“Our plan is to buy as well as anyone in the world.”
You can’t sell out of an empty wagon.That expression used to be the industry’s mantra decades ago when distributors were apt to sink every spare dollar into inventory. The business has since evolved more along the lines of just-in-time thinking, and product proliferation makes it hard for a distributor to act otherwise.
So when you find a throwback to the bygone era, it qualifies as a “man-bites-dog” story. And that brings us to Robert-James Sales (RJS), a $115 million industrial PVF distributor whose warehouses contain an eye-popping $30 million worth of stainless pipe, fittings and, to a lesser extent, valves.
They stock pipe up to 54 inches, fittings and flanges as large as 36 inches, and so much Duplex 2205 pipe and fittings they recently ventured into the master distribution arena for that specialty grade. Shelves upon shelves at RJS are filled with humongous reducing tees and other hard-to-find stainless PVF products that bring sighs of relief from customers in dire need.
The unlikely locale of Buffalo, NY, serves as company headquarters. Its 200,000-sq.-ft. distribution center feeds seven other RJS stocking branches that stretch east, south and west as far away as Minneapolis. Branches for the most part will stock stainless staples up to 12 inches, but rely on weekly deliveries from the DC for the bigger items.
Founded in 1972 by James “Jim” Bokor Sr. and Robert Glidden, the company’s identity comes from their first names. Both founders are still very much involved in daily operations as chairman (Bokor) and vice chairman (Glidden), though both now reside in Florida and are closely supervising the transition to a new generation of management headed by a team of youthful yet veteran executives: President Jim Bokor Jr., Marketing Manager Jeff Parrish and Treasurer Joseph McIntosh. They, along with Sales Manager Scott Hughes and the eight branch managers, oversee a lean operation that accomplishes much with some 120 employees overall.
Bokor Jr. joined his father’s business after graduating from college with a business degree in 1991. In traditional industry fashion, he began learning the ropes long before with part-time glamour jobs such as “sweeping more floors than I care to recall.” Parrish joined the company in 1990, McIntosh in 1988. Employment longevity typifies a company that, brags Jim Jr., has “never had a layoff in company history.”
“It's how you buy”Odds are good that most of you interested enough to read this know or have at least heard of Jim Bokor Sr. He’s been involved with the stainless PVF business for a half-century, and has a legendary knack for determining what to buy, how much and when. According to Jim Jr., his dad’s influence extends beyond RJS to the point where various brokers will follow his lead in ratcheting purchases up or down in response to anticipated market conditions. “My father has an uncanny instinct,” said the son. “I’m trying to develop it, but that will take time.”
Said Jim Sr.: “No matter what anyone tells you, it’s not how you sell that matters most in our business. It’s how you buy. We’re in a global marketplace, and our plan is to buy as well as anyone in the world in order to compete in the total market.” This seems to involve more art than science.
RJS buys from factories all over the world - including still a fair amount of domestic product. Father and son Bokor both spend several weeks each year traveling around the world to visit existing and prospective suppliers. They are fussy about who they deal with and will not buy from anyone without first inspecting facilities and getting to know the people in charge.
Buying isn’t everything, of course. Delivering product where and when it’s needed is just as important, especially to the mechanical contractors working fast-paced jobs, which comprise RJS’ biggest customer group. They also sell to fabricators and OEMs, and to other distributors. RJS claims the ability to fill about 80% of orders out of stock.
A key is the company’s fixed gaze on the stainless business. Various vendors and customers have tried to talk them into the carbon steel marketplace over the years, but everyone you talk to at RJS gives the same response: “Stainless is what we know.”
Said Parrish, “When things are going well, a lot of distributors think it’s enough to buy it, have it shipped direct and pick up a few points handling the paperwork. But when push comes to shove, it comes down to who has the product on the shelf. We’re good at stainless and have a great supporting staff, including two inside salesmen with almost 50 years of experience. We can answer any questions that arise from the field.”
“Plus, where would we put it?” chimed in Bokor Jr. “We don’t have room for carbon steel. We’d rather invest money by expanding the size range of our stainless inventory or getting into different versions, like we’ve done with 2205. It takes the same amount of labor and manhours to sell a truckload of carbon steel as it does stainless, but with not as much profit. So for us this is a no-brainer.”
Feet on the groundRJS has 29 salespeople on the road reaching out to customers, and a crew of seasoned veterans on the inside. What about the modern thinking that sees a diminished role for outside sales due to rising costs? “That’s not for us,” said Parrish. “If we’re not in a territory knocking on doors and shaking hands, it becomes out of sight, out of mind. The outside salesperson’s job is to get the phones to ring.”
