There are many requirements for distributors operating today and, as industry variables shift, challenges require a complex response. For many, that means recent years have brought big data, tariff strategies — even AI plays.
But if you asked the average independent why their customers do business with them, the answer is usually much more straightforward: they make it easy for their customers to buy.
Quinn Ellsworth, director of sales for fluid handling products distributor John M. Ellsworth Co. Inc., summed it up succinctly when asked how his company has been able to maintain its position in a competitive industry: “People know that we have a knowledgeable sales staff, hold a lot of inventory and ship quickly.”
Building Out an Inventory Hub
A few months back, the company broke ground on a 55,000-square-foot project that expands the business into the lot next to its existing headquarters. With the build underway, JME hopes to move in before the end of the year and use the space to boost its capabilities and staff, which currently includes 80 employees and a 100,000-square-foot facility.
Part of the distributor’s need for space comes down to its focus on inventory. The company boasts more than 100,000 SKUs and holds $10 million in inventory at a given time — a dollar value that’s up three-fold from pre-pandemic volume.
Quinn, the son of company founder John Ellsworth, credits a fortuitous series of events for JME’s ability to offer inventory above and beyond what its competitors have. In Q1 of 2020, the company was on the verge of starting a building addition at its Milwaukee headquarters. Of the 30,000 square feet planned, about half was earmarked for a renter. When the pandemic hit, the renter backed out, but the ball was already rolling. Looking back, Quinn sees it as a fortunate circumstance that the project went ahead; by 2021, JME had taken on so much inventory in response to customer needs that it was already onto its next addition. Meanwhile, it was able to serve as a critical partner at a time when sourcing had become a nightmare for many end customers.
“We decided to aggressively and proactively order inventory, earning a lot of new customers by having product in stock when other’s were out,” Quinn said.
Since then, the focus has been on maximizing space to “continue riding the wave.”
“The more inventory we have, the faster we can service our customers,” Quinn said. As part of its go-to-market, the company claims that odds are “very high” that JME not only has the buyer’s needed products in stock, but that they also have a better price and can get the product to the customer faster than other suppliers.
Figure It Out and Keep Going
He also sourced talent – local high school students studying IT – to help him create a website. This early attention to the emerging digital age meant JME was ahead of the game and, as an early adopter of Google AdWords, was able to sell effectively online before many of its competitors.
Since then, the company has taken its digital strategy in-house, with a team fully focused on digital marketing and promoting key brands.
Being able to adapt to a changing industry seems to be a core competency for JME. According to John, while the transition from line cards, mailings and landlines to email and the internet – and, now, AI – was significant, “the tools keep changing, but the job stays the same.” For JME, that means taking care of customers, showing up when it matters and moving forward no matter what gets thrown their way.
In response, family support has been consistent. Besides John and Quinn, the elder Ellsworth’s brothers serve the business – Tim as vice president and Matt as head of JME’s loading systems division – and Quinn’s brother Charlie sells, develops new products and is part of the management team.
“We’ve been through oil crashes, recessions, the 2008 meltdown, COVID — you name it,” he added, “but we’ve always figured it out and kept going.”
Current Challenges
Finding ways to figure it out and keep going has been a plague for businesses, but Quinn believes the challenges level the playing field.
“Whatever is going on, it’s affecting everyone the same,” he said of recent uncertainties around tariffs. He believes JME is a bit insulated since it prioritizes brand name products which “are primarily domestic.” Recent years have brought efforts to diversify outside of China and “we’re trying to be smart about sourcing.”
The company believes its role is to reduce downtime for customers, and that comes with having knowledgeable salespeople and the highest-quality items in stock, as well as specialized services such as hose assembly. The company also ensures product quality by pressure and static testing hose assemblies in-house, with the goal of maintaining quality components viewed as both a challenge and an opportunity.
The Value of Independence
Quinn also observed the role of private equity in the industry, as well as the role it’s been playing in distributor consolidation. Although this has been a highly impactful variable for many of its peers, JME is committed to growing organically, said Quinn — “slow and steady” by “selling existing customers more, new and better products and finding new customers.”
For John, remaining independent all these years is not only a source of pride, but a strategic advantage.
“In a market where private equity is buying up competitors left and right, we’re still a family-run business that answers to our customers, not investors,” he explained. “That gives us the freedom to make long-term decisions, not short-term plays.
“We’ve built something solid, and we’re not interested in selling out just to chase scale. Sure, we’ve had to adapt – work with four generations of employees and figure out new ways to communicate – but at the end of the day, staying true to who we are is what’s kept us in business all these years.”
