In this episode of ToiletTalk, we sat down with Chad Farley, President of ZTERS. They are one of the largest brokers in the portable sanitation industry.

Transcript:

Matt: Hey, Matt here in the ServiceCore studio. Today’s episode is all about working with brokers. We brought in Chad Farley, he’s the president of ZTERS down in Houston, Texas and we discussed some of the benefits of working with brokers and why portable sanitation operators choose to work with them. You don’t wanna miss this episode. It’s got lots of great info. So let’s get back in the booth and get this started.

Hey, Chad, welcome to today’s toilet talk. We’re so happy that you’re here to join us and welcome to the studio.

Chad: Great to be here, Matt. I’m happy to talk to you about this, this wonderful topic.

Matt: Great. So today’s topic, speaking of is all about working with brokers and ZTERS is a broker and we’ve heard, you know, great things about working with brokers. We’ve heard some not-so-great things with working with brokers and that’s why we’re here today. We thought this would be an important topic for our audience to kind of help people make their own decisions and understand what working with the brokers is like and some of the great benefits. So before we jump into a set of questions first. Tell us more about ZTERS.

Chad: Yeah, absolutely. So ZTERS is a site services and commercial waste services management company, a KA A broker. So, so we provide portable toilets, roll-off dumpsters, temporary fencing storage containers, and connect our customers to service providers, to have that work done, really focus on being one point of contact so that our customers don’t have to go hunt down the service providers that they need to get their work done. We’ve been around since 2009 and, have been growing year over year. We’re now, 200 people strong and, have, thousands of customers with active job sites every day.

Matt: Nice and you guys are out of Houston, but do you cover the whole country or are there only parts of the country you cover?

Chad: Correct. We’re out of Houston, but we service nationwide. We’ve provided zip or service in pretty much every zip code in the United States. If anybody’s interested at online, I mean, we have a map that shows all the dots. It kind of, all of the United States kind of blends into one blob. We, we’ve really done business everywhere.

Matt: Nice. Nice. Ok. So thanks for telling us a little bit about ZTERS. Let’s start at the, at the bottom level. What is a broker?

Chad: Yeah. And so broker it, it’s such a funny word to me because I feel like there’s a lot of baggage in it. Like it’s almost like a, a bad word it, it just sounds like it just has a lot going for it. But, but really, like I was thinking it, you answering this question and at the simplest level, it’s just somebody who connects a seller and a buyer. It’s, and, in our case, it’s somebody who needs a portable toilet or a roll-off dumpster and they need somebody to do it. We connect the two pieces together.

We really focus on the fact that we’re a management company. So we streamline that logistical process because our largest customers work with hundreds of different service providers to get their work done, and they don’t want to have relationships with 700 different service providers. They want one point of contact. And so we really focus on making those logistical challenges simple.

And it’s really not that much different than any sort of other service that you do use all the time. Like if you’re at a grocery store, it’s multiple different products, multiple different brands. And you’re going to the grocery store because it’s all in one place. And we try to do the same thing for site services and commercial waste management.

Matt: Got you. Yeah, I, I like that analogy. If we had to go buy bread in one spot and eggs in another, it would not be fun.

Chad: No it wouldn’t.

Matt: So how did it like how did the concept of brokerage come about and as it pertains to the portable sanitation industry?

Chad: So I can’t speak for brokerage as a whole, but I can talk to you a little bit about our journey here. So in the waste management side of services and this is a view kind of where some of that, that bad name around a broker came about.

Walmart really is the start of the story. They wanted one company to come in and manage every single Walmart location and everybody knows there’s a Walmart everywhere and there’s no single, hauler that could do all that service. But Walmart came and they said, gave an ultimatum. It’s either you can service all of the United States where we have locations or we’re gonna create our own department and manage it ourselves and start hauling our own trash. And so, that was the start of commercial waste, National Accounts Department.

And once companies realize that, all right, well, we don’t service everywhere but we can work to streamline the ordering of those services for large companies. Then it really opened the door.

So, for us, we started with realizing that there was a void and the temporary site services particularly roll-offs trying to help, residential homeowners who might have a clean out a, a construction project. And we wanted to set up a online shopping cart for roll-off dumpsters, but we quickly realized that there was a large demand for national construction companies on one side. And in those companies, they wanted to have not just roll-off dumpsters, but portable toilets and storage containers and mobile offices and temporary fencing. And the more services that we could combine, the more attractive a package we were to those companies.

