Meet the Wholesaler: The Color of a Successful HVACR Career
Name: Michael Riley
Company: Riley Sales Inc.
Location: Plymouth Meeting, PA
No. of Branches: 6
No. of Employees: 66
Year Founded: 1968
Major Product Lines: Southwark, Atco, Certainteed, Hart & Cooley, Tru Aire, Honeywell, Allied Commercial, Ducane, Magic Pak, Frigidaire, Gibson, LG, Williamson
Please provide some background about your business and when you got involved.
Mike Riley: My father, Tom Riley, started in our industry as a manufacturer’s representative. He was successful; however, he found the problem with being a rep was that unless you had a great relationship with your manufacturer, you had to be an average rep to keep your lines. If you were too good and made too much commission, they put a factory salesman in your territory. If you were lousy, you lost the line. Wanting to have more control of his future, he became a stocking rep for some key lines and started Riley Sales in 1968.
Dad started working out of his home, with my mom as secretary, bookkeeper and receptionist. Using his one garage as his warehouse and Plymouth station wagon as his delivery truck, he was an HVAC supply house. This startup was probably similarly replicated by many other founding fathers of our industry. With the help of his brother, Dick Riley, they steadily grew the company.
One of the best companies he represented was Atco Rubber Products, which later became Atco Flex. Dad bought the flex and resold it to distributors up and down the East Coast. As a teenager, I spent many a summer and after school in our new warehouse loading trailers of flex and stocking shelves.
In the summer of 1983, while on summer break from the University of Arizona where I was a Political Science and Philosophy Major, I was working at Riley. Dad had to fire his warehouse manager for selling Milwaukee tools out the back door. The rest of the warehouse crew was not much better in character, so Dad asked me to clean house and hire a new crew. I hired a bunch of friends and completely revamped the operation. I had every intention of returning to U of A at the end of summer where I had a girlfriend, a car, an apartment and a year until graduation.
August came, and we were halfway through the revamp, and business was jumping. I was making more in a week than I did in a month in Arizona, so I agreed to stay until the end of the year. Around Thanksgiving, Dad sat me down and asked what exactly I was going to do with my Poly Sci and Philosophy degrees. “Improve society by working for organizations that help the poor and underprivileged” or something like that was my proclamation. He explained that there was no trust fund in my future. If I wanted to make enough money to give some away, I could make a good living working for him, and then I could become a socialist and save the world. Sounded like a good plan to me. Work was fun and rewarding, having some cash in the bank felt great, and the future looked bright. So long Arizona, goodbye sweetheart. I sold the old car, financed a new Camaro Z28 and rented a condo with a buddy. Hello HVACR! A capitalist was born.
I interviewed your dad some years ago, and I know he had an influential role in the company. Tell us how you mimicked him in some of your business approaches and where you differ.
Riley: My dad believed that you can’t have too much inventory or too many salespeople. “If we don’t have it, you don’t need it” was our slogan. The plan worked. He grew business as the sales force focused on the air conditioning and ventilation, or the ductwork side of our industry. Most competitors back then were plumbing and heating supply houses, selling boilers and furnaces. Central air conditioning was new, and Riley Sales would be the place to go for your supplies.
I came up through operations and had to find a spot and put away all of that product. I believed in having just the right amount of inventory. I was “turn and earn” before I knew what it meant. I also liked having knowledgeable salespeople who came up through the company and realized what it took to get orders in and out of the warehouse. A lot of those friends that were hired when I first started are our top salespeople today. They know how to deliver excellent customer service. We call it “Shift,” as in shift into the next gear when work gets busy. Don’t complain when there are too many orders or too many trucks to unload, because that means we’re making money.
His best advice, which might explain my compassionate inclinations, was to treat all people the same, be it a truck driver who was delivering product or the president of the bank that lent us capital. He lived The Golden Rule: “Treat people how you want to be treated.” Treat everyone with respect.
You received some attention recently for assisting with the first HARDI Homes for Our Troops build for helping Kevin McCloskey, a local resident [Philadelphia]. My understanding is that you jumped aboard immediately without even knowing the details. Why?
Riley: Talbot Gee is a Philly Boy, I’m a Philly Boy, Cpl. McCloskey is a Philly Boy, and the first home HARDI was going to partner with HFOT was in Philly. It was a natural fit.
I never served in the armed forces. Talbot called and told me about the program. He explained how HARDI was helping to provide a disabled veteran and his family with a debt-free home. I knew Riley had to step up to help those who served and sacrificed for the sake of all of us. This first home has been a long process. We are trying to get the process right so we help HARDI reach our goal of 100 homes, and each job goes a little smoother.
This home’s design calls for radiant heat as well as a heat pump and ERV. Riley is a duct house; we have the heat pump, duct, GRDs and ERV covered; however we don’t do too much radiant. Everyone involved agreed that given Kevin’s injuries, this type of heat would be ideal. I reached out to Scott Weaver and Jeff Thompson of APR Supply to help with this section of the project, as they are very successful with radiant. Just like Riley, APR jumped in right away to help, designed the system and provided all of the material.
