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Tel: (678) 775-4660
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Tel: (281) 661-8401
Tel: (877) 836-6678
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Tel: (323) 562-3440
Tel: (800) 826-3636
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QUALITY, INVENTORY AND SERVICE DRIVE VAL-FIT

BY MARY JO MARTIN
Editorial Director, The Wholesaler Magazine

Honest, straightforward business dealings have been the hallmark of Val-Fit since the company was founded in Los Angeles in 1979. Still 100% owned and operated by members of the Grinberg family, Val-Fit now operates from two stocking facilities that total approximately 200,000 square feet of covered warehouse space.

For many years, Val-Fit was a regional master distributor with a single stocking location in Calif­ornia. When the Grinbergs began growing the business at a more aggressive pace in 2004, they felt it was important to increase their already substantial inventory by opening a second location in Atlanta. They also capitalized on the additional warehouse space by not only increasing the amount of A and B type product they carried, but also adding more complementary C and D items.

Val-Fit got its start specializing in carbon steel buttweld fittings, flanges and forged steel, in sizes from 1/2 inch to 60 inches and wall thickness starting in Sch 10 through XXH, with flanges that range from 150 to 2,500 pounds. Their forged steel fittings and outlets inventory includes material in 2000-, 3000- and 6000-pound ratings. In addition to a full line of A and B commodity products, Val-Fit also carries special items such as crosses, reducing elbows, stub ends, reducing flanges, orifice flanges and long weld neck flanges. Val-Fit will source other products for customers who want to buy a complete list of materials from a trusted source. This can include products such as pipe nipples, swages, valves, barred tees, galvanized product and AWWA flanges. The company also offers specially machined products with quick delivery times.

Recently president Gyl Grinberg and executive vice president Roy Grinberg spoke at length with editorial director Mary Jo Martin about what they believe are the benefits of doing business with Val-Fit and the future direction of the company. The Grinbergs are very optimistic about the future for Val-Fit – believing there is still room for additional, substantial growth by adding other locations and product lines.

MJM: Do you strictly sell through wholesale distribution? Why is that important to you to maintain?

Gyl Grinberg: Yes! We continue to only sell through wholesale distribution. All master distributors make this claim, but many still sell to a variety of end users. We fully believe in the master distributor model and we are quite content in solely dealing through distributors. I am proud to say that many of our customers send orders for direct shipment to their customers (end users) having complete trust in Val-Fit. We train all employees on how to deal with end user inquiries and we try to refer any end users that contact us to a list of distributors in their area.

MJM: Describe the focus you put on employee training to ensure their ability to assist customers?

Gyl Grinberg: Selling fittings and flanges in many ways is like selling a strict commodity product where there are not many identifiable differences or advantages versus the fittings and flanges sold by our competitors. It differs tremendously from selling a technical product, such as valves, that has a variety of differences and patents. We train our employees on all relevant specs and how these change among different products and size ranges. They also have a wealth of information regarding diagrams of products, chemical compositions, yield strengths for different materials, etc. Many end users ask our wholesaler customers questions regarding certain specifications, and our staff is very knowledgeable at helping solve these issues. Furthermore, we have documentation on many hot topics such as the new “Buy America” provisions that have caused so much confusion in the industry.

MJM: Is much business conducted through your website or is it more informational?

Roy Grinberg: Our website is purely informational. We are planning a complete overhaul of our site in the coming year trying to offer more added value to our customers. We might incorporate some guidelines for pricing reference, but we will continue to have our sales staff receiving and approving orders. We don’t want to lose our relationships and we certainly don’t want to lose the ability to be flexible given specific customer needs.

MJM: How many SKUs do you typically stock?

Roy Grinberg: We heavily stock about 8,000 SKUs, but we also have a smaller inventory and factory direct shipments of many products, bringing our SKU total closer to 20,000.

MJM: What sets your company apart from its competition?

