There’s riches in niches: New South Construction Supply focuses on what it knows best

In 1985, with an “itch to run my own show,” Sobeck took over a BMA subsidiary called Enterprise Computer Systems, a company that sold systems to lumberyards and contractors. He was president at Enterprise until he left to form ChanneLinx in 1999, which was later sold. He then bought New South Construction Supply in 2001.

“I’ve been in roofing, manufacturing, wholesale distribution, then software, and then back to my roots in distribution,” Sobeck says. “My background has served me well. Most anyone here in our company, I’ve basically done their job.”

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Growth

Sobeck has grown New South from five to nine locations. Now based in Greenville, S.C., the company was originally headquartered in West Columbia, S.C., about 100 miles south of Greenville. A few years after Sobeck purchased the company, he moved its headquarters to his adopted hometown of Greenville.

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With nine locations in three states, New South has trucking authority on its own trucks in seven states, and uses other companies to ship to 31 more states. Perhaps more impressive are its deliveries to 12 foreign countries via shipping containers.

“We have a customer who builds most of the U.S. embassies around the world,” Sobeck says. “Everything but the concrete and steel needs to be sourced from the U.S. for security purposes.”

That’s where New South comes in. Sobeck’s company rounds up the materials and ships them to the contractor, who then ships them to the foreign countries. “I’ve had to Google the name of some of these countries to find out where they are,” he says with a laugh.

The biggest growth opportunity for New South right now is the fact that the company is “in the hottest construction market in the U.S.,” Sobeck says of his South Carolina location. The company is located near three of the lowest unionbased states in the country, he says, which is bringing in a lot of business. “There is the largest BMW plant in the world 20 miles away from Greenville, a Boeing plant, new Volvo and Mercedes plants. Ohio used to be the tire capital of the world. South Carolina is now, and we have five different tire manufacturers.”

Because of his company’s proximity to coastal communities where vacation and retirement homes are booming, New South has “more opportunities than we can shake a stick at.” With all that opportunity in his own back yard, Sobeck is focused on growing in place.

“Two of our locations are near maxed out. Seven have the opportunity to double or triple. Why would I want to add more locations and overhead?” he says.

New South employs about 80, and to Sobeck, it seems as though the company is constantly on the lookout for CDL drivers. Half of the drivers now are from temp firms, he says, which helps alleviate some of the high turnover of the position during the current nationwide driver shortage.

“There are drivers (around the country) quitting without notice. They’re filling up at a truck stop and a recruiter approaches them offering $2 an hour more and they quit on the spot.”

In other positions, Sobeck says, he has learned that paying well above average results in lower turnover. Another big contributor to employee retention at New South is its college intern program. Like a farm team in baseball, Sobeck says, their hiring of college interns fuels the company’s Manager in Training program. Currently, four of nine branch managers at New South are under 30 years old.

“We hire them right out of college before they develop bad habits someplace else,” he says. Within 12 to 18 months, a qualified candidate can work his or her way into a manager position. They do so by working their way through every role at the company, from warehouse to forklift certification and from deliveries to CDL licensing and then behind the sales counter.

By the time they’re a manager, they’ve done every job in the company. Sobeck likes his managers to have that broad range of experience because it’s also what makes up his own background. As CEO, he sets an example by still going on sales calls. He and his wife (who doesn’t work in the business) have even made deliveries periodically.

Service

All of the cross-training at New South has led to exceptional levels of customer service, he says. Three of the company’s top five customers buy 100% of their supplies from New South.

“People buy on price, but they quit you on service,” Sobeck says. To make sure they’re not quitting on New South, the company focuses on creating “customers for life.” Part of this focus has led the company to establish a delivery guarantee.

“Everybody says they have great service, but we put our money where our mouth is. We issue a credit of 10% of the amount of any delivery that is more than an hour late.”

Sobeck and his team also analyze the lifetime value of a customer and do what it takes to retain that customer. Even if it means admitting you’re wrong when you’re not, you do it to save the relationship and to create lifetime customers, he says, when sharing an example of a customer who claimed an order was wrong, when in fact the customer himself ordered the wrong product.

“I had to fall on my sword because you can be dead right and still be dead. It’s hard to apologize when you’re right, but I swallowed my pride and ate a $7,500 problem that we didn’t cause. It ended up creating a customer for life.”

Data-driven

Sobeck says he is “very blessed” to be able to work with his son, Jimmy Sobeck, who serves as VP of Finance & Administration of the company. The younger Sobeck leads the company’s growth in analytics.

“He’s better educated and smarter than me. He has a Master’s degree in industrial distribution and he’s been putting together dashboards that we use internally and externally,” Sobeck says. Customers are assured of on-time deliveries via customerfacing dashboards that show the percentage of deliveries that go out same day and are on time. “Talk is cheap until you sit down with a customer and pull out your iPad and show all the on-time deliveries you’ve done for them.” The company also keeps a supplier dashboard to track incoming inventory and service levels from suppliers. “Knowledge is power,” Sobeck says. “In the 21st century, you’ve got to make data-driven decisions. We have data to support every decision we make.”

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