Matt: That makes perfect sense. Yeah, it’s like if you are a large construction company and, you know, I, I love your Walmart example, but we’re gonna get to this in a second, but if you’re a large construction company, I can see similarities between Walmart and you know, a giant brand wanting to work in multiple areas but not deal with hundreds potentially of operators.

So before we get there though, what are the common misconceptions though? Why do people have, you know, not all but some have a negative reaction to working with broker? What are the things that you hear?

Chad: Yeah, I think a lot of it comes from that, that idea that some people came in and this broker side and particularly if you’re working on the buyer side, you’re trying to drive down prices. On the other side, when local companies see that there’s a discrepancy between the prices that they’re charging and what customer to a brokerage like ZTERS is charging, they kind of wonder why, what value is that brokerage company providing to their customers?

And we’ve just been talking about it a bit here and the fact that for a large national construction company, like a Walmart size company, somebody who’s got a very large footprint, one company can’t do all of that service. And so, but when you’re looking at your own individual marketplace, it can be hard to understand why somebody would want to spend more on that service. And so, so really, it, it comes around that price and, and what the right price for those services are.

And I, I make the argument to our service providers that it, it’s really about having one point of contact for our top customers. We take what might be 700 different service providers and put it down to one, we reduce the number of invoices by 40%. And there’s all these different areas where we’re providing value by streamlining those logistical challenges for our customers that aren’t really apparent on the one-off basis.

Matt: Sure. So what I’m hearing there is, it’s, you know, if I’ve heard too, that people are sensitive to the price because they’re like, wow, you’re charging a lot more than what we do in this area, but the catch is that those larger companies, it’s all about convenience and they’re willing to pay more to have someone manage all of these different things for them. Give them one bill versus, and they have to go figure out, ok, this one’s, you know, I’ve got this invoice over here, I’ve got this PRO over here, I’ve got this operator over here.

So, I think it just comes down to like, people are willing to pay for convenience and that doesn’t necessarily mean that it’s going to hurt the pricing in your area because it’s specific to those larger, companies that are coming in is that, did I get that right?

Chad: Yeah and, and it’s even more than convenience, like one of our top customers, really one of their pain points was they were having dry runs all the time. They were having, a number of issues where they, like, they literally at any given point have over 200 active job sites. And, so they weren’t keeping good track of what was on site. They’d have somebody say, well, I called that in and it’s on my Excel spreadsheet, but it wasn’t done. And so that they were often being charged a second month of rent for a portable toilet that was only needed for a week or having dry runs. And all these different, additional charges because the logistics of working with that many service providers actually does become rather complicated. And so they’re saving money by working with ZTERS because they have to hire internal staff and they have to build their internal systems to manage those logistics, which they’re a little bit niche. Like it’s not a, it’s not a common, super common work problem that’s been solved over and over again. And so, we do save them money and we are more convenient.

Matt: Got it. That makes perfect sense. So, you know, my next question is really about if you are a smaller operator or a larger one, like are, is working with brokers more for smaller operators or it sounds like from what you said from this construction example, it could really be for any size.

Chad: Oh, absolutely. When we’re thinking about service providers, we want to work with, I, I think probably at the bottom of the list, it is size. There’s a few situations where that might come into play where if it’s a really large event and we need 50 toilets with seven times a week service, not every service ride is going to be able to do that.

But the vast majority of the work that comes through us is 1 to 2 toilets and hand wash station, one dumpster. And so the most important points to us are you are insured. You have a good track record of delivering servicing and removing on schedule that your drivers and your, staff are friendly to talk to, that your toilets are in good condition, and frankly, that your invoices are nice and neat and clean and well organized because when you’re dealing with thousands of service providers, little things like, did you put the service address on the invoice become big factors?

Matt: Yeah, for sure. Ok, so great. Any size. And it sounds like it’s also, potentially a bit of convenience for if you are providing great service and you, you know, you’re of a certain size where you have your stuff together where invoices look clean and your service is great. But it’s a way to get some of those larger, to work with some of those larger companies that you may not have if you try to do it on your own. And it’s also something for the more established ones that it’s like, hey, this could be a way of growth and one of the areas of growth, I’m, I’m thinking of is, what, what about people that are pros that add on a product line? So let’s say they, they’re running portable toilets and they’re thinking about buying, you know, 10 cans for their dumpsters and, but they don’t have, you know, customers for those already. Is that a way to work with a broker to get a new product line off the ground?

Chad: Absolutely. I have a, a number of really good examples where we’ve come in and helped people take off in a marketplace. We’re not typically going to be able to provide enough business that’s just going to allow a company to not have their own sales force. But in addition to a sales force, we can drive a significant amount of business in a new market.

In Arizona, we’ve had a company that wanted to start out in portable toilets, and we were able to take our network of customers that, we have that were doing work and, Phoenix and, and, and drive that business to them. So pretty much instantly, they had a pretty good book of business from 0 to, 10, 15,000 a month, which that’s, that’s not gonna be enough to be your sole source of income, but it, it, it’s a good start and in some areas, like in Northwest Houston, we worked with Shep Boys. We drive somewhere around, $30,000 a month in business, for portable toilets. We work with a service provider doing roll-offs and temporary fencing and we’ve been able to drive, over a year, nearly a million dollars worth of business, their direction.

So overall, ZTERS customers spent in ’22 about $60 million in revenue and we’re just one broker in this, this space. So it can be a very valuable relationship. I’d say not all brokers are, are created equal. But, speaking for ZTERS, it’s been a very valuable relationship for a number of our service providers

Matt: That makes a lot of sense with going back to the larger companies that, you know, they wanna work with one broker and ZTERS in this case, Are there specific types of companies? We did a benchmark report that showed that the most profitable portable sanitation operators were working with home builders and the commercial space. Is that, you know, is that who we’re talking about here that, that wanna work with you?

Chad: Yeah, absolutely. So we work with a lot of different customers. We have one company, they do their traveling a monster truck show and, and we set up toilets at their events, but our most common customer is a national construction company. We work with a lot of companies that do facility remodeling. So they’ll work with a bunch of big box stores and they’ll go around and remodel all of their locations across the United States. We work with a number of solar roof companies. They tend to have short term projects all across the United States roofing companies in general. We work with oil and gas. We put business out at cell towers which can be kind of remote and, we’ve worked with insurance companies when natural disasters hit. We work with a lot of different, segments but those are some of the most common.

Matt: Gotcha. Those are good ones. So how about, service area? So let’s say I’m a PRO who, you know, I’m in Dallas and I wanna expand to Austin, is working with a broker, a good way to get that new service area kicked off?

Chad: It really can be very much in the same line as adding an additional product line. We really focus ourselves on our, we call it our premier service program, but in any given market, we like to have one go-to service provider that’s going, that’s provided us their pricing upfront so that we can quote our customers without having to reach out to them. But when we have those relationships, it can really, like those examples I provided earlier, help start you off a whole lot stronger because you aren’t looking for that initial customer base. We have a customer base of over 7000 customers. I was looking at it the other day we’ve done, like in that, like one-third of Fortune 500 companies have an account with us and, use our services. They’re really good customers, really good work that we want to drive to really good service providers. And so if somebody’s opening up and they have a good track record. They’re working with us already and they wanna, set up a, a new location. It would be a really good way to jumpstart that new market.

Matt: That’s great. Yeah, I, you know, but the more that we’re talking here, the more benefits I’m hearing. So I hope our audience is hearing that too. And I think also sometimes it’s just about things, sound scary if you’ve heard scary things and then you learn more about it and it’s less scary. So, I’m hearing this is a way for our customers and our audience to grow their business if they choose to work with the broker. So great stuff so far.

But if, if you wanna leave our audience with one thing, what’s, what’s something that you want them to take away from this conversation?

Chad: Yeah. You know, like you said, sometimes things are a little, scary if you don’t know the, the ins and outs of them. But, speaking for ZTERS you know, we feel that there’s the three things that go into our success. We need to provide the services that our customers want. We need to build long term relationships that are profitable with our service providers and we need to have a great staff of employees that, that get it done. And, and so, we’re a really value-driven organization that, we find that when we build these relationships with service providers, they last a long time.

And, we love working with people who want to drive excellent customer service and really meet the needs of our customers and, and the things that, that really matter to our customers are, you know, routing, getting stuff on schedule and a way that, you know, it’s gonna get done communicating that information in a clean, like systematic way.

But those clean invoices, the communication and having everything put together in a clean package is really important for us as a broker and for our customers, it helps us provide the service.

Matt: Nice, nice. It sounds like a winning combination to me and, and I encourage anyone that’s listening to this. If you’re interested and you’re not working with a broker today, reach out to, we’ll put some information next to this video that allows you to connect with them. So, Chad I just wanted to thank you so much. This has been a great and insightful conversation and very happy to have you on this episode.

Chad: Absolutely. Thank you for having me, Matt. This has been a great conversation.

Matt: Awesome. Take care.

Chad: Thank you, Matt.