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When a salesman comes in and reports, "guys are asking me for xyz," the Gleasons take a close look and ask pointed questions. "We want to know who, if anyone, is already selling it? Is it gaining popularity on other jobsites? Will it be profitable? How much warehouse space will it take to properly stock it? Can the manufacturer deliver like we'd expect it to?
"We have literally hundreds of thousands of different SKU in the warehouse, many of them are what we consider to be 'C' and 'D' products, but we can't stock everything. We have to make careful decisions. There are some things that have become just basic commodities and so many people sell them - we compete with more than 500 Fastenal branches, for example - that we're slowing down when it comes to adding things. We make sure everything is a good fit."
Above the offices in the new Mokena facility, space has been dedicated to those slower moving items because, as Mike says, "when a customer needs one of those 'D' items and you can deliver in a hurry you're a hero. And, when they need something like that they don't quibble over price, so we can make some money on it, too. We have fair prices and the inventory to deliver, and that's the key to not only deciding what to carry, but to building customer loyalty.
"Keeping the warehouse full can be an expensive way to go, but it has paid off," he adds.
Moving into a new, spacious warehouse barely two years ago, the company has found that it doesn't take long to account for almost all the available space with little left over for adding extensive lines or product groups. The company outgrew earlier expansion plans before the first shovel of dirt was turned and went looking for a second site. The new 52,000-square-foot facility more than doubles the old layout, but, according to the Gleasons, it's "filling up fast."
Alliances with strategic partners are helping ELFCO's management team make wise buying decisions and allocate precious warehouse space. Working as part of the Sphere 1 co-op and as a member of STAFDA, the Gleasons are regularly tapping industry expertise and taking advantage of the buying power established organizations can share.
"Becoming a member of Sphere 1 may have been the best single decision our company has made in the last 10 years," Mike Gleason enthuses. "Even though the members are in the same business, we're not competitors so we're all open to sharing information and offering suggestions on how to deal with situations we all face. The group is a real resource."
"STAFDA is an organization that has grown tremendously since we joined about 15 years ago," adds Tom Gleason. "Its show has become huge and we take advantage of it to get closer to key people from our top vendors - people we seldom see anywhere else during the year.
