Master distributors are seizing the opportunity
Master distributors are putting themselves in a position to thrive.
One of my three beagle dogs recently lost a portion of her ear after an attack by a neighborhood dog.
Fenway (my wife’s a huge Red Sox fan; we had another beagle named Boston) had to undergo emergency surgery to save/reconstruct the ear.
Since the surgery, I’ve noticed a slight change in her. Skeptical of my daughter’s presence since her birth, I’ve now caught Fenway on several occasions climbing in bed with her former 5-year-old adversary.
Hamstrung with a frame that leaves her mere inches from cleaning abandoned dinner plates without leaving her feet, she seized the opportunity about a month ago and made her first sojourn in her eight years of life onto the table (with the aid of a chair) and enjoyed some leftovers. I applauded the move.
The phrase “seize the opportunity” got me to thinking about this month’s issue — our annual spotlight on master distributors. We start with a profile on decorative hardware/kitchen-and-bath master distributor Kolson (Kolson’s Dale Landy and Sandy Lamberg grace our cover). I also visited Houston-based industrial PVF master distributor Team Alloys. My talk with a group of executives about trends in master distribution can be found in this month’s feature.
The consensus with these companies is master distribution continues to provide a critical function in the supply chain and these master distributors are doing everything in their power to make sure they are in a position to seize the opportunity and provide the greatest level of customer service possible.
“Supply houses are like hospitals,” says Ernie Coutermarsh, F.W. Webb’s senior vice president of industrial PVF development. “New construction is a planned event with lots of time to source, shop and fulfill. At least 80% of the time, master distributors are like the emergency room. Urgency and reliability matter. We react 24 hours a day to multiple demands for immediate and emergency unplanned maintenance situations, whether it’s a power plant, hospital, manufacturing plant or helping a contractor. This bodes well for master distributors.”
Smith-Cooper International President Bob Cooper stresses a focus on efficiency is now more important than ever for a master distributor.
“Efficiency is part of being a master distributor,” he says. “We need to be efficient to accurately pull, pack and ship a broad range of products. We need to have inventory in customers’ hands quickly. Our wholesale customers have high expectations in our ability to have orders ready in a matter of hours as opposed to days. Our logistical advantages allow for 90% of our orders to go out the same day. The demands of wholesalers have influenced how a master distributor must react. With our broad range of products, we offer the option of becoming the wholesalers’ extended inventory.”
Cooper adds that efficiency is only part of the equation. “I think the challenges for a master distributor going forward are only going to increase and I think the market will dictate that, whether it’s expected value-adds or due diligence,” he says. “The wholesaler has much higher expectations of a master distributor. Our customer knows Smith-Cooper has done its due diligence because we are known for having quality branded and traceable products. It’s not just being a supplier; it’s our ongoing commitment to the quality of products being supplied.”
Kessler Sales and Distribution Vice President and General Manager Tim Hagan suggests master distributors look to further strengthen their position by transacting business across multiple product categories.
“There has been tremendous margin compression over the last few years,” Hagen says. “If you only are selling one or two products to a customer, you leave yourself vulnerable to pricing challenges. In the commodity/distribution business, we know on any given day we may not have the cheapest price so we constantly are looking for ways to add more value to our customers’ relationships with us.”
Rob Raban, of Los Angeles-based industrial PVF master distributor Industrial Valco, like others I have spoken to, is optimistic about where 2014 is headed. However, he feels the industry would be in an even higher state of optimism if one particular entity would seize the opportunity.
“A lot of money is on the sidelines,” he says. “If our government can get out of the way or, even better, lead the way, it could be our best year ever.”