In Orlando, Orgill gets down to business

ORLANDO, FLA. —At the Orgill Spring Conference in Orlando, Fla., last month, the first thing most attendees saw when entering the show floor was a giant banner reading: “Here We Grow Again.” The banner mapped out the current Orgill distribution warehouses around the country, including the new Kilgore, Texas, location and future Northwest and Mid-America supercenter locations. The 500,000-square-foot Texas facility made its first deliveries Feb. 18.

The banner was symbolic of growth opportunities, despite the housing downturn.

“Things are tough, and the housing industry and the slump that we’re in right now affects different people to different degrees,” said president and CEO Ron Beal, who greeted attendees individually as they passed through the door on to the show floor. “None of us are immune to it. To some degree every person in this building is impacted by the macroeconomic factors that are going on right now.”

But Beal said he was pleasantly surprised by what the customers he met had to say.

“The thing that’s really impressed me is the degree of optimism,” he told Home Channel News. “Not that anyone is saying, ‘Well this is going to be over in July.’ But I’m hearing ‘We’re OK, we’re going to make it, and things are going to turn around. This thing is going to cycle through, and we’re in good shape and we’re doing things we need to do.’”

That degree of optimism contrasts with what Beal was hearing from his members a year ago—possibly because some of the weaker businesses didn’t attend this year.

“This is a building full of entrepreneurs,” he said. “These are the guys that will do the things that they need to do to weather this storm.”

Beal conceded that pre-registration and overall attendance for the show was down, but he was still happy with the turn out. He also noted this year’s Conference produced approximately 225 new dealer prospects.

“I think that would be close to a high-water mark for us,” said Beal. “That’s one of the gauges of an event like this for us.”

Beal also noted the strong international presence the conference enjoyed.

“This year we’ve got a delegation from China. It’s really the first time we’ve had a delegation here to buy. Usually they’re here to sell.”

Beal also noted that Canadian prospects were growing.

“We’ve got a real Canadian delegation for the first time at this size.”

But new warehouses and international prospects aren’t the only forms of expansion to which Orgill is looking. The distributor’s own direct-sourcing merchandise took center stage at the convention and highlighted the dealers new electrical department as well as beefing up its plumbing department.

“We’ve redone some of our core areas and really have some exciting things going on,” he said.

The wholesaler also featured a green items section.

“This is the first time we’ve really focused on it,” said Beal, who noted that green would take a larger focus at the Fall Dealer Conference in Chicago.

“We’ll make a splash on green at our next show. We’re aware of it, it’s real, we’re working on things. It’s a category that is an opportunity for a lot of our retailers.”

Beal added that going green isn’t always about adding new products but also identifying the current products Orgill offers that fit green.

“We’ve got a lot of products from a lot of manufacturers that fit the green category, so we’re trying to tie it together and merchandise it a little bit better, and we’ll do that. We’re excited about some things that we’ll be able to do up at McCormick Place [in Chicago].”

Richard Tegethoff, from Knoxville, Tenn., was in attendance looking for new products for his contractor and construction supply business.

“I joined Orgill several years ago to be able to buy a lot of stuff all in one spot.”

Like a lot of small businessman, Tegethoff was turned away from other direct sourcing warehouses because of his business’s size. “A lot of other distributors and whole salers wouldn’t talk to me because I was so small, but Orgill had a three tier system and brought me in on the lowest tier, and that’s why I stick with Orgill,” he said.

Tegethoff, who said his business was down 30 percent last year, said he dropped a lot of other suppliers in the wake of the housing down turn, and focused on Orgill for the items he was still selling.

And while Tegethoff is staying relatively positive about the outlook for 2008, the rising price of nails, due partly to rising steel prices and partly to the Department of Commerce’s recent decision to impose tariffs on imported Chinese and United Arab Emirates nails, is becoming a big concern. Tegethoff said that a 50-lb. box of nails that he would sell for $35 was now costing him $34.95.

Rising nail prices are part of today’s playing field, said Beal “It’s not putting us at a competitive disadvantage, because it’s affecting everybody. But it’s making it very difficult right now to keep up with pricing and just know what’s going on.”

With the housing downturn still in full effect, and prices on steel, copper and gas steadily rising, Beal remains confident that Orgill’s dealer markets are set to provide its customers with the tools they will need to weather the storm.

“Here we can expose people to different ideas and different categories. There may be some that people haven’t got at, or have overlooked or whatever, and I think it’s an opportunity and a lot of people are using that to refocus.”