Relationships Still Count
I’m in the habit of concluding interviews with a standard question: “Is there anything we haven’t covered that you want to make sure to convey to our readers?” John Landrum’s response nicely summarized his business philosophy in a few concise sentences. “I can’t say enough about the people I work with, or my customers. It’s really neat to work with and sell to people who are your friends. All it takes is trust, integrity, knowledge and a little bit of inventory and service.”
Friendliness is an abiding characteristic of people from the South. This year’s incoming president of the Southern Wholesalers Association exudes it. Companies like his, Landrum Supply Co. (Augusta, GA), represent a throwback to an era when relationships meant everything to a plumbing wholesaler. It’s hard to make that same statement today given all the attention paid to purchasing and operational efficiencies. Landrum’s message, though, is that you ignore the human factor at your peril.
“Relationships still count,” he uttered several times during our conversations. “We won’t get all their business, but our goal is to get the first call from our customers every time they need an item and the last call before they buy it somewhere else. This is what the SWA Profit Enhancement Institute teaches is the ‘supplier of choice.’”
Go back a couple of paragraphs and notice that he doesn’t count on relationships alone to drive business to his door. It also takes “inventory and service.” That gets coupled with local moxie to enable even a small, single branch company with 19 employees like Landrum Supply to hold its own against the giants.
Landrum's BackgroundMost PHCP distributors at some point in their early history looked very much like Landrum Supply. Joe Landrum learned the business working for Noland Co., until he got the entrepreneurial itch and opened up his own supply house in 1965. He brought along a couple of co-workers, who stayed with the company until they retired in recent years. Son John Landrum worked summers for his father while growing up, then went to college at Georgia Tech, where he graduated with a Bachelor of Science degree in industrial management in 1978. He worked three years as a sales engineer in Oklahoma City for an HVAC manufacturer, American Air Filter, then joined an independent manufacturers rep firm in Atlanta that was started by some American Air Filter employees.
John Landrum moved home in 1984 to work full time in his father’s business. The next several years saw an expansion of the main location and the addition of a branch in the fast-growing area of west Augusta. Joe Landrum retired in 1993 and John has run the business ever since. In the early 2000s the employees and inventory at the branch were moved back to the main location to improve on customer service.
Landrum Supply knows its marketplace like a resident fish knows its way around a small pond. Home of the fabled Augusta National Golf Club and annual Masters Golf Tournament, Augusta is an affluent community, still with a small town atmosphere but growing enough to provide plenty of business for supply houses like Landrum. The company has always focused like a laser on its hometown market.
Landrum used to be mainly a commercial bid and spec supplier, but under the son’s leadership has diversified more into the residential market, including operating a Kohler showroom with a small merchandising package. I spoke with John Landrum about the challenges facing him both as a small independent wholesaler, and as the new president of SWA.
Supply House Times: What do you consider to be Landrum Supply's competitive edge?John Landrum: One of our strongest assets is our employees. We have had very little turnover, so our customers deal with people who have been with Landrum Supply for a long time and are committed to this industry. They know the reps, the products, the contractors, their problems and all sorts of other things that only come with experience. If someone has a problem, most likely our people will have dealt with it many times over the years and know a solution.
We’re also proud of our inventory position, which is geared to our local market. We stock things like four-inch copper pipe and fittings, plenty of forged fittings and cast iron pipe used by hospitals. We also stock up to 10-inch plastic pipe, hangers for mechanical pipe, wall-hung toilets and various heating accessories. A competitor recently lost a bet with one of our customers after telling him we didn’t have a three-inch copper male adapter in stock.
Bigger companies may be able to obtain items from a distribution center or distant branch within a day or so, but that’s not the same thing as having it on hand. Inventory is profitable when managed well - profitable to us, as well as to the contractors. That’s what being a supply house is supposed to be about, isn’t it?
Q: Sounds like you think a small company can do very well in this era of consolidation?Landrum: I don’t think we are remotely handicapped. We’re a big fish in a small pond, and buy a lot for our area. We excel in the averages cited in the ASA Operating Performance Report and SWA Annual Benchmarking Report. Maybe the bigger wholesalers get bigger rebates, but they also have bigger expenses.
Q: Who do you have minding the store when you're away on SWA business?Landrum: We have great people in place. Because we’re a small company, we all wear a lot of hats. David Brown, who’s been with us since 1980 and also ran our west Augusta branch, handles all purchasing. My younger brother, Peter, has been here since 1981 and handles most of the operational issues. Ashley Odom, our sales manager, has been here since 1999. We all share both inside and outside sales responsibilities along with the inside and outside salesmen. This ensures a customer can always get to someone that can help them. My sister, Mary, came on board as the showroom manager in 2000. Rhonda Partridge pretty much manages our office and has been here since 1991 - she knows everyone, and everyone knows her. We have people working the counter who have been here five to 10 years and know what to do without a lot of direction. Same with our delivery and warehouse people.
