faucet and so on. A big chain wouldn't be able to do that.
Supply House Times: I take it you sell only to the trade?
Christiansen: We're a traditional supply house - no retail. We sell some builders with permission from the plumber, but it's always a joint effort. Some plumbers only want to buy the rough-in and top-out and prefer that we sell the builders the fixtures. However, most plumbers in this market want to buy what they install, and we work with them whichever way they prefer.
Supply House Times: Can a company your size survive indefinitely?
Christiansen: Not only survive, we can thrive. I love the position we're in. I want to grow a little bigger, but also be agile enough to make a decision on a dime and run with it. That's part of being an entrepreneur.
The consolidation deluge has slowed down in the last few years, but in its heyday we were getting calls monthly from four or five companies wanting to buy our business. But we have no reason to sell, and we're not going to sell the business out from under our employees without knowing they'll be kept. The main reason Dad's never entertained offers is our people.
One of the biggest concerns I have is how can I continue to grow to create opportunity for our people. Most of my staff don't want to manage a business, but a few maybe do want that opportunity. So I need to figure out a way to open some satellites or a branch in a new city or lose them. That's the only drawback to a small firm.
The way I see it, there are three reasons why wholesalers our size will continue: One, buying groups are a great equalizer in pricing. We belong to Embassy, and it's a great organization. Of course, the chains will get even better prices stocking goods into their central distribution centers, but they also have extra costs sending it out.
Second, the Internet and other information technology is another equalizer. Information travels just as fast to small company computers as to the chains'.
Third, small wholesalers can react better to changes in the economy. If you manage your receivables and inventory, you can make it through any economy, whereas the big guys can't react so quickly to sudden changes.
Supply House Times: What's the most profound change in wholesaling since you started?
Christiansen: The speed of business. People expect you to solve problems in an instant. In the old days, if something broke you would send it to the manufacturer and wait for a replacement. Now, customers want a replacement the same day.
Information technology has led to great changes. Our customers expect us to provide information quicker. We do submittals nowadays in 30 to 45 minutes - and on big jobs - whereas it used to take days to pull the information together. Fortunately, we have that capability.
Another change is that I really don't know who my competition is anymore. Oh, I know who the other wholesalers are, but you can get showerheads from Walgreens, and Wal-Mart and Kroger carry plumbing lines. The availability is amazing, and a lot of it comes from companies I've never heard of.
Everyone has material, but they can't service you, not even Home Depot. The professionals will continue to use wholesalers.
Supply House Times: Let's talk about SWA. Tell us about your experience with the organization.
Christiansen: I grew up attending SWA meetings. When I first came into the industry, they disbanded their Young Executives group in order to get young people involved in the regular activities. So I've participated in SWA committees for at least 15 years. It's been a tremendous experience to work with people like Stewart Hall, Charlie Banks, Joe White, Morris Cregger and others who are icons and flourished in this business. My dad taught me 90% of what I know about the business, but listening to other perspectives filled in the other 10%. It was fascinating to hear those people talk about doing the same things we were, only on a bigger scale.
Supply House Times: How are things going with the association?
Christiansen: SWA is very financially secure. We could have a down convention for 10 years straight and still have money in the bank. This is our 75th year, so our convention registration is way up for wholesalers, manufacturers and even reps. That's encouraging, because reps have been the ones backing off lately.
One reason is we've invited china and water heater manufacturers to hold customer sales meetings in conjunction with our convention. It's a big expense for them to fly customers in from all over the country and put them up. By providing them that opportunity at our convention in Boca Raton, SWA wholesalers will be coming there anyway, and we told them their customers from other parts of the country would be more than welcome as well. We got all the water heater manufacturers participating and all but one of the major fixture manufacturers.
Next year we'll be moving our convention from a March-April time frame to June. This is to make SWA more of a family event by bringing the kids along when they're out of school. This helps to promote business longevity and perpetuation. June weather also brings more locations than Florida into play.
Also, one of the complaints we heard frequently from manufacturers is that the months of February-March-April are nothing but travel time for them. It's three months of lost weekends, popping in at home to change clothes, then hitting the road again. So we want to pull away from the same time frame as buying group meetings and other regional conventions. We'll also be combining our convention with our summer board meeting, which used to be separate.
Supply House Times: After WDA folded you invited their membership to attend your convention. Have you gotten many WDA registrants?
