Case Studies

Wholesale Millwork Inc.

Distributing diverse, high-quality millwork products

Alongside eight former coworkers, Joe Palencar founded Wholesale Millwork Inc. (WMI) in 2003, after working for 17 years at his father’s distribution company. When the business was acquired in 2000, Joe stayed on for another six months.

“I decided to go back to school to finish my undergraduate,” Joe explains. “I was trying to figure out the next step. After my non-compete agreement expired, I was approached by several former coworkers with the opportunity to start a new business. So I drew up a business plan, went to the bank and they loaned us the money; 11 years later, here we are.”

Joe brought two key people along with him as shareholders in the new venture: John Henneman and T.L. Wright. Together over the years, the team has built a strong distribution company specializing in millwork products. “Our business model is a little different,” Joe explains. “Our level of service and quality of product is higher. We have a good knowledge of the markets.”

Diverse products

WMI offers a broad range of products for new construction and renovations. The team distributes trim, molding, stair treads, rails and columns among other specialty products. Joe notes that approximately 70 percent of the company’s revenue comes from the sale of moldings.

“We tailor our products to remodelers, custom homebuilders and some tract builders,” he elaborates. This focus allows us to come up with the best product and service solutions for our customers. We try to have a diverse product offering. We focus on the independents; we don’t do business with the box stores, which may cause us to lose that focus.”

With five locations in the Mid-Atlantic United States, WMI covers customers in Pennsylvania, Delaware, Maryland and Virginia. The company acts strictly as a distributor.

Joe and his team are focused on product, which means finding and delivering value. “Our relationships with our suppliers are very important,” he explains. “We spend a lot of time investing in those relationships. We don’t want to just buy from the cheapest supplier. Our customers expect a certain level of quality that we need to uphold.”

To maintain a high level of quality, WMI purchases from a number of well-known suppliers. The company’s supplier lists includes: Fairway Building Products, for vinyl railings; Turncraft, for columns and porch posts; as well as Crown Heritage stair components.

Surviving in a changing market

While the recent economic downturn has proven challenging for many involved in the construction industry, WMI is on a path of growth. Still, growth comes with challenges. Balancing overhead with quality product and service levels is key, according to Joe. The business also has a high concentration of locations to service its geographic footprint, and although this increases warehouse expense, it allows the business to cut down on trucking costs and still maintain a high level of service.

“Our greatest challenge in this industry is aging,” Joe explains. “A lot of our employees are getting older. Trying to keep ownership in the hands of active employees is hard. What we are trying to avoid is remote ownership; that is people who are not active in the company making strategic decisions. We are making progress on that front, but it has been challenging.”

In the coming years, Joe is looking ahead to controlled, stable growth. As the business gains ground, the team is looking to expand the business’ geographic farther north and west. “We don’t see any radical changes coming up,” he clarifies. “We are looking into the Pittsburgh market, as well as parts of New York. That will be our focus over the next few years.”

Growing pains do not bother Joe. “Not much keeps me awake at night,” he explains. “We are a strong regional player. Most of our competitors are larger than we are; companies with nationwide footprints. There is always the perception of David versus Goliath and that comes with some anxieties, which may impact sleep habits. Those concerns, however, force us to be more efficient.”

Joe is reassured by his team, too. “We have a lot to be proud of here,” he explains. “We maintain strong loyalty to our customers. We appreciate that they want to do business with us. Of course, our repeat business is fueled by our great pool of talent. We have excellent employees.”

WMI is a people-focused business, just another attribute that sets the company apart from national suppliers. With strong communication, quality products and devoted services, Wholesale Millwork Inc. is proving that bigger is not always better.

Published on: July 9, 2014

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