Managing a division of an electrical supply house reminds Avon Electrical's Richie Curtin of coaching basketball.
Curtin, a high-school basketball coach and a salesperson in the metropolitan New York electrical market for 20 years, says the fundamentals mean a lot in both games. The squeak of a teenager's basketball shoes sliding across the court and the sound of a salesperson's voice confirming an emergency shipment's arrival are sounds that both say “swish” to Curtin. Both illustrate fundamental basics so important to winning a tight game — or landing a big order.
Curtin launched the industrial division of Avon/WESCO, Hauppauge, N.Y., with business associate and friend Lance Oslinker in 1998. That division, which did $10 million in sales last year, now averages 10 percent annual growth and employs 18 people. The contractor side of Avon's business does approximately $80 million in sales.
Like a basketball team that focuses on the fundamentals of rock-solid defense, positioning under the basket and careful shot selection, Curtin and Oslinker don't rely on a glitzy playbook to produce wins. Instead, they have blended their contacts and winning attitude with the veteran support and reputation of Avon Electrical's Kenny and Lenny Moskowitz. A mammoth inventory and the purchasing clout and financial wherewithal of WESCO Distribution Inc., Pittsburgh, which purchased Avon in 1998 and operates the company as a stand-alone division, also fuels the wins of this expanding division.
“I used to have a license plate that said, ‘Attitude is everything,’” says Curtin. “It's true here, and it's true in the sports arena. If you have a positive, constructive attitude, you will be successful. If you have a negative attitude, it breeds negativity and leads to failure.”
A walk through Avon's Hauppauge warehouse tells part of the story. With $6 million in inventory — including one of the biggest stockpiles of conduit you'll ever see under one roof — and an additional $25 million in inventory available in WESCO's system of regional distribution centers, Curtin and Oslinker operate from a position of strength.
Although their division takes advantage of Avon's reputation and WESCO's national clout, it services customers such as factories, schools, hospitals, municipalities and mass- transit operations with a small-business approach. The division does its own expediting, billing and collections, which means its customers are consistently working with the same cohesive team.
“We have good vision,” says Curtin. “We had a goal and a business plan. We know where the market is, we have the ability to bring products to the market, and we have price. Maybe some of it's being a little bit smaller. We are not big business. That hands-on management approach may be the personalized touch that customers are looking for. That's why we have seen substantial growth from year to year. We have grown 10 percent or better, even in a down market.”
Oslinker and Curtin attribute much of the division's growth to its employees buying into a team philosophy that's created in part by a pooled-compensation program in which inside and outside salespeople share in the profits.
Curtin and Oslinker developed the pooled-compensation program after experiencing some less effective compensation packages as employees at other companies.
“All of our people have an incentive to write business,” says Curtin. “It's all pooled. If the phone rings, anyone picks it up. Different salespeople call on different accounts, but there is a pool. The general manager has an incentive, too. People work best when they have ownership, and are compensated for their good work. If they see the fruits of their labor, there is no better motivator. Everyone understands that the customer is No. 1 and that we all benefit from service.”
Oslinker and Curtin met years ago when Curtin worked for a Queens, N.Y., electrical distributor and bought lighting products from Oslinker, then a salesperson for D. Berman and Sons, a manufacturers' rep.
Curtin eventually took a sales position at another electrical distributor. Not long after an informal interview at a New York Mets baseball game, Oslinker joined him at that distributor. During the 10 years they worked together there, Curtin and Oslinker became the No. 1 and No. 2 salespeople. While the distributor's other salespeople sold automation products, Curtin and Oslinker sold area industrials pipe, wire, fixtures and related products to supplement the company's automation gear.
“Lance and I were an interesting match because what I didn't call on at our prior employer, he did,” says Curtin.
When the company changed its commission structure to focus more on selling the automation products that were outside their areas of sales responsibilities, Curtin and Oslinker decided it was time to move on. “The winds of change were blowing in a new direction,” says Curtin.
They enjoyed working as a team and believed they could help a distributor break into the industrial market in a big way. Their thoughts turned to Avon Electrical, the largest distributor in the area.
Oslinker and Curtin had heard a lot about Kenny and Lenny Moskowitz's Avon Electrical from someone at their former employer. The big fear at the company was that the sleeping giant Avon was going to wake up, says Oslinker. “They were so strong in the contractor business, but never had been into the industrial market as much. That resonated with us. We thought that maybe we should talk to the sleeping giant.”
