Niche in water conservation creates firm's flow of profits

Tony Termini and Lauren Sellyei have problem with New Year's resolutions.

"Every January, we say, 'No new products,'" says Sellyei, the co-owner of Reno-based ConservCo Water Conservation Products LLC. "But then something happens."

Something happened often enough in the past five years that the company has grown from a single product a clever device to replace washers in leaking faucets to a catalog of about 90 products sold largely through independent hardware retailers.

And the hits keep on coming.

A few weeks ago, ConservCo announced a deal with Underhill International Corp., which will manufacture a new self-priming hand pump to remove standing water from sprinklers and valve boxes.

ConservCo will market the GulpUltraMax pump through its hardware channels, and Termini says the product which floats also has potential in boating markets.

While it's unlikely consumers will be lining up for hours to be among the first to buy the GulpUltraMax, the pump is a good example of the ConservCo strategy.

Sellyei and Termini, a husband-and-wife team, every year winnow through dozens of bad ideas pitched by inventors in search of that rare gem that fits into ConservCo's line of water-conservation and irrigation products.

One of the company's best sellers, for instance, is a hose-bib lock, a little locking device that fits over outdoor faucets to keep unauthorized people from taking water.

The entire worldwide market for the product probably totals no more than $1 million a year, Sellyei says, and five competitors fight over that smallish bone.

But ConservCo has the biggest share of the market, and it gains profitable efficiencies by moving multiple products out to the hardware retailers who handle the hose-bib lock.

Other products include a shut-off valve that prevents irrigation-system geysers when a mower knock off a sprinkler head, a line of waterless urinals, a reusable bag for homeowners who need to mix up a batch of concrete, and the DripStop Valve, the company's inaugural offering.

DripStop, developed by a mechanical engineer as a replacement for the rubber washers that inevitably wear out in faucets, almost proved too effective for the company's good after a fast start in 2006. DripStop was guaranteed for 60 years.

"It's a product that doesn't wear out," says Termini. "We had to ask, 'What else?'"

Retailers, who like the way ConservCo thinks through the smallest details of displaying and pricing its products, now bug ConservCo regularly to come up with new products.

But even as they steadily added additional products, Sellyei and Termini kept an exceptionally tight hand on overhead.

To this day, they are the company's only two employees. ConservCo either contracts out manufacturing or, for products such as the GulpUltraMax, arranges distribution deals with other manufacturers.

About 25 independent sales representatives sell ConservCo products. Big customers include the hardware wholesaler Orgill Inc., which serves more than 6,000 independent retailers.

"We have a spectacular relationship with them," says Termini.

The network of 4,400 independently owned Ace Hardware stores also is a major market for the Reno company.

ConservCo operates a small distribution center in west Reno, calling in temporary help whenever it needs to prepare an order for shipment.

Sellyei and Termini work 6 a.m. to 6 p.m. six days a week, answering the phones themselves, working with graphic artists and packaging specialists, overseeing offshore manufacturing contracts and staying close to their customers.

"Every one of our customers understands who they are doing business with," says Termini. "We'll do anything we need to do to make something happen for a customer."