Founded in 1988 by John Wiborg, the company CEO, Stellar has risen from being just one of 14,000 industrial supply suppliers in the highly fragmented American industrial distribution market to leading the way in customer support, the epitome of a mutually beneficial customer-supplier relationship.
Looking back, John Wiborg reflects that he always had a clear idea of what he wanted to do. “After a brief time of working in investment banking and mergers and acquisitions in New York City, I decided that this was not the right environment for me. I wanted to be part of a team that would develop a growing business.”
“So, in 1988, I decided to return home to the Northwest and ventured into industrial distribution. I bought a poorly performing company in Seattle, and using my previous experience, turned the business around. From there we built the business.”
The company gained scale in 1998 and 2002 by two large acquisitions and continued on the growth path, geographically and in terms of capability. Just over the last few years, seven acquisitions have been completed, with the most recent one being achieved in July 2024, when USA Safety Supply Corporation based in Eagan, Minnesota joined Stellar.
Today, Stellar has 20 branches and 246 associates serving small, medium and large manufacturers across the United States, including major industrial players such as Boeing, Starlink and Tesla.
The winning approach
What truly differentiates Stellar from other industrial suppliers is its commitment to customer support. The company operates through five divisions, each with its own product and market specialists, who utilise their specific industry and product knowledge to help customers receive the best value, for the greatest profitability.
“Each customer engagement is unique, and each division strives to address customer needs within their specific segment,” says Wiborg, noting that about two thirds of the business is manufacturing and machining, and the largest proportion of that is aerospace and defence-related manufacturing.
In this highly competitive environment, Stellar stands out in one particular aspect – its dedication to drive customer profit improvement through its extremely robust Documented Cost Savings Program, a simple yet elegant plan: a customer agrees to purchase a higher volume and a wider range of products when purchased through Stellar, but only once the company has proven that documented cost savings have been achieved for the customer.
“The Program provides mutual benefit for both parties. In recognizing our vision to create “Ideal Customer-Supplier Partnerships” it enables us to act as advocates for our customers’ best interests. By implementing this Program, we aim to maximize profits and inventory turns.”
“We do this by supply-chain recommendations and product recommendations to improve their ability to drive a return on capital. So either improve profit margin rates for them, or better cost structures, or even a lower piece price on the products. ”
“We’ve helped customers create cost structures that allowed them to enter a whole new section of their market, generating a whole new revenue stream, and we have cases where customers have avoided fairly significant capital outlays because we made their existing lines more productive and efficient.”
In 2023 alone, Stellar and its partners combined to generate almost $19.5M million in customer-approved documented cost savings. Over the life of the program, the amount achieved has been almost $200 million.
“Our value to industry in the United States, where we operate primarily, is to help customers improve their efficiency and improve their financial outcomes,” says Wiborg. “Why Stellar? Because we, better than any other industrial distributor, improve financial performance consistently, year over year. And we can prove it.”
The Stellar Way
Wiborg is aware that a company is nothing without people who work towards a common goal as a cohesive team. “I believe that the one sustainable competitive advantage any company can have is its culture. To this end, we have defined 26 fundamentals forming ‘the Stellar Way’, describing desired behaviour and bringing the company culture to life. Our fundamentals also helped us tremendously to sail through the pandemic.”
The pandemic was also the time when John Wiborg installed another human resource initiative called the Stellar Leadership Forum, a year-long program focused on retaining talent and developing leadership skills. Through monthly workshops, structured reading assignments, and a mentorship program.
“We decided we really needed to find ways to come out of the pandemic as a lot better organization than we entered it, and the Stellar Leadership Forum is one of the work streams that I’m really proud of. It teaches about the pillars of leadership that we believe will serve our people well, whether they continue in our organization or not.”
Unlike many, Stellar looked at the pandemic as an opportunity, he further affirms, saying that playing defence was never an approach he supported. As such, he was very clear that Stellar would do things differently from the others. “I developed an acquisition pipeline during the pandemic and that played into our hands very well.”
“Our revenues increased by almost 160% compared to 2019. Of course, we would have not achieved this without our great team. The pandemic was an intense time but our strong company culture helped us to emerge as a better organization.”
Time for consolidation
With the recent acquisitions, Stellar’s position seems stronger than ever, and now the company will focus on consolidating the gains over the last few years, says Wiborg. “We have some opportunities internally to get more efficient and to get more consistent. Buying companies adds complexity, so we need to simplify standard procedures.”
However, this does not mean the company will stand still. “We’re always looking for opportunities to bring more services and capabilities to our customers. We still have a fairly robust acquisition pipeline, so I expect us to be a substantially larger business in two or three years, after a period of consolidating our gains.”
“We are looking for good companies, with the right culture, bringing us either geographies or capabilities, improving the rates of profit for our customers and also bringing new ideas – we are always open to improvements!”
Looking back, Wiborg can be rightfully proud of Stellar’s achievements. “I started with a wish to work in a team to create something good for the long term. I’ve been blessed with having a great team of people, people who have been with us for a long time, and also new people coming in through acquisitions, who are contributing immediately. That has been tremendously rewarding.”