Christiansen: I'm disappointed that not many WDA people signed up. Although we're not officially representing those states, we had hoped to get some spillover, but haven't.
Our pitch to WDA was to keep alive their membership in ASA, and it's cheaper through us than to go direct. Plus, we'd do seminars for them and whatever else was needed to keep the region viable for ASA. We felt if somebody didn't get to them quickly, apathy would set in and it would become harder to resell people on the idea of association.
It was kind of scary how quickly WDA collapsed. We had been talking to them for several years about combining conventions and other things, but when the end came it was without warning. Nobody at ASA or SWA saw it coming.
Supply House Times: Next year ASA is going to allow direct membership to wholesalers without belonging to a regional. What do you think about that?
Christiansen: I think it's good and bad. Some people don't care about regions and want to belong to national. Yet, in the overall scheme of things, I think if they ever do away with regionals, you'll see the fall of ASA in a very short time afterwards.
ASA wouldn't have time to do what we do in membership drives in our states, or offer the kind of convenient educational opportunities, especially for independents such as ourselves. It's a lot more cost-effective for me to put four people from my company into a Suburban and drive to Nashville for a program than to come up with four plane fares and hotel rooms halfway across the country. That's where the regionals play a part, and SWA has been particularly strong in regional educational programming.
If ASA has at least four solid regionals, we will see ASA perpetuated. Just as in business, local people know their market best.
Supply House Times: What can a trade association do that a buying group can't?
Christiansen: I think buying groups have a niche to fill, which is purchasing. When they start veering from that and spend money on education, then they're not putting that extra dollar in our pocket. So I don't think that's their niche. I know some buying groups have gone in that direction, but the guys who go to buying group meetings by and large are like my Dad. He's 75 years old, been to every seminar there is and could write a book about what they teach. So I see trade associations, be they regional or ASA, as needing to focus on education.
Convention gatherings once a year also are important. Not only for business reasons, that's where friendships get formed, and where I learn who has things I might buy in an emergency if I'm out of stock. Also, the conventions offer me an opportunity to meet with a lot of vendors. I see many at our buying group meetings, but not half as many as I see at SWA.
Our trade associations are important to manufacturers as well as wholesalers. Manufacturers face many of the same problems that we do, and they can't fix all those by themselves. As a group, we can come up with solutions, but we have to have working relationships to do that.
SWA understands their problems and has tried very hard to accommodate the needs of vendors. For instance, conventions and trade shows are very expensive for a manufacturer and they're looking for ways to consolidate them, so that's why we're having manufacturers combine their national sales meeting with this year's convention.
Supply House Times: Is there anything we haven't discussed that you feel important to communicate to our readers?
Christiansen: The thing I want to emphasize is that if you're part of the industry, you need to give something back to it. If you're reading this magazine and are not part of ASA, you need to look into joining. It will be important to your business lifeblood. As a group, our industry can do a lot of things. When you choose not to participate, you forfeit a chance to learn from others and grow.
We're not just about a big party anymore. We're all about business. Information is out there to help you deal with just about every problem you will confront as a wholesaler. I don't see how anyone, especially an independent, can afford not to participate.
To Christiansen, business is friendship, and being small is more a blessing than a curse. Friendship may not get you much more money, but it will get you the order.
Chris-More Inc. In ProfileAnnual Sales: $20 million
Locations: Memphis (30,000 sq. ft.) & Nashville (25,000 sq. ft.)
Year Founded: 1971
Business Specialties: Plumbing, some industrial PVF.
Markets Served: About 50/50 residential and commercial.
W. J. (Bill) Christiansen Jr., President and CEO
J. D. (Darryl) Skipper, Vice President
R. W. (Bob) Christiansen, Vice President, Memphis Branch Manager
J. W. (Jesse) Hudiburg, Nashville Branch Manager
W. J. (Bill) Christiansen III , Operations Manager
W. T. (Tommy) Hurst, Credit Manager
Thomas Boyd, Outside Sales
Don Edwards, Outside Sales
Frank House Sr., Outside Sales
Frank House Jr., Outside Sales
Jeff Wiggins, Outside Sales
Bob Stewart, Outside Sales
Steve Harper, Purchasing Manager
Kim Hardy, Warehouse Manager
Jim Duerr, Outside Sales
Dwight Ethridge, Outside Sales
Tye Waldon, Outside Sales
Marshall Odom, Purchasing Manager
James Hughes, Warehouse Manager