Oslinker says they knew enough about the Moskowitz brothers and their casual but no-nonsense business approach to realize that using a slick presentation to explain their business proposal wasn't going to play well in their first meeting.
“It was kind of simple, not a lot charts and graphs,” he says. “It was basically, ‘Together we did several million in the industrial market and we think we can retain a good amount of that.’
“We asked for a percentage of profits. Kenny and Lenny agreed, and we came on aboard.”
Lenny Moskowitz says while Avon Electrical looked at the industrial business occasionally, it was a different world from its core contractor business. He says when industrial customers make a purchase, they want a specific product and brand.
“We always had the inventory,” he says. “We always had the personnel. We did not have the mind-set to deal with industrials. When contractors say they want a ‘Chevy,’ if we didn't have a ‘Chevy’ we would get him an ‘Oldsmobile’ because they would both get him to where he wanted to go. When an industrial guy wants a ‘Chevy,’ he only wants a ‘Chevy.’ And he doesn't just want a ‘Chevy,’ he wants ‘Chevy Model 123.’ It's a different mind-set.”
In contrast, he says electrical contractors are more interested with finishing the job they are working on and moving to the next job site.
“We were a contractor house, and everybody's job was to help the contractor complete his work. It's, ‘If you don't have an apple, give him an orange, if you don't have an orange, give him a pear. Finish the job.’
“The price was not nearly as important as the service. We tried to do that with industrials. We would taste that market and then back away. We knew we had opportunities there, but we were so busy growing. You can't do everything.”
When Oslinker and Curtin offered Lenny and Kenny Moskowitz their contacts and expertise at serving industrial customers for a piece of the profits, they saw a potential match.
“When Richie and Lance came to us, we knew it was an available market,” says Lenny Moskowitz. “We just weren't good at it. They knew how to handle the industrial market. It was a good match for us. They utilize our facilities, trucking and financing, but they utilize their own service for the customer. Their people have a different mind-set than my people. It works to both of our benefit.”
Curtin and Oslinker started out at Avon in a conference room with one phone, but they both had Rolodexes loaded with contacts at area industrials; municipalities; schools; and local, county and state agencies. They took a special interest in schools because of the large market potential in discretionary maintenance business.
On the industrial side, Curtin said the customers they called on knew the Avon name. But because Avon hadn't successfully focused on that business in the past, potential customers didn't know who to call. When they did pick up the phone, the call would sometimes get lost.
“Avon would do some of the biggest jobs in the New York City metropolitan area, with customers like Brookhaven Labs, the New York City Transit Authority, IBM or Keyspan,” he says. “They would be done with the job and there would be no follow-up. Avon would do all the contracting and construction supplies, but there would be no one there to say, ‘What about your maintenance?’
“It's not the $4 million contractor job. It's the guy in the tool crib who wants six tools and five ballasts. When you are doing $8 million to $10 million and your average order is $1,500, it's a lot of customer service and work. In today's day and age the margins are tight.”
Curtin says if you have enough personal customer relationships, it brings “steady, everyday business.”
“You get paid, you don't have a lot of bad debt,” he says. “Some contractors like to use distributors as a bank. Most industrials operate differently and are more likely to pay on time.”
Although the company does not currently stock a broad line of high-tech industrial controls, industrials can fill most of their other electrical product needs through Avon.
“We can get into a Long Island or New York City industrial by providing the next-day service they are not necessarily used to getting from their typical distributor,” he says. “They can buy their software or PLC elsewhere and buy pipe and wire, boxes and distribution equipment from us.
“Avon had all the lines. The business that we brought to them was similar product business but different accounts. To this day, a weakness that we have is in the hard-core, high-tech PLC business. Despite that, we did $10 million in sales in 2003.”
As the sales of the division grew, they were able to add more personnel. Hiring Dave Chant was a turning point. “He was a big key to our success,” says Oslinker. “Dave used to work for another electrical distributor. A good friend of mine who worked for an electrical contractor recommended him. We needed a very good inside salesperson. He probably handles about one-third of our inside orders.
“The second hire on the inside was Jessica Pucci. She had no experience, but we trained her to be an inside salesperson and she has been tremendous.”
Curtin says two other key hires were the additions of Jim Lehane as a technical specialist and Regina Kuhlman as an outside salesperson. Kuhlman came to Avon without any electrical experience, but Oslinker and Curtin saw she had the potential to excel. Lehane bridges the gap between some of the less complex products that Avon sells and the industrial gear requiring more technical support.
