It's no secret that to succeed in distribution today, you've got to be flexible—especially when it comes to serving your customers. If a customer wants to see a field sales rep every week, you'd better have one available. If he wants to flip through a catalog and phone in his order, you've got to provide that option, too. And if he happens to be technologically savvy—well, your electronic ordering capabilities had better be up to snuff.

This flexible approach to doing business is par for the course at Interline Brands, a company that considers itself a "new generation" MRO distributor. In many ways, Interline Brands is taking the best of the old school and combining it with the best of the new to create what it believes is one of the best approaches to serving today's marketplace. Priced catalogs, outbound telephone sales reps and electronic ordering are among the firm's chief attributes. At the same time, the company hasn't abandoned such tried-and-true practices as traditional field sales and customized service programs.

The melding of these practices gives customers the flexibility they want and the quality service they demand, say executives at Interline Brands, which sells MRO supplies to the multi-family housing industry and to plumbing, HVAC and electrical contractors nationwide. Interline also sells to the industrial and general construction markets as a second-tier distributor to large integrators, a growing portion of its business.

"If you look at most distributors, they're typically strong at one thing—field sales, branch-based business, integrated supply, etc.," says Mike Grebe, president and chief executive officer of the Jacksonville, Fla.-based company. "But we have a broad range of capabilities. We've got almost 400 field sales reps; 200 inbound and outbound telesales reps; we produce about 5 million direct marketing pieces per year; and in some markets we're an integrated supplier…So, the first strength, and the biggest strength, of this company is the fact that we have these multi-sales channels. We can service our customers the way they want to be serviced."

The second strength, according to Grebe, is Interline Brands' multi-brand marketing strategy. The company targets different vertical markets through eight "brands"—essentially, direct marketing catalogs of MRO supplies. For example, the firm's Wilmar brand sells to the multi-family housing/apartment industry, and its Barnett brand targets plumbing and HVAC contractors.

"We can penetrate different vertical customer segments with a very tailored product offering, a tailored catalog, and specialized service," Grebe explains. "And we're doing it from one common logistics and technology platform."

Interline's eight brands operate under one corporate umbrella, functioning on a single, proprietary software system and shipping products from a single warehousing and distribution network.

Interline Brands was formed through a series of mergers that combined more than 20 companies in the plumbing supply or facilities maintenance industries. In 2000, the company's two largest units, Wilmar Industries and Barnett, Inc., came together to form a $600 million firm with nationwide service to facilities maintenance customers and plumbing, HVAC and electrical contractors. Wilmar brought a strong field sales organization to the table, and Barnett brought expertise in direct mail and outbound telephone sales. Both companies had acquired their share of brands along the way, each focused on a particular vertical market.

Today, Interline continues that acquisition strategy, buying companies that are either brands unto themselves, or that fit the profile of one of its existing brands. For instance, last year's acquisition of Florida Lighting was a brand buy, as it came with the SunStar catalog, which targets lighting contractors. Branded companies retain their names; add-on acquisitions take on the identity of the existing brand.

No matter which category a purchase falls into, however, it likely fits the description of a "new generation" distributor. In other words, priced catalogs, outbound "telesales" and electronic commerce figure prominently in its market strategy.

"We feel those are the channels of the future," says executive vice president Bill Sanford, who's been with Interline since 1999. He and Grebe led an investor group that took Wilmar private in May of 2000 before making the Barnett acquisition. "Ninety percent of distributors are using un-priced catalogs, field sales reps, and multiple local branches… Instead, we've gone to priced catalogs, we produce about 5 million pieces of mail we send to customers and prospects each year, and half of our customer relationships are through telesales reps."

Interline Brands does approximately $150 million a year in national accounts business, serving those customers through both its telesales and field sales networks.

Long before Wilmar and Barnett merged, Grebe and Sanford envisioned forming a large distributorship that would address a trend among MRO buyers: the move toward vendor and product consolidation. As Grebe explains it, they realized that MRO buyers wanted to buy more products from one source, but didn't want to sift through reams of paper describing the kinds of products they didn't want. The custom-catalog approach seemed the best way to address those issues. The plan was to serve select end-user markets with product and service catalogs tailored to their needs.

"We knew from experience that in order to execute this strategy we would need to create a platform where we could operate different brands and maintain the brand equity that an acquired company has with its customers," Grebe says. "There's an old saying: Your most important assets go home every night."

Sanford and Grebe wanted to retain the relationships the acquired companies' people had formed with customers, while leveraging the technology, logistics and buying power that come from being part of a larger organization. Wherever possible, Interline Brands leaves the customer interface of the acquired company alone, matching the customers' needs to Interline's existing systems.

"We typically try to leave those key customer issues the same—or enhanced—but integrate the company into our system, so they can take advantage of our added capabilities," Grebe explains.

Interline Brands' proprietary IT system is augmented by other software packages used for certain functions. The company uses E3 software for inventory management, for example.