They rely on their outside salespeople for relationship building and market intelligence. Yet Parrish acknowledges the growing importance of the inside sales role. RJS managers try to arrange for the inside staff to go out on field calls periodically just to meet the customers and understand their business. “The outside person may see a customer every four or five weeks, while the inside person sometimes is in touch more than once a day,” Parrish observed. “They are the ones that can put out a fire and help or hurt a relationship on a daily basis.
“Nowadays everybody needs everything yesterday,” he said. “Sometimes I am surprised by our ability to accommodate them. The amount of material we move in and out of here is amazing. I’ve seen us receive 10 overseas containers in a week and ship out 80 trucks in a day. And we do it without a lot of people.”
Nor do they rely on advanced warehouse automation. This is a company that still takes a physical count of annual inventory. I asked how they manage to move so much bulky product in and out with relatively few people and without handheld scanners and other electronic marvels.
“We have no job descriptions,” explained Jim Jr. “Everyone does whatever it takes to get things done. I’ve seen warehouse guys making deliveries. We’re a close group and we get to know the families of everyone. Every single person here takes pride in doing a great job.”
Parrish added; “A slogan we use around here is, ‘We have to do it or someone else will.’ This explains why our people hang around to get things done late in a day and manage to get so much out the door on any given day.”
Larry Wojno, a marketing communications consultant who has handled RJS’ advertising and public relations for many years, offered this outsider’s observation: “They have a customer service ethic in an era when customer service is dying. You can get right through to the Robert-James people, and I am impressed with what these folks can do just by rolling up their sleeves and having a presence in the field. Reliability is what differentiates Robert-James from other suppliers.”
An example of superior customer service includes offering “drop” pieces of pipe cut to any length a customer desires. If a customer wants three feet of pipe, they don’t make him buy the entire 20-foot length. Buffalo’s warehouse includes one of the largest automated cutting saws to be found anywhere in the U.S., capable of handling up to 36-inch pipe. They keep careful records of the remaining pieces and will cut from those where possible to reduce spoilage to virtually nothing.
Master distributionAlmost inevitably distributors with a large inventory in a select range of product look to selling to other distributors as a way to capitalize on the investment. RJS has been doing this with its Duplex 2205 grade of product. The specialty grade features high chromium and molybdenum content, which leads to greater corrosion resistance and weldability.
Bokor Sr. told me they got into this market via the “back door” about three years ago when a good customer doing a job overseas placed a $6 million order for 2205. Nobody was stocking the material, and the vendor invited RJS to become a stocking distributor with the promise of referring other distributors to them. RJS started out stocking 2205 up to 12 inch, and have since moved up in size to 24 inch. “In general, I think we have the best inventory in that size range you’ll find anywhere - not only in pipe, but also butt weld fittings and flanges,” said the company founder.
“We protect our distributors in pricing,” he was quick to add. This of course is an essential strategy for anyone who wants to succeed in master distribution. Violators don’t last long. RJS has been in the master distribution field for about a year, and they have started to make inroads beyond their 2205 offerings. Besides 2205, RJS stocks many stainless products not found in many supply houses, such as large diameter fittings, oddball reducing tees and up to double extra-heavy wall pipe. There are not too many places a distributor can go when a customer needs these products in a hurry.
Steady expansionThe company’s growth over the years has reflected a steady expansion geographically. Typically, they keep working a branch territory until business at the outer reaches becomes sufficient to support a new branch. Sales out of its Chicago branch, for instance, led to the opening of a facility in Minneapolis. The Chicago and Indianapolis locations have begun generating considerable sales in St. Louis and Kansas City, so it may be only a matter of time before RJS opens a branch in one of those cities.
The company has a management training program to groom future leaders. “We always try to have a management trainee in the pipeline,” said Bokor Jr. “We don’t want to be prevented from opening somewhere we want to open just because we don’t have a manager available.”
Management training at RJS is the old-fashioned “trial by fire.” They learn product by working in the warehouse and progress through inside sales and up the ladder. Recruits come from both inside and outside the company.
Jim Bokor Sr. identified the growing role of imports as among the biggest changes he’s observed in the stainless PVF business during his long career. “Plus, distribution has changed, with so many supply houses getting gobbled up,” he added. “In the long run, that helps us, because it narrows the competition. Instead of having five or six suppliers to choose from, a mechanical contractor may have only two or three to go to.”
RJS has capitalized in a big way on the ethanol boom over the past several years. A backlash is underway against ethanol production, but the company founder doesn’t see that as putting more than a minor crimp in RJS’ business. “We’re also very much involved in wastewater treatment, in power generation - and I’m looking forward to more nuclear business in the not-too-distant future,” said Bokor Sr. “There are a lot of good things still happening in the U.S. in our markets.”