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By Harrell Kerkhoff, Maintenance Sales News Editor

Despite the best efforts of mega corporations that globally sell a wide variety of products and services over the internet, the wholesale distribution industry remains alive and well. The big question is, how can today’s small to medium-size distributors take advantage of future opportunities in a time of supply chain disruptions, labor shortages, changes in technology and a variety of other challenges — both known and unknown?


Michael Marks

Providing specific tips during an educational session at the recent 2021 ISSA Show North America, in Las Vegas, NV, was Michael Marks, founding partner of Indian River Consulting Group (ircg.com). Marks discussed, “What Is The Future Of Distribution?”

Marks, who is also a research fellow of the National Association of Wholesaler-Distributors (NAW), explained that there are approximately 360,000 wholesale distributors in the United States.

“Even with mergers and acquisitions, that number stays very consistent. As distributorships are purchased by other companies, that process often forms a void that is filled by new distributorships, many of which are very digital by nature,” Marks said. “Today, 1 out of every 25 employees in the United States works for a wholesale distributor. (The late) Peter Drucker, management guru, once called distribution the ‘dark continent’ of the American economy. The good news is, distribution continues to grow. The key focus now should be on transaction efficiency.”

Marks added that true sales people should focus less on taking care of all the needs within “specific sales geographies” and more on the true act of “sales capturing.”

“The true role of sales people today involves disrupting a customer’s current supply chain, so they choose your company instead of the other guy. Part of the problem is, many sales people spend too much time in transaction management,” Marks said. “Keeping a customer happy is a function of operations, delivery and inventory management — not necessarily sales. You don’t need a sales person to just keep a customer happy, you need a sales person to capture more sales.”

Marks spoke highly on developing sales call methods that help create a recurring revenue stream. It’s also important that distributors focus on digital technology, inside sales and the development of sales specialists — all in an effort to seek out new customers.

Marks also stressed the significance of “switching costs.”

“A company’s gross margins are a function of its customers’ switching costs. If the customer has low switching costs when going from one distributor to another, that leads to each of the distributorship’s gross margins becoming lower,” Marks said. “Therefore, instead of just looking at pricing, (a distributorship) should work on making it cost more money for a customer to switch (from one distributor to another).”

Other points Marks made in his presentation involving distribution growth possibilities included:

■ “Consignment” equals “exclusive” — Marks noted that a consignment sales model can lead to exclusive sales from participating customers. The distributorship can reduce a customer’s working capital in that process, by controlling inventory and making sure products are properly stocked. Meanwhile, pricing can be reviewed at various times agreed upon by both parties.

■ Understand true differences between the B2C (Business-to-Consumer) and B2B (Business-to-Business) models — Marks explained there is a difference to be considered when examining B2C and B2B. For example, if a person orders Christmas presents in a B2C transaction, and the presents don’t arrive on time, the person who started the transaction process might have an emotional issue, but nobody is going to be greatly harmed. The same may not be true for a company that does not receive needed products on time from another company, such as disinfectant.

“There is a difference between B2C and B2B called the, ‘Cost of System Failure.’ One must consider what happens if a transaction doesn’t properly work,” Marks said. “Many people thought (large Internet retailers) and marketplaces were going to change everything and wipe out distributors, but it didn’t and won’t happen, simply due to the physical boundaries of sending products.”

■ Technology can take the friction out of sales and customer relationships, allowing sales people more time to sell — According to Marks, the “old school” way of transaction management takes time. The good news is, modern technology allows distributorships, regardless of size, to improve their sales processes.

“There are many low cost solutions, through the use of technology, that have proven beneficial. Speed is a weapon. It’s now a great time to be a smaller, nimble and resourceful distributor,” Marks said. “It all comes back to satisfying customers. As a distributor, ask yourself, ‘What are the stresses that our customers are going through? How, as a distributorship, can we help them, such as with modern technology?’

“It may involve helping customers solve their manpower issues. As a distributor, success today is more than just ‘moving product.’”

Marks added that there is a right way to embrace technology, and it should start at the senior executive level, rather than the IT level.

“(Executives) are the people who understand the competitive environment. They understand their company’s capital structure and competitors. They have a sense of ‘where things are going,’” he said. “The goal is to get senior management involved in the flow of information, through the use of new technology. Doing so can improve future capabilities.”

■ Plan ahead for the post-pandemic — Whatever the “new normal” will look like after the pandemic, it will nonetheless eventually arrive. Now is a great time for people involved in distribution to properly prepare for, and start thinking about, changes that may take place, as well as how to grow the customer base during those changes.

“It’s a good time to go through your company’s list of customers with staff members, ranking those customers based on future opportunities and needs,” Marks said.

Refering to a hockey saying, “Skate to where the puck is going,” he added that proper planning can lead a distributorship to the right place at the right time, when it comes to future development with customers.

“Plan where you want to be (as a distributorship) in three or so years in terms of capabilities, so when customers get to a certain point within that time span, and realize their true needs, they will turn to your company for help. Again, that process should be driven by senior executives.”

■ Get your employees involved — Global labor shortages remain a huge problem for businesses around the world, and that problem is not likely to disappear anytime soon. Marks said there are two basic reasons why employees leave.

“Employees want to have purpose. This pandemic has shocked everybody. More people are saying, ‘I want to do something where I feel good about myself,’” Marks said. “The second reason people leave is because they feel their voices aren’t being heard. They may make suggestions, but nobody seems to listen. That leads them to look for new opportunities, and right now, there are a lot of opportunities to change jobs.”

Employee engagement is not only essential to keeping companies intact, but allows them to grow, which in turn helps customers prosper.

Although changes and challenges within facilities supply distribution continue, Marks said there is still a place for family-owned, multi-generational distributorships. In fact, those are often the most resilient type of distributors. Continued growth for such companies will involve the use of modern technology, transparency, meeting the needs of current customers and looking for new growth areas.


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XYNYTH Manufacturing Corp. Celebrates 35th Anniversary

“XYNYTH Manufacturing Corp. is renowned among its customers for its excellent, effective products and premier customer service.” — Xynyth Manufacturing

“These past 35 years have given us plenty of reasons to celebrate,” said Kevin Wice, president. “Our company has progressed over the last 35 years in all areas while offering a line of high-quality icemelters. XYNYTH Manufacturing Corporation has played a large role as a leader in the ice melting manufacturing industry.

“Founded in 1986, XYNYTH is based in Vancouver, British Columbia, and over the years, has continually evolved to develop and market its products across North America. There are many challenges, but our future is bright.

“Over the years, the company’s portfolio has been enlarged with many more creative, solutions-based products to meet the needs of the ever-changing business environment challenges.

“From the early days of the organization, the objectives have emphasized on the belief that commitment to our customers' success is the basis of what is consistently a mutual successful business relationship. Our company mandate is to always exceed our customers' expectations. Today, XYNYTH looks forward to many more years of continued growth, serving our customers and developing many more win-win relationships.

“XYNYTH manufacturing has continually developed products focusing on offering safer choices with an emphasis on protecting our environment.

“We started with our first eco-friendly product, Mountain Organic Natural Icemelters, and even today it is our #1 best seller! Over the years, we have truly become the leaders in producing environmentally friendly icemelters. Our goals are not only limited to promote the industry, but also to develop quality standards throughout the years. We strive continually to put in place updated programs for our distributors to help them meet the needs of the ever-changing industry.”

For more information, visit xynyth.com.


American Paper & Twine Acquires Monts Paper & Packaging

American Paper & Twine, Nashville, TN, a large regional independently owned wholesale distributor, has acquired Monts Paper & Packaging, located near Tupelo, MS.

“The purchase of Monts Paper & Packaging expands American Paper & Twine’s reach and increases its share in the wholesale distribution market,” according to the company.

“We are delighted to bring Monts under the American Paper & Twine umbrella,” said Karen Doochin Vingelen, American Paper & Twine president/COO. “It couldn’t be a better fit. In addition to sharing a similar history, our companies were built on the same core values and customer-first culture, which is what has made us successful for 95 years.”

Both companies are wholesale distributors of janitorial products, packaging materials, food service disposables, safety supplies and office products, servicing customers across a broad spectrum of market segments.

“The acquisition is a great match, and allows American Paper & Twine to expand its service area throughout Mississippi,” said Bob Doochin, American Paper & Twine chairman/CEO.

Monts Paper & Packaging President Mark Monts will continue to be active in the business.

“We are excited to bring together two successful privately owned businesses. It creates a wonderful opportunity for our employees and improves the total value we bring to our customers.”

Monts Paper & Packaging will operate as a division of American Paper & Twine for an interim period as the companies execute an integration plan.

“Given our shared core competencies, we expect the transition to be relatively seamless,” said Vingelen.

The acquisition continues a period of growth for American Paper & Twine. Over the last several years, the company opened a new distribution center in Muscle Shoals, AL, acquired RMJ Distributing Co. in Johnson City, TN, and most recently expanded to offer full-service delivery operations in northwest Arkansas.

American Paper & Twine was founded in 1926, and is a distributor across business sectors that include janitorial, packaging, disposable food service, safety and office products. The company has more than 350 employees, over 100 delivery trucks and operates seven full-service distribution centers with combined warehouse space of over 550,000 square feet. The facilities are located throughout the Southeast in Nashville, Chattanooga, Memphis, Knoxville, Little Rock, Atlanta, and Muscle Shoals.

For more information, visit ShopAPT.com.


Nassco Inc. Relocates Headquarters


Pictured, left to right, are: Kurt Melzer, Gene Melzer and Mark Melzer, president.

Nassco Inc., New Berlin, WI, has recently relocated its company headquarters to a new office and warehouse facility within New Berlin. The new location is a 217,000 square-foot distribution center.

Nassco, founded in 1955, is a third-generation family business providing janitorial and packaging supplies throughout the Upper Midwest. In addition, Nassco provides service and repair of janitorial equipment, laundry and warewash systems and packaging equipment.

“We are thrilled to remain in New Berlin, the community we have been in for over 40 years. Our new location offers us the ability to better serve our customers across the Upper Midwest, and offers additional room for growth and expansion,” said Mark Melzer, president of Nassco Inc.

For more information, visit: www.nasscoinc.com.


Schaefer Brush Manufacturing, LLC Names Gonzalo Martinez President And Chief Executive Officer

Schaefer Brush Manufacturing, LLC announces the appointment of Gonzalo Martinez as president and chief executive officer.

“We are fortunate to have someone with Gonzalo Martinez’s background and experience to run Schaefer Brush. We are confident that he will strengthen channel partnerships and drive new growth and profitability,” said Steve Balistreri, managing director of Blackthorne Partners, of which Schaefer Brush is a portfolio company.

Martinez most recently held positions as vice president, Americas, with Pferd, Inc., and as division manager of Hilti Corporation. Gonzalo has over 20 years of experience
in sales and marketing, strategic planning, operations, and business development.

According to a press release, he was selected following a thorough, nationwide search to identify an individual who could lead the company and implement a new growth strategy.

Founded in 1905, Schaefer Brush designs, engineers and manufactures industrial brushes specializing in servicing the HVAC, plumbing, MRO and conveyor cleaning markets.

Established in 1892, Gornell Brush was added to the Schaefer Brush family in 2019, and offers an array of industrial and maintenance products, complementing Schaefer’s product line.
Visit www.schaeferbrush.com.



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In the
Jan/Feb 2022
print issue
of MSN

2022 Buyers’ Guide
including a directory of
manufacturers of sanitary supplies

SPECIAL FOCUS ON:
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