Curtin and Oslinker enjoy coaching new employees on the fundamentals of the electrical business. When explaining their strategy for finding, training and motivating employees for their team, they draw on another basketball analogy.
“There are player-coaches and there are coach-coaches,” says Curtin. “We are more like player-coaches. We aren't afraid to take a chance on someone, and we have put some risk in managing that. We are not afraid to roll the dice. That's what makes us different.”
Oslinker and Curtin believe Avon's industrial division can double in size. Some of that growth may come from the business they pick up through the integration of Avon's purchase of some of the assets of bankrupt Eltron Supply Ltd., College Point, N.Y., a specialist in energy-efficient lighting products' related systems, and the recent addition of Lisa Mackey and Dawn Marie Grossman, two area industry veterans who had been running recently closed Knickerbocker Electrical Equipment, Bohemia, N.Y.
With the help of Ted and David Schneider, previously Eltron's owners and now Avon employees, the company services lighting maintenance contracts and demand for these products by national accounts and energy service companies (ESCOs). It's a different business than Avon's core electrical emphasis, says Curtin, because much of the material is shipped direct to accounts across the United States.
Although the business emphasis of the Avon industrial division may expand into new niche areas like lighting maintenance contracts, Curtin says the basic principles of selling and customer relationships are still sound and have not changed since he started working in the electrical industry 20 years ago. He and Oslinker say e-business tools like the Web and EDI will supplement but not replace the efforts of the electrical distributor.
“Some companies like electronic transmission, but you still have to fill and ship the order,” says Oslinker. “The customer is not going to EDI you that they got the wrong material. They call and say, ‘I got six wrong ballasts. When are you going to get here to replace them?’”
Oslinker and Curtin expect to achieve their division's sales goals with the same focus on service fundamentals, and the loose atmosphere that permeates Avon Electrical, from the senior executives on down.
“Some of the chains are so formal in their approach. With our relaxed atmosphere, we produce more,” says Curtin. “It's all about writing profitable business. If (employees) are comfortable, they will produce. If people are happy, they will work harder.”
LIFE WITH WESCO
Avon Electrical retains the culture of an independent distributor even though it's owned by WESCO, one of the largest electrical distributors in the United States. Good-natured wisecracks between employees and the buzz of ringing phones fill the casual atmosphere at Avon Electrical's Hauppauge headquarters. It's the quintessential New York distributor.
Jerry Moskowitz purchased Avon Electrical in 1965 and moved it from Jamaica, N.Y., to Hauppauge, N.Y., in 1969. He was a well-known player in the New York electrical market for 30 years; he and the company were featured in a 1986 article in Electrical Wholesaling. Although Jerry Moskowitz died in 1990, his legacy at the company lives on through his sons, Lenny (left in photo) and Kenny (right).
Says Lenny Moskowitz, “My dad was a buyer more than he was a salesman. He really brought that to the table. A company is nothing without having an order, but the key to making a good order is buying it properly. That comes from relationships with factories and manufacturers' reps. We pride ourselves on our strong relationships with those people. That is what he taught us.”
Along with building what many industry observers believe is the biggest contractor house in the New York market, Jerry Moskowitz launched an international/export division in the mid-1980s. Lenny Moskowitz says that division's beginnings in many ways mirror the industrial division's conception.
“Back in 1984, somebody came to us and said he had his own business in the international market but was having difficulty financing it. He was looking for someone to partner with him, not unlike what we have done with Richie and Lance. We looked at a business plan that would not overlap at all with what we did, stuck our foot in that arena and grew that business.”
Lenny and Kenny Moskowitz took over managerial duties after the their dad passed away in 1990, and the company's sales nearly doubled during the 1990s. But taking the business to the next level was going to take more receivables, inventories and financial commitments. Enter WESCO.
“We were doing fine,” says Lenny. “But both of us had an appetite for growth. We liked the idea of growing a business larger and saw WESCO as a good opportunity to partner with a larger company that would help with financing.”
WESCO, which already had two branches in the area, was interested. In 1998, WESCO purchased the company, and Avon absorbed WESCO's two branches.
“It has been an interesting relationship since the company was sold,” says Lenny Moskowitz. “We grew up running an independent family-owned electrical distributor. WESCO is a large, national corporation with over 300 locations. We have maintained much of our independent operating style, and WESCO has supported our efforts to grow the business.”