Article Number: 5023
Checking in with Steven Feldman - Distributors sound off
The last time we met (FCNews, Oct. 12/19), I randomly listed some thoughts on distributors’ minds that came out during networking breakouts at the annual meeting of the North American Association of Floor Covering Distributors (NAFCD) in late September. Most dealt with supplier relationship issues. Here is part two.
Communication
“At the end of the day, we are in business to make money, not sell flooring. Is there a better delivery system out there? Do we have too much redundancy? These are the discussions we should be having with our manufacturers.”
“I haven’t seen manufacturers with a marketing strategy that they communicate to us, aside from spiff programs.”
“Maybe we need to demand manufacturer/distributor meetings. It’s like a marriage. It’s all about communication. Maybe we need to initiate it. Maybe we need a three-day planning review period where different vendors come in for half a day each. I think that would go a long way.”
Taking on new lines
“I have been reluctant to take on new lines in 2009. In 2007, it was like, I know I can sell it. In 2008, it was I think I can sell it. In 2009, it’s I don’t know.”
“We have become very frugal. We have been slow on new product intros. We are going to take care of what we have, get rid of things that are not working, and then think about taking on new lines.”
“We made a commitment to not take on any new lines this year. We’ll look at things, but not take it on. We are working on training our customers on what we have. That may be the case next year, too. Money is tight. There is a major investment in taking on a new line.”
Buying groups
“One of the big challenges is the intersection of the manufacturing role, distributor role and buying groups. Deals are being negotiated. People are spending my money without asking. They sell a display to a buying group dealer for $299, but the manufacturer bills me $899. That’s for a dealer who does $6,000 worth of business on 60-day terms. I’m willing to do the deal, but bill me $299. It’s like they are saying, ‘We are going to give away $400 or $500 of your money on every display at convention. Are you in?’”
“Ten years ago manufacturers started working deals with the buying groups. They made the deal; they made the rebate. Now that cost is passed down to the distribution level. Don’t charge the distributor unless you have him making the right profit so he can shoulder part of the rebate.”
Dollars and sense
“We can’t make money providing Nordstrom services but working on Costco margins.”
“Our margins are being squeezed. And, today, value is being defined as low price as opposed to something that is warm and fuzzy.”
“The big buzz is service engineering.”
“These days we tell our customers, ‘It’s about service, quality and price. Pick two!’”
General
“Those of us who can survive until mid 2011 will be in a good position because there will be fewer of us.”
“The one thing we can control is our attitude. There still is opportunity. We tell our reps, ‘If your territory sold $500 million worth of wood and it’s down 20%, there is still $400 million of business out there. You sold $1.5 million last year? Look how much more is out there.’”
Communication
“At the end of the day, we are in business to make money, not sell flooring. Is there a better delivery system out there? Do we have too much redundancy? These are the discussions we should be having with our manufacturers.”
“I haven’t seen manufacturers with a marketing strategy that they communicate to us, aside from spiff programs.”
“Maybe we need to demand manufacturer/distributor meetings. It’s like a marriage. It’s all about communication. Maybe we need to initiate it. Maybe we need a three-day planning review period where different vendors come in for half a day each. I think that would go a long way.”
Taking on new lines
“I have been reluctant to take on new lines in 2009. In 2007, it was like, I know I can sell it. In 2008, it was I think I can sell it. In 2009, it’s I don’t know.”
“We have become very frugal. We have been slow on new product intros. We are going to take care of what we have, get rid of things that are not working, and then think about taking on new lines.”
“We made a commitment to not take on any new lines this year. We’ll look at things, but not take it on. We are working on training our customers on what we have. That may be the case next year, too. Money is tight. There is a major investment in taking on a new line.”
Buying groups
“One of the big challenges is the intersection of the manufacturing role, distributor role and buying groups. Deals are being negotiated. People are spending my money without asking. They sell a display to a buying group dealer for $299, but the manufacturer bills me $899. That’s for a dealer who does $6,000 worth of business on 60-day terms. I’m willing to do the deal, but bill me $299. It’s like they are saying, ‘We are going to give away $400 or $500 of your money on every display at convention. Are you in?’”
“Ten years ago manufacturers started working deals with the buying groups. They made the deal; they made the rebate. Now that cost is passed down to the distribution level. Don’t charge the distributor unless you have him making the right profit so he can shoulder part of the rebate.”
Dollars and sense
“We can’t make money providing Nordstrom services but working on Costco margins.”
“Our margins are being squeezed. And, today, value is being defined as low price as opposed to something that is warm and fuzzy.”
“The big buzz is service engineering.”
“These days we tell our customers, ‘It’s about service, quality and price. Pick two!’”
General
“Those of us who can survive until mid 2011 will be in a good position because there will be fewer of us.”
“The one thing we can control is our attitude. There still is opportunity. We tell our reps, ‘If your territory sold $500 million worth of wood and it’s down 20%, there is still $400 million of business out there. You sold $1.5 million last year? Look how much more is out there.’”
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