Return on investment at Ace Plumbing, Heating and Electrical Supplies
Larry Berman wasn’t about to let all the newfound space Ace Plumbing, Heating & Electrical Supplies had go to waste.
Berman – president of longtime south New Jersey-based Ace – had nearly 6,000 sq. ft. of showroom space to play with when the company moved into its new facility in Vineland, N.J. The company installed many working displays, including whirlpools, showerheads, toilets, steam and tanning showers, body dryers and kitchen faucets. Ace also has lighting fixtures on display.
“What we wanted to do is have a destination rather than just a showroom,” he says. “We’ve separated ourselves from the big box stores as well as our competition. A customer can see and touch all items in one location.”
The new-look showroom hasn’t gone unnoticed – or unappreciated. Recently, Ace’s showroom won a WIT Honors Achievement and Marketing award in the merchandising/showroom category. Ace was honored at WIT’s fall meeting in Phoenix.
“With the economy being the way it is, we felt remodeling and the upscale house is where business will mostly go,” Berman says. “But, we do have the basics all the way through. We don’t just display a $5,000 toilet. We still have the $100 toilet.”
The cherry on topAce got its start in 1950 with a 3,200-sq.-ft. building. Over the years, additional buildings were added and space expanded. By 2005, it was time for another major expansion and Ace started construction on its new 50,000-sq.-ft. headquarters and distribution center. The showroom was the final segment of a massive expansion for Ace.
“It was the culmination of building a state-of-the-art facility,” Berman says. “We did it like an Erector Set; one piece at a time. We didn’t move very fast and it took us just about five years since we put the first shovel into the ground.”
Ace worked with Canada-based Systeme Huntingdon Inc., for the showroom planning process. SHi’s credentials were strong and Ace was excited to work with it to develop another striking showroom. SHi fabricated and built the display pods throughout Ace’s showroom. Berman and General Manager John Sperratore stress how important the prebuilt displays were in helping get the showroom off and running.
“It allowed us to quickly install and implement them into the showroom,” Sperratore states. “They’ve developed many award-winning showrooms.”
The ample showroom space allows Ace to display many plumbing and lighting lines such as American Standard, Porcher, Jacuzzi, Aquatic, Newport Brass, Altmans, Moen, Delta, American Brass, and many more.
So far, the plumbing fixtures and displays haven’t been changed, but that doesn’t mean Ace can’t get creative with the layout if it chooses.
“The SHi system is made so you can move things around very easily,” Sperratore says. “We’ve displayed a lot of product that is new and innovative. You’re not going to go to the local competitors or box stores and see the types of products we display and sell. That sets us apart.”
The investment in the larger showroom has paid off handsomely. From June 2011 to June 2012, showroom gross sales have increased 77%. The increased business has given Ace the flexibility and confidence to add to its employee roster – which currently stands at about 60 people.
“Our new showroom has been extremely successful,” Sperratore says. “We’ve added three additional employees to the showroom staff. We’ve also added the extra sales volume without any substantial increase in advertising.”
The local contractors have been very happy with Ace’s expansion and in particular, the new showroom. The plumbers know they can send customers to Ace and customer will be treated well.
“In the absence of a nice, decorative showroom, the installing contractors don’t have anywhere to send their clients,” Berman says. “They’re actually happy to send their clients to our showroom and we help them make a sale. Everyone wins in the end. It’s a partnership between the trade contractors and us.”
Changing landscapeBerman says Ace always thinks about using green technologies whenever applicable. Ace’s new showroom features radiant heating throughout the facility and the showerhead and faucet displays also use recycled water.
“We wanted to be as green as possible,” Berman says. “We didn’t skimp in any way, shape or form. It was built as a plumbing, heating and electrical supply house. We made it so it would be comfortable. Everything was done with a lot of thought.”
In 2005, Ace saw new competition come into its market – which Berman says can span a 75-mile radius and includes the Philadelphia, Delaware, south and central New Jersey markets. So Ace bought two of its local competitors to make four locations. In 2011, it bought its fifth and final (for now) location. Ace’s expansion allowed the company to push forward during the economic downturn. The new facility didn’t stop construction and was opened on time.
“The downturn hit our market, but we were able to maintain what we were doing,” Berman says.
Being a diverse company also was key for Ace. It has a redistribution business to other wholesalers in the tri-state area to go along with its counter and showroom business. Berman highlighted the counter as being critical during the economic downturn.
“Repair parts are a tremendous business for us. We keep a lot of the detailed parts for major brands such as Bradford White, Goodman, H.B. Smith and A.O. Smith,” he says. “That’s how we’ve been able to survive this recession.”
Sperratore adds: “We run our company very conservatively. We strive for slow and steady growth. You just can’t go out and buy every single line and take every order, especially low profit-margin orders. Slow and steady and having inventory in stock is the key to our company. Using this philosophy has allowed us to keep our employees working with zero layoffs and that leads to less turnover and longer-term employees.”
The expansion of the showroom and warehouse gave Ace the opportunity to add to its product lines. Berman says that since Ace has been in business dating back to 1950, it already offered customers all the major lines. With the new space, it was able to engage luxury products and manufacturers it hadn’t done business with in the past.
“When we built the showroom it gave an outlet to a lot of the higher-end lines,” he notes. “Vendors came to us wanting to display and distribute their product. We built the core business based on the existing relationships, but the showroom allowed us to really reach out and get some of the premier showroom manufacturers. We believe these relationships, old and new, will help us make the showroom a success for years to come.”