Gyl Grinberg: I believe Val-Fit’s ownership has many very unique, long-standing relationships with numerous players all over the world. As proud as we are of Val-Fit’s 30-year existence, it is still our youngest company within the group! My father, Ismael Grinberg, is now 85 and has been in the steel industry for over 60 years. He remains very involved in the business in Mexico. Our main distribution business in Mexico (Tuvansa) is a PVF wholesaler that was started in 1956. We also used to own a buttweld fitting manufacturer (Empresas Riga) that we sold in 2001. With our mill, we used to sell to master distributors around the globe, including many of our current competitors in the U.S. In Tuvansa, we sell to the Mexican end user market while sourcing from mills and master distributors in Mexico and the U.S.

What I’m trying to show you is that not only have we been in the industry for over 60 years forging many relationships along the way, but we have also lived many different roles. This gives us a great understanding of our product, our customers and our vendors. At Val-Fit, we know exactly the issues facing our factories because we had a mill just like them! Likewise, we fully understand all the issues facing our Val-Fit customer base since we have a wholesale distribution business in Mexico that sells to the local end user market. This perspective and understanding goes a long way in developing relationships and helping us adapt to vendor/customer needs. Furthermore, these relationships ensure that we can source quality product at very competitive prices.

MJM: Describe the relationship you have with your foundries and the importance you put on quality?

Gyl Grinberg: Quality is extremely important, and sometimes very difficult to identify when it comes to commodity products such as fittings, flanges and forged steel. Many people believe “an elbow is just an elbow,” and so they will take the most economical option available since quality issues often cannot be determined visually. Most quality problems will show their ugly face during actual installation and/or line operation. This can be extremely dangerous.

Val-Fit will only buy from ISO-9000 approved factories that have passed through our own quality checks and personal run-through audits. Our long-standing relationships and experiences help this process tremendously. Having owned a factory ensures that we know all the “ins and outs” of manufacturing — making our analysis very detail oriented. Most of our current mills have been selling to us for decades, and that certainly adds to the security and continuity of product quality. Apart from the extensive liability insurance Val-Fit carries, we also require our vendors to carry their own liability insurance. Finally, if we start to see quality issues from a vendor, we will cut ties with them completely.

MJM: Is today’s economy creating even greater demand for master distributors, as wholesalers are trying to cut back on their inventory overhead?

Roy Grinberg: Yes it is. Many wholesalers got caught — as did master distributors — with extensive tonnage of high-priced inventory, making 2009 and 2010 very difficult years. Buying product from overseas vendors can be quite challenging due to long delivery times, full container loads, pricing volatility, and overall international trade intricacies. Many wholesalers have determined that it is more efficient for their companies to have a smaller inventory while relying on master distribution as part of their sourcing, instead of trying to manage large inventories and all the associated problems and risks that go with it. In addition, we require no minimum order quantity, and proudly serve our customers from the largest to the smallest orders.

MJM: What is more important to your customers — quality or price?

Roy Grinberg: Well, price has always been a very important factor, but this recession has really made it the driving factor. We have never seen such pricing pressure. Also, I think customers have come to expect quality as a given and try to source product based on price. At least at Val-Fit, our customers expect quality with every shipment, regardless of the negotiated price.

MJM: What can a customer expect when placing an order with your company?

Gyl Grinberg: Obviously, our customers expect a quality product priced competitively. More importantly though, wholesalers have grown used to a total service package from Val-Fit. We offer 24-hour service, MTRs free of charge with every shipment, machining capabilities, and same-day shipping on most sensibly sized orders. We have friendly customer service personnel who bend over backwards to help solve any issues our customers might encounter. When requested, we ship products from specific countries of origin and can pack crates according to customer specific procedures.

An overlooked advantage we offer wholesalers is great freight rates. We do so much volume with freight lines that our discounts are quite deep. If we need to ship a small order that is not freight allowed (anywhere in the country), we get competitive rates that make the transaction very affordable. The freight savings are completely passed on to our customers.

MJM: What do you see as the future of master distribution?

Gyl Grinberg: We believe there will always be a need for master distribution, given all the inefficiencies and sourcing difficulties within our global industry. A master distributor really adds a great deal of value to the supply chain. I’m sure many important changes will affect the way we do business, but the overall model should not change drastically.