Standing Out as an Independent

The reasons behind the consolidation of North America’s distribution industry are many and varied: smaller distributors can fall victim to a range of ever-increasing market pressures — or simply tire of competing against much larger rivals. In some cases, however, company owners need an outlet when a next generation of leadership fails to materialize; the list of regional distributors that began seeking out an acquirer as their executives neared retirement would be quite lengthy. For Zack and Jason Gerin, however, there was no question about what would happen to the company started by their grandfather thousands of miles away as their dad approached the next phase of his career.

From left: Jason, Barry and Zack Gerin.PM Industrial SupplyThe Gerin brothers recently became the third generation of their family to run PM Industrial Supply, a Southern California metalworking distributor approaching its 70th year in business. Like their father before them, they came to work with their dad as boys — and grew to love what their family had built. “The more and more I got involved, the more I realized that it’s something I wanted to keep being a part of,” said Jason Gerin, the company’s warehouse supervisor.

Remaining an independent distributor, of course, has its challenges, but the Gerins insist that it has its advantages, as well, and the company’s new leaders say they want to continue to build the business for the fourth generation — even as the company, its former top executive said, is “unrecognizable” from when and where it started out.

‘He Always Wanted to Come to California’

From left: Zack Gerin, Mark Gerin, Barry Gerin and Jason Gerin, shown in 2012.PM Industrial SupplyThe story of PM Industrial begins with an even older distributor. In the 1950s, Mark Gerin worked as a sales rep for Sid Tool Company in New York – which would eventually become industry giant MSC Industrial Supply – said Barry Gerin, his son and, eventually, the second-generation leader of PM Industrial. In 1956, unsatisfied with the money he was making at the time, Mark quit — instead, he began buying job lots, then driving to other locations in New York to sell them.

“Ultimately, he opened his own little — call it a warehouse,” said Barry, today the company’s chairman. “It was a storefront in Brooklyn and, ultimately, he took on a partner and started growing.”

Long before even his time at Sid Tool, however, Mark Gerin had visions of the West Coast. Barry said that young Mark “used to run away to California, if you could believe that.” In 1969, following the passing of his mother-in-law, Mark’s wife – Barry’s mother – agreed to move the family, and the business, some 2,800 miles west. “He always wanted to come to California,” Barry said.

Strength in Independence

The company set up shop in the Chatsworth neighborhood of Los Angeles and began selling to end users in the San Fernando Valley. Gradually, the business grew — adding new product lines and an outside sales rep at first, then increasing its inventory and building to a staff of over 30 employees serving metalworking companies in Southern California. Despite its growth, however, PM Industrial and its lineup of cutting tools, coolants and machine shop supplies faces a new slate of challenges in an era of seemingly constant consolidation in the distribution sector. Zack Gerin, the company’s new president, said that PM Industrial today finds itself in more intense competition — not only on price, but on product lines.

“Ten or 15 years ago… we would deal with our suppliers and have access to certain lines that maybe were exclusive,” Zack said. “As more and more independent distributors got consolidated, it’s become harder for suppliers to give that exclusivity to the distributors.

“We’re finding that we have to compete a lot more than we had in the past on lines that we’ve brought up, we’ve introduced to the market.”

On the whole, however, Zack said that remaining independent has been “a big strength” that has helped the company stand out in the market — “keeping our core competencies of service and support and technical knowledge with our team.

“We’ve found that as other independents get absorbed into the bigger companies, they’re looking for cost savings and streamlining operations, and we’ve heard from customers and suppliers that it takes a lot of the personal touch out of the service that those suppliers or those distributors were providing,” Zack said. “We still have that personal touch and those relationships. Customers can call us. They can ask for the customer service rep that they’re used to dealing with, and get that support right away.”

Not Only a Supplier — a Strategic Partner

As he takes over the helm of the family business, Zack Gerin said that the company plans to lean on those service capabilities as part of a broader effort to continue PM Industrial’s trajectory of profitable growth. The company added its first sales manager within the past few years, which enabled Zack and Barry – who has since largely stepped aside from managing day-to-day operations – to focus more on strategic initiatives as the company approaches its eighth decade.

“Over the past, I would say, 10 years, we’ve been working hard on just improving the company — not just growing, but improving operational efficiencies and trying to build the company to be able to handle more business,” Zack said. “We’ve grown a lot without having to add as many resources because we’ve been focusing on improving efficiencies, whether it’s expanding our vendor-managed inventory program, reducing the number of transactions – consolidating transactions – and trying to take a lot of the load off the operation while still growing.”

More product offerings and, in particular, service capabilities could help maintain relationships with customers, Zack said, “as price competition becomes more and more of a challenge.” The company is currently developing a coolant monitoring and maintenance program — one way to help customers see PM Industrial as “a strategic partner, not just a supplier.

“We’re always looking for new ways to add value to the customer,” Zack said. “We don’t just go to customers and say, ‘Hey, we can give you this for cheaper than what you’re buying it for.’”

Barry Gerin, shown in the early 1980s.PM Industrial SupplyThe company, a longtime member of the Industrial Supply Association, also seeks to maintain strong relationships with its suppliers, as well as with fellow independent distributors, many of whom operate in different regions – and therefore don’t compete directly with PM Industrial – but face the same challenges, said Barry Gerin: “How do we compete with pricing against the big guys? Inventory against the big guys? Customer service against the big guys?”

‘The Greatest Joy’

Above all, for the Gerin brothers, the business became a place that they wanted to be — and they want to keep it that way for their families and their employees, many of whom have been at PM Industrial for their new bosses’ entire lives.

“A lot of people here have been working here for a long time,” said Jason. “And that just shows how nice it is here.” Zack joked that “it’s only a matter of time” before the next generation of Gerin kids starts coming in on the weekends, just like they did.

“I think my dad’s done a good job of building up a company made of really strong, really good people with a good culture of working together, and it’s kind of got a good family atmosphere working here,” Zack said. “Even as we grow, like I said, we’re over 30 employees, but everyone’s really close and there’s a lot of chemistry working here, and so it’s a really good, positive place to work.”

Mark Gerin, shown in the 1990s.PM Industrial SupplyBarry Gerin, meanwhile, said that as the company his father started shifts to his children, there’s been “nothing more satisfying” than working with Zack and Jason — then, ultimately, watching as they build the business beyond even what he could do.

“I don’t have the capability that Zack does: he went to school for this; I [just] worked for my dad,” Barry said. “But it’s just the greatest joy to come in, and the boys are there. I’ve just always loved it.”