Modern Plumbing Supply's Fresh Start
Steve Berger Jr. is owner of both the New Milford operation and a satellite showroom in Monroe, CT. His brother, David Berger, owns and operates Modern Plumbing Supply in Berlin, CT, and a satellite showroom in Middletown, CT. Their father, Steve Berger Sr., divided the business and sold it to his sons when he retired about three years ago. Steve Berger Sr. was featured in the pages of SUPPLY HOUSE TIMES in November 1984 as an example of the “New Breed” of independent wholesalers; in September 1994 in a feature on Modern Plumbing Supply, when it had just two locations, in Berlin and New Milford, CT, and both competed directly with Home Depot; and in June 1996, in a follow-up story to the “New Breed” series on independent wholesalers.
ChangesSteve Berger Jr. has been putting his own stamp on the business. He has introduced some interesting concepts in the renovated space in New Milford. Before, the warehouse had been in a separate building from the showroom. Now that the warehouse is in the same building, it's easier for the showroom salespeople to locate a product or check stock.
The parts counter, which had been smaller and located downstairs from the showroom, used to have a “hidden” entrance. Now the parts counter and showroom are separate departments but connected. Customers can walk inside from one to the other. Both occupy an equal amount of space and have highly visible exterior entrances.
Berger also notes that with a Home Depot store right across the street, his showroom had to be more “retail consumer friendly.”
Customers are no longer afraid to enter the counter area to find a part. Also, by incorporating both under one roof, they can flow from one to the other. Husbands and wives come together.
“Usually, the husband gets the gizmos from the counter area and the wife goes through the showroom,” according to Steve Berger's wife, Rose.
She recently returned to full-time work and took on the job of showroom coordinator/designer.
Rose Berger chose a dramatic blue for the showroom walls, created a seven-foot-high faucet wall with space to expand, and she carpeted the walls behind the mirror display so there will be no holes to patch when a mirror is sold.
“We call this a living showroom,” Steve Berger says. “Everything is for sale. You can come in every day and you will see something different. We are always moving the tubs and showers, changing patterns. We may expand further.”
Rose is still making plans for the showroom. “I want to have paint instead of wallpaper on the walls,” she says. “I'd like to create some styled bath displays, accessorized so people can see some ideas. We might show a suite for the bath, but nothing dated.”
Berger says he visited about 15 showrooms in the Northeast to see what they were doing.
“Our goal was to simplify,” Berger continues. “We raised the ceiling so that no matter where you stand, you can see the whole showroom. The showroom used to be divided into three areas.”
The three sales consultants have their desks in the back of the showroom, so the customer has to pass through the showroom to get to them. A receptionist's desk is at the entrance.
Also, the new layout allows for more interaction between counter and showroom personnel. “We try to make this a happy, fun place where everyone interacts,” Berger says.
HistoryBrothers Steve and David Berger each purchased part of Modern Plumbing Supply's wholesale plumbing business from their father in 2003. The business has been divided into two separate corporations. Each has a primary showroom/warehouse and a satellite showroom. Steve Berger's satellite showroom is in Monroe, CT, and operates under the name, Modern Bath Showroom. It is run by Tony Maurati.
Steve Berger Sr., now retired from the business, started out as a truck driver in the plumbing supplies business, then rose to become vice president and general manager of Best Plumbing Supply, Mohegan Lake, NY, before going into business for himself.
He acquired Martin Plumbing Supply in January 1979, and in the next six years made it grow from $625,000 to $2.5 million in annual sales.
He bought Modern in 1990, which then was a repair-and-replacement business. By 1991, he was completing work on a showroom. Steve Berger Sr. attributed much of the showroom's success to his wife, Diana, who served as showroom manager.
Steve Berger Jr. joined the business when his father purchased Martin Plumbing in 1979. Then he moved to Boston and became a paramedic, and later served as a police officer. When he met his wife, Rose, she was working for his father. Her father is a plumbing contractor and remains a big customer of the business.
Today, the relatively small company remains family owned and operated. Steve Berger says he still is working six days a week. His father is a frequent visitor. “He has been a great help and offered guidance,” he says. “I could not have done this without him.”
CompetitionWhat's it like doing business across the street from Home Depot? “We were prepared to drop prices on everything, but we didn't have to,” Berger says. “After pricing them out, we were pretty much in line, item for item. On the showroom side, 90% of what we have is not at Home Depot.”
Where Modern feels the pinch is in the counter area, which deals with the do-it-yourself market. Its water heater business has slacked off. Some retail prices in the counter area have been reduced to meet Home Depot. Modern regularly visits Home Depot to stay informed.
“Overall, they are very good marketers,” Berger says. “They get the best loss leaders. This particular Home Depot does not have as vast an offering as some other locations. We have a lot of parts here, including odd ABS fittings.”
The New Milford location also faces competition from another plumbing wholesaler with a retail showroom about 15 miles away that carries tile and lighting in addition to bath and kitchen products.
“They are high end - we don't compete head to head with them,” Berger says. “We try to hold our margin. We carry similar products but cover a somewhat different territory. They tend to target more designers and architects. Modern's customer base is more focused on contractors and plumbers.”
Showroom OperationsShowroom hours are Monday to Friday, from 9 a.m. to 5 p.m., and Saturday, from 9 a.m. to 3 p.m. It is staffed by three full-time showroom sales consultants: Stephanie Weinhold, Ceil Hungerford and Janet Geary Marchione. Inside sales are handled by Brian Meaney, Peter Rehoric and Brian Peterson. Jason Baisch is the outside salesperson.
Modern prices each item in the showroom. “We just show our discounted sale price,” Steve Berger says. “We don't haggle. These are prices we establish. The discount varies by manufacturer, but everything is discounted.”
Customers rarely object when they realize the price already reflects a discount, he says. “By pricing everything in the showroom, we alleviate a lot of questions. This puts people into the zone of what they can and cannot afford. Nobody has to waste time.”
Modern does not reveal model numbers or distribute manufacturers' literature, thus discouraging price comparisons.
“Some people price stuff in the showroom, then go home to search the Internet and find a big discount,” Rose Berger notes. “They don't bat an eyelash about how helpful and generous we are. That can be disheartening.”
The showrooms are considered profit centers, Steve Berger says. “I know what the sales are for our showroom people vs. counter sales,” he asserts. “I can judge how well the showroom or counter is doing.”
Modern Plumbing Supply buys and sells to other wholesalers to fill product needs.
Homeowners represent more than 60% of the showroom's customers, and contractors, 40%, Berger says. Business from homeowners continues to grow, he adds.
“We try to run a nice, clean, family-owned, service-oriented business,” he says. “We won't always be the best price, but we will make sure the driver gets the order to your house on time. No one likes waiting. Also, when customers have a problem, they know they can call me. I want their business. One bad customer can hurt your business. Independent wholesalers try to help each other out and that's what makes us strong.”
PromotionModern Plumbing Supply is doing radio ads, has advertised on television and has used Penny Saver newspaper ads to promote its showrooms, Berger says.
The company advertises in the Yellow Pages and uses the sides of its delivery trucks for additional promotion.
Also, Modern Plumbing Supply has its own Web site, www.modernplumbing.bizwww.modernplumbing.biz.
“We find that the one- or two-man plumbing shop tends to stick with the small independent supply house vs. going after the big chains,” Berger says. “On the showroom side, we work with several bath and kitchen dealers.”
TrainingTraining is ongoing at Modern Plumbing Supply, Berger says. “We encourage the reps to come in almost weekly for training.”
The wholesaler's showroom consultants have gotten to know the reps well, he adds. “Reps are still a strong part of this business. We know that we can call any time of the day or night and they will respond. We rely on them to service accounts.”
Management and sometimes members of the sales staff also attend industry events and trade shows, such as the Kitchen/Bath Industry Show.
Future PlansFurther expansion is possible. Berger says he owns another property so he could expand the business like he did in New Milford. “Right now, we are at a great size for us,” he says. “It is manageable. As we grow, we will need more space.”
The former Modern showroom is undergoing renovation and the company hopes to rent it out, according to Berger. He has spoken with complementary businesses, such as tile or flooring retailers or lighting stores, to open up in the former showroom space. “We are trying to make this more of a one-stop shopping area,” he says.