These people can run the business without me. This is not at all a concern of mine.
Q: What's the biggest issue you deal with in business day by day?Landrum: Growth and people. Every business needs to grow, and you need good people to grow. The need to have good employees can’t be exaggerated. We are currently planning on a relocation and major expansion of our building, and without the right people in place, this will not work.
I read a book, Servant Leadership, that hit the nail on the head addressing the need to remove roadblocks that get in the way of people excelling in their jobs. I also recall reading an article that addressed the issue of glass ceilings, whereby companies get in a growth mode and grow past their abilities to manage it. I’m determined not to do that. Managing this is probably the hardest thing I have to do.
Q: Let's talk about SWA. How did you get started with the organization?Landrum: The first thing my father did when I came on board in 1984 was get me involved with Southern Wholesalers. My first encounter was at a summer board meeting. I didn’t have a clue what I was getting into. I remember walking into the opening reception of about 40 people and seeing only one person that I knew. That was E.B. Pulley, who founded a rep firm that bears his name. He was a true gentleman who knew me from calling on my dad.
Mr. Pulley saw me wandering around, grabbed me and introduced me to Dottie Ramsey (president of Modern Supply Co. and a past-president of both SWA and ASA). She then introduced me around, and everyone made me feel welcome. Since then, I’ve learned a lot and made a lot of great friends through SWA. I would hate to be in business without belonging.
Q: Give us a status report on SWA today.Landrum: The group of leaders that served as president before me - Bob Christiansen, Bill Kenney, Sam Williams and Joe Lawrence - had to deal with the transition to a new management team. I can’t say enough about how well they’ve managed it. Now we’re in a groove knowing where we are and what we want to be.
It’s been three years since we brought Terry Shafer aboard as executive vice president. He has had a chance to travel around and meet many of the members, and has had a very positive impact.
Convention attendance was up last year with both members and vendors, and it appears that it will be even better this year. The association also has gained several new members this year.
That’s important because SWA has to be a strong association in order to be of benefit to our manufacturers and vendors. The annual convention was moved to the summer several years ago in an effort to make it more casual and to welcome the families of the attendees. Members get a chance to deal personally with the people they buy from, possibly meet their families and mingle in a close setting. And if manufacturers are to come to our convention, we need to get the wholesalers there. We understand that.
One of my goals is to increase attendance not only by bringing in new members, but getting old members to become new attendees. Enough of sitting on the sidelines.
Q: What are the big issues facing SWA?Landrum: We talk a lot about the need for a trade association and why we’re here. Buying groups have gotten to be a big factor and have grabbed some of the networking function that trade associations used to provide. Mostly, though, they are focused on buying better. Trade associations like SWA are focused on the selling side, which translates to education.
Those of us involved with SWA are very bullish on education. Each year SWA sponsors a three-day Profit Enhancement Institute that is a hard-working, serious course. It includes a day of financial numbers crunching, a day of sales focus and half-day of HR issues. Plus, we sponsor three one-day seminars that move around the region and are aimed more at middle management personnel. It’s great at reinforcing everything we try to teach to our employees. The annual convention has a conference booth program and other educational opportunities. The American Supply Association has an Education Foundation and has developed resources like Product Pro, Employee Performance Improvement Toolkit, Essentials of Profitable Inside Sales, etc. Both of these organizations have Web sites for more complete information.
The education offered by SWA and ASA is one of the industry’s best-kept secrets. It’s hard to explain to people not active how much they’re missing. I’m hoping this article will help in reaching some of them.
Q: Membership is always an issue with trade associations. How have you managed to grow a bit when so many others have struggled merely to survive?Landrum: We’ve managed to convince some smaller wholesalers to join. There’s been a misperception among a lot of wholesalers that trade associations are for the bigger guys, yet the majority of SWA members are $15 million or less in size. Joining SWA is a financial bargain as it also includes membership in ASA and NAW.
The interesting thing is, the larger firms seem to understand how much they’re getting out of SWA. We have many very successful companies represented in SWA, and some of them send scores of their people to our training programs each year. One of the national members is the single biggest buyer of ASA educational materials. They have the resources to produce their own, but why should they when there is so much good information readily available at a fraction of what they would have to spend to develop it?
I can’t speak for every regional, because the wholesaler base is different in every part of the country. I do know that over the years SWA has always harbored some very successful companies. It sure doesn’t hurt to have those kinds of companies in your membership base.
SWA also does a good job of listening to what its members want. They keep telling us they want strong educational programming, coupled with networking opportunities. So that’s what we aim to provide.
As a small independent in such a large industry, I cannot imagine trying to go it alone. The networking opportunities, personal education as well as education for all of my employees, and industry insight I receive from my membership in SWA, ASA, and NAW are essential to my continued success.