STAFDA STATE OF THE INDUSTRY – Campbell: Turn the Order Book Over to a Sales Rep?

John Wolz

“Just imagine a world where the distributor would give the purchase order book to their sales rep,” Jeff Campbell envisioned in his state of manufacturing speech at the Specialty Tools & Fasteners Distributors Association 30th annual convention.
The trust to do that has to be earned, noted Campbell, vice president for sales at Irwin & Lenox Industrial Tools, a division of Newell-Rubbermaid.
Campbell recalled a sales call early in his career when he asked a customer “what are your expectations of me, and what can I do to help your business the most?” The customer responded that in his 25 years, he had never been asked that by a supplier, much less a sales rep.
Campbell urged sales professionals to “not only ask those simple questions, but more importantly, act on the feedback you receive.” Not doing what we say “gives our profession a bad reputation” in addition to hurting the customer relationship.

Campbell urged distributors to share their goals with suppliers, “I know this is getting way out there, but have an operating rhythm where the progress is measured each month by the supplier rep, your sales manager and purchaser, and review quarterly with management from both sides to ensure progress is being made.”
“The supplier and distributor are not unlike a marriage,” Campbell analyzed. “For it to work well and last, it depends on communication. Infrequent, bad or no communication equates to a poor relationship. But frequent, good and meaningful communication, including listening by both parties, makes for a great marriage.”
Suppliers and distributors “can all do a better job at working together to achieve our ultimate goal, which is to win more share of the professional contractors business.”

Campbell has made sales calls on STAFDA members for 17 years as a territory or regional manager, national sales manager and now sales vice president. “I still make over 100 personal visits to STAFDA customers every year and through it all, one thing has remained constant,” Campbell reflected. “This business is still based on relationships, people working together who enjoy each other and have mutual respect and trust for one another.”

Though currently STAFDA distributors and manufacturers are enjoying sales growth for the past three years, there are raw material availability problems, inflated prices and shortage of skilled labor. “Unemployment remains low and Hispanic workers continue to fill the gap for needed employees,” Campbell pointed out. “Suppliers and distributors alike need to improve our ability to serve this large and growing customer base.”
Campbell credited suppliers for keeping prices “relatively low compared with the real cost of goods, not to mention the cost pressures we all have with health insurance premiums, rising energy bills, wages and overall operating expenses.”
To help offset cost pressures, “suppliers are focused on productivity gains and reducing labor costs in plants,” Campbell noted. But suppliers also continue a “mass exodus” to low cost countries and/or outsourcing more products ” and the trend is expected to continue due to the substantial wage gap.
Consumers and end users “vote with their pocketbook each and every day” and “sensitivity around country of origin is low and continuing to decline.”
In addition to wage issues, improved quality in Chinese products allow some to argue that it doesn”t matter where a product is made. “What will determine its success or failure is the products value proposition as it relates to quality, features, benefits, price, brand, after sales support and availability,” Campbell maintained.
Patent infringements and protecting intellectual properties due to limited regulations or enforcement. “We need our government to take a more aggressive stand in this area,” Campbell commented.
There is a 90 to 120 day lead-time for offshore countries, which is challenging, “as some believe unplanned purchases represent more than 50% of the commercial and contractor”s daily tool and accessory spending.”
Campbell foresees “no relief in sight” on imported competition for domestic manufacturers. “However, there is a huge opportunity side to this global marketplace,” Campbell finds. “As the standard of living increases in these low cost countries, their massive population base alone will consume a lot of products.” Global manufacturers, retailers and distributors are investing to get “an early foothold into these dynamic marketplaces,” Campbell said of the 1.3 billion people in China and one billion in India.
STAFDA distributors sell an estimated $15 billion in tools, equipment and accessories for a significant share of the pro contractor market. “STAFDA distributors not only have the largest share of the commercial and reconstruction contractors market, but in your local market your business model allows you to effectively and competitively service your customers offering manufacturers a cost effective way to reach our target end users.”
Campbell has found over the years that STAFDA distributors “have always said that other local STAFDA distributors were their number one competitor more than Hilti, more than big boxes and the national rental chains.”
“It makes sense when you think about it,” Campbell expounded. “STAFDA distributors all pretty much subscribe to the same effective and successful model: Stock extensive breadth and depth of inventory, provide unmatched service, competitive pricing and knowledgeable sales support,” Campbell noted.
Suppliers “would like to think” they have strong relationships with distributors, but Campbell acknowledged that in some cases they “are not where they need to be.”
Attention to big boxes, email replacing personal touch, consolidation and other reasons have affected relationships, but Campbell finds “the biggest reason for the tension is that “STAFDA suppliers and distributors do pick partners and not everyone is going to be happy, especially when sales and profit dollars are negatively impacted.”\ �2006 FastenerNews.com