Kevin and Bridget McCloskey are a great young couple and they are very appreciative of everything HARDI and all the trades are doing for them so that they can further enjoy their lives in their new home.
Put on your virtual reality glasses and tell us what you see for the industry in the next five or 10 years.
Riley: We’ve all talked about the coming trends, be it e-commerce, apps, Amazon, finding more talent, but I don’t know much more than the next person at predicting the future of the industry. However, as I am doing this interview today, Jan.20, even though I know it is for publication at a later date, Donald Trump is being inaugurated as our 45th president. With President Trump in office, who knows what to expect? I do know President Trump is a success story. Like him or not, he is successful. He’s a winner. Just ask him. He played real-life Monopoly, ended up owning Boardwalk and Park Place and somehow managed to go bankrupt four times but still won the game. That’s tough to do unless you are the banker, know the banker, or already owe the banker so much money they can’t let you fail.
Americans want to be successful again. They want to be winners. Winners feel good about themselves and their situation in life. Winners like to spend the money that they earned becoming successful. Successful people want to live in nice houses. People want to be comfortable in those nice houses. We sell comfort.
I think those trends bode well for our industry.
A few industry members are known for their characteristics. You wear some of the wildest and well-known shirts at HARDI functions. There must be a story here. Please share it with us.
Riley: Back in the day, it was more than shirts. It was boots, pants, shirts and hats. MC Hammer had nothing on me. It goes back to being a redhead as a kid. I had bright red hair. The hair brought me attention, and I loved it!
I also liked new-style clothes. I was a kid in the ‘60s. I was the first kid to wear bell bottoms and leather vests. As I got older I wore my hair longer; it got curly and wild. Now the girls loved it too! I added the three-inch platform shoes, nylon shirts and necklaces to my wardrobe.
Then I started to tap out on top. The long hair became a mullet, bad knees called for comfy shoes, an expanding waist line limited fashion choices. I cut the hair, wore soft shoes and relax-fit jeans but kept the shirts. Fun colors, cool designs with funky cuffs. I have a lot of fun wearing them.
Time took my hair, but it can’t take my shirts.
Some days must seem like a drag. What do you do to infuse yourself with an added dose of enthusiasm? In short, what do you do when you ask yourself: What’s the big deal?
Riley: Life is a Big Deal. Enjoy it! When I’m bored I go out and talk to someone. I grab an employee, a customer at the counter, the truck driver delivering more products to our warehouse to fill the shelves from the sales we made. I love talking sports, news, politics and telling politically incorrect jokes.
I kissed the Blarney Stone. Twice.
I’m raising three daughters, three teenage daughters. Mimi, Bridget and Keira. Two of them have my red hair. Two play three different sports, all three dance, and one has a boyfriend I’m not supposed to know about. They are my Big Deal, my enthusiasm. They keep me smiling, and like the song says …
“When you’re smiling, the whole world smiles at you!”
What’s your idea of the perfect vacation location?
Riley: The perfect vacation would be spending a week with a few friends, my beautiful wife Denise and three great daughters. We are on a hot island with a white beach, next to clear blue water. The ocean has six-foot waves that break after a long curl. After riding many waves all the way to the sand, I see myself relaxing with an ice cold cocktail in my beach chair while waiting for the sunset.
No boyfriends are invited.
If you hadn’t gone into the family HVACR business, what would you be doing today?
Riley: After Arizona, while contemplating if HVACR was the life for me, I was a very successful underwear model. It was fun and financially rewarding. But my career in briefs was brief, as moving to New York City or Los Angeles was the next progression, and I had too much going on in Philly.
All the things modeling requires, like hanging out with beautiful people, shooting in exotic places, looking good all day, are really tough. I think it would have been too much for me.
HVACR … it’s in my blood. It’s in my core. Instead of spending all day in my trunks, I sell trunk duct.
Do you go to college or high school class reunions? If so, why? If not, then why not?
Riley: College reunions are out. That scorned girlfriend is still out there — single, 50 pounds heavier, living on a ranch with a lot of firearms. She never forgave me.
I went to an all-boy, private, prep school (that’s why I thought I had a trust fund) and had many friends. I went to my 25th reunion and had a lot of fun. I caught up with some of my boys and promised to keep in touch.
I keep in closer touch with my grade school friends. We run a golf tournament to raise money for the Ronald McDonald House in honor of one of our classmates who died from a brain tumor when he was 26. A lot of my childhood friends, close customers and vendors come out and support the annual outing. Any time catching up with family, friends, classmates or business associates is time well spent.
When you meet a wholesaler in our industry who is not a HARDI member, what do you think?
Riley: When I first came to work for my dad, it took me a while to realize not everyone wanted to do their best. To some, “good enough” was good enough, by their standards. Not everyone wanted to work overtime to get the project completed or the orders picked for the next day. Not everyone wanted that promotion, to move to the next level in the company. I wanted to fire these guys and find people who did. Dad explained we need good warehousemen and truck drivers, not everyone wanted to be a counter or outside salesperson. Not everyone wanted to take on more responsibility to make more money. Maybe their spouse was the breadwinner, and they had to be home for the kids or coach a team or just go home and crack a beer.
To them, they were happy where they were at work and if they gave us an honest eight hours a day, that’s all I should expect. The key is to hire a mix of people, some with a long runway of potential, some content to stay right where they are.
We all have things in life that we do or don’t do that we know could make us better. Maybe it’s continuing to eat Philly cheesesteaks or Mickey D’s for lunch, not exercising to keep in shape, not volunteering in your community, or not sending thank you notes like your mom always had you do as a kid. We all pick and choose the opportunities in life we want to pursue and hope that we are the better for it.
HVACR wholesalers who don’t belong to HARDI must have decided that they don’t want get better.
I bet you they don’t send thank you notes either.
What’s the one question you wish that people (or the media) would ask you, but never do?
Riley: It’s a question, one asked for centuries, but now we have the answer.
“Michael, how would you achieve world peace?”
Air conditioning! Anyone who is living on this beautiful planet, at some point in the world, during the day or night it gets hot enough that they are uncomfortable, need to have air conditioning. If you get too hot, you get testy, you get argumentative. Try sleeping on a hot, humid summer night with no A/C. It’s a sticky, sweaty, don’t touch me, you ain’t getting any lovin’ kind of night. Now, after a night like that, what kind of mood are you going to wake up with, especially if you are facing another hot day. Tired, stinky and mad. Hot and bothered. Riled up!
When the same person spends the day in a/c and then heads to bed feeling good, their partner having had that same cool day, chances are a lot better they are going to wake up a lot happier. Happy enough that they want to just hang in the A/C and not go outside looking for trouble. Cool, calm and collected.
Installing all this air conditioning will require a workforce to accomplish it. That is the real solution. The world needs more jobs for people willing to work. Well-paying jobs, where the person working can feel proud of their salary. Wages that are sufficient to provide for their family.
The construction industry can provide those jobs.
Bring home the refugees that fled their bombarded countries in the Middle East to rebuild their cities and villages. Bring them back home to construction jobs that will offer a trade and provide a future for them, instead of joining radical religious groups because they see no future. Building air-conditioned homes, factories and offices. Back home in comfort instead of on the street fighting.
Construction jobs are important in the inner cities of North and South America and Europe. Once again, offer a trade to those who want to work. Rebuilding the infrastructure, rebuilding communities where manufacturing has left. Building homes for the new employees of the education, medical and technology companies that have prospered in these cities. Homes and jobs that are careers for people who want to get away from a cycle of drugs and violence.
Additional workforce, both home and abroad, can be found from the millions of illegal immigrants who are looking for a chance to become legal citizens. Like the Peace Corps, but this time a two-year stint working in a reconstruction zone earns you your green card. Work your way to citizenship.
Who pays for this?
The top 1 percent, who else?! However, not in new taxes, in new investment opportunities. American corporations, private equity funds, retirees’ pension funds that are looking to make more than the low returns that our slow growth economy has provided.
We as an industry can do more. HVACR represents $30 billion in annual revenue in the U.S. market.
Our industry is equal in revenue to the entertainment industry. But unlike a movie, show or song, our products don’t last a few minutes, or a few hours, they last a generation.
HARDI, run by Talbot Gee and his staff, has never been as dynamic as it is today. Jon Melchi has the ear of many in Washington, D.C., and with support of even more of our membership, we could influence even more people and policies.
Tom Perić is a public relations guru just waiting to utilize more of his ideas.
We make people comfortable. The world needs some comfort right now.
Let’s start a movement that will provide job training in the HVACR trade that will help us all move more product!
Air conditioning! It’s a cool idea.
Please share with us your worst and best move since you’ve been in business.
Riley: The worst move was keeping a half keg in the warehouse. Too many miss picks, too many air guitar riffs and not enough products being put away.
The best move was being one of the founding distributors of Blue Hawk, the premier HVACR cooperative in the world.
Dan Blier of Able Distributors in Chicago was the brains behind Blue Hawk. His vision was a co-op dedicated to HVACR, not being part of a plumbing buying group backing into our industry. He met with the right people in the co-op space to set it up, but he didn’t know enough people to get it moving.
I never had the smarts to figure out a co-op, but I knew a lot of people in the industry and have never been bashful about asking someone to try something new. So we all split up responsibilities and we starting calling fellow wholesalers and vendors and asked them to fly with the Hawk. Blue Hawk took flight.
Lance Rantala and Colleen Leppert, along with an excellent staff, have done a great job running the co-op for over 10 years now. Most that have joined Blue Hawk have been very happy that they did.
I know I am one happy bird.