"We're willing to make investments and upgrades when there is external software that can do it a lot better than we can ourselves," Grebe adds.

In addition to the common IT platform, the company's warehousing and distribution network ensures that all products are picked, packed and shipped from the same bin, so to speak, no matter which brand they are being sold under. When a new company is acquired, its inventory and distribution functions are folded into a centralized system, with the goal of reducing its operating costs. Interline's fleet of 160 trucks deliver 30 percent of the company's orders; the rest are shipped via UPS and other third-party carriers.

"Having that strong information systems backbone, and that strong open architecture system, was really a foundation that enabled us to do multi-brand marketing, and have this approach to our customer base," Grebe says.

With 56 locations and more than 2,200 employees, Interline Brands has a significant presence in the MRO market, ranking No. 12 in INDUSTRIAL DISTRIBUTION's recent report on the largest industrial distributors in North America. But that doesn't mean it serves only large customers. Sanford and Grebe explain that part of Interline's strategy is to maintain the ability to serve a wide range of customers. Thus, the multi-sales channel approach they point to time and again.

"One of the beauties…of having a company that has multiple sales channels is that you can target your customer efforts from the very small customer to the very large customer," Grebe says. "Yes, we have a lot of customers that are small contractors with one truck. By the same token, we have national real estate investment trusts that we have multi-million dollar relationships with. And we'll provide a wide range of services for those very small customers as well as those national accounts."

Bob Minkert and Blake Ingram can attest to that. Minkert is president of Mr. Rooter Plumbing and Citywide Electric, a 41-employee plumbing and electrical contracting business based in Atlanta. Ingram is vice president of strategic sourcing for Oakwood Worldwide, an international property management firm. Though they fall on opposite ends of the customer spectrum, each counts Interline Brands as a valuable business partner.

Mr. Rooter/Citywide Electric has been buying from Interline for seven of its 10 years in business, working with the Barnett brand. The company buys plumbing and electrical supplies that are used to fill 20 service vans covering greater Atlanta. About a year ago, a Barnett rep came to Minkert and asked how he could get more of his business. Minkert explained that he needed to find a way to better manage and control inventory. The result was a just-in-time inventory management program, in which Interline/Barnett monitors inventory usage in the company's vans, replenishing supplies on a weekly basis.

"We reduced our inventory in house by about $40,000 and eliminated the need for a full-time parts manager," Minkert says. "That's a big savings for us."

Minkert says he's impressed not only with the savings, but with the customer service levels he's received from such a large distributor.

"You can have any number of companies walk through your door to try and sell you product. To me, that's the easy part. What makes the difference is customer service, and having a salesman, frankly, that cares about what's going on in your operation," he says. "That's really where they've hit home with us. From top to bottom, they've worked hard to earn our business."

Ingram has similar sentiments. Oakwood Worldwide has been doing business with Interline's Wilmar brand for 10 years. The companies formed a partner agreement about a year and a half ago, in which Interline/Wilmar supplies MRO products to Oakwood's locations nationwide. As a national account, Oakwood takes advantage of services such as detailed reporting on business activity, which helps identify savings opportunities for both companies. An incentive-based contract helps both sides try to achieve those savings. For example, by hitting a target order size, Oakwood can receive a rebate on its Interline purchases across the board. This helps the customer, but it also helps reduce shipping costs for the distributor.

Ingram, a former national accounts executive with W.W. Grainger, says he uses Interline Brands as a model for forming national accounts programs with suppliers of other products.

"I would say that [Interline] really is our poster child of success," he says. "They've figured out that some customers are cheaper to serve than others, so they can build a cost structure that allows them to be more flexible…It's really forced them to be more creative in terms of how they look at their business, and how they service their customers."

Interline Brands spent much of 2001 through early 2003 integrating some of its larger acquisitions, particularly Barnett, Inc. Now, the company is refining its national accounts business while staying focused on growing geographically, adding new product lines, and expanding both its field sales and telesales networks. The company recently hired Marty Daley, formerly of distributor network InduServ Supply, to head up efforts to build a master distribution business. Interline will sell secondary products—plumbing, hardware, electrical supplies, etc.—to integrators in the industrial supply and construction markets. Less than 20 percent of Interline's business today falls under the master distributor umbrella.

The company will also continue its private labeling program; 25 percent of its products fall into this category. Sourced from Southeast Asia, the private label products encompass everything from plumbing fixtures to power tools.

As a public-reporting entity, Interline Brands is tight-lipped about future goals and strategies. Executives will say little about the year ahead, except that the strategies put in place are expected to ensure a successful future for the company. Nonetheless, the firm's multi-channel approach to business seems to be working. Since 2001, Interline has ranked among the top 20 companies in INDUSTRIAL DISTRIBUTION's annual report on the largest distributors in North America, ranking No. 18 in June 2001 and holding steady at No. 12 in 2002, 2003 and 2004.