Buying Groups Improve Product Lines, Supply Chain Partnerships

Buying groups are known for their networking events, industry gatherings and conferences. How have these opportunities changed over the last two years and where do you see them in the future? 

Huffer: We were not able to hold conferences in 2020 or 2021 due to the pandemic, and we did not do anything virtual. I did not see virtual as being a productive use of time, and quite honestly, I saw it as a money grab. That’s not what we’re about. Our April 2022 conference in Orlando is set for a record turnout, and I think it shows that this industry is still a relationship business and people need to be face-to-face growing those relationships and continuing to build that trust among distributors and suppliers. 

Haines: I am a firm believer of in-person meetings. You can just do more when you are in the same room with someone than you can looking at them on a Zoom or Microsoft Teams call. Due to the pandemic, DPA was forced to postpone our annual conference to May of 2022 in Ft. Lauderdale, Florida. It should be a record-breaking show due to all of the pent-up demand for these meetings to resume. In the future, I foresee more of a hybrid of in-person and virtual meetings. Technology can be a great thing and also cuts down on costs. 

How can   buying  groups  help distributors earn new business and/or diversify product lines? 

Haines: DPA has invested heavily in the concept of product diversification. If one of our jan/san distributors wants to buy a power tool, an emergency eyewash station or a respiratory mask, we can help. DPA wants to empower and enable distributors to see non-traditional market opportunities that might be right in front of them. Our annual conference features three different product halls: Janitorial/Sanitary Suppliers; Safety Products and Apparel; and Industrial (Tools & Fasteners). Distributors can sign up to attend any of those meetings and learn more about different products and product channels. It is very educational, and our negotiating programs are deep enough so, even if you are new to a certain product industry, you can still be competitive.  

DPA has also partnered with wholesalers or re-distributors across several industries so that distributors can mix-and-match products and keep their inventory low as they start to explore some new supply channels. End users are looking for a distributor that can be a one-stop-shop for all their needs. Diversifying our vendor and product offering has enabled many of our distributor members to be that reliable source of supply to their customers, thus earning them new business. 

Huffer: I think TUG will continue to thrive in the future because we are one of the only groups that was diversified from our inception. We have partnerships with suppliers in jan/san, foodservice disposables, industrial packaging and safety. As the market and world changes, we already have partnerships with those suppliers for sustainable food packaging, electrostatic sprayers, etc. These established relationships give our members an advantage over others. 

How can buying  groups  help distributors compete with e-tailers and big box threats? 

Huffer: We have partnerships with several e-commerce services that provide members with the tools to be able to compete with those e-tailers. They have helped our members create websites and e-commerce capabilities. Our supplier partners have also given us data and assisted in this area. The TUG website is geared toward helping our members with these challenges. Our packaging suppliers also have the products our members need to help their customers compete with e-tailers, such as tapes, corrugated boxes, flexible packaging, air pillows, etc. 

Haines: Buying groups can help distributors that are “operating at scale,” which is especially important given the industry consolidation happening all around us. Operating at scale allows companies to negotiate better terms, pricing and prepaid freight policies. It also facilitates stronger supply chain partnerships and increases operational efficiency. Easier said than done, right? Joining a group is an important step on the path to getting there. Also, and as mentioned before, being able to offer end-user customers that one-stop shopping experience is paramount. The key is not necessarily to add more SKUs, but rather to offer a broad yet targeted assortment of products across many categories. 

A graduate from the University of Wisconsin-Madison, James DeGraff joined Trade Press Media Group in 2019 as an associate editor. He creates and oversees content for Sanitary Maintenance, Facility Cleaning Decisions and Contracting Profits magazines, as well as CleanLink.com. 

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What Distributors Can Gain From Buying Group Memberships