Preseason Primer: Ice-Melt Sales Heat Up
Devising a winning formula for selling ice melt may seem about as scientific as shooting craps. Demand depends largely on the weather, which is predictable only in its unpredictability. Also, customers are often uninterested in ordering early or taking the product long before the snow flies.
A few experienced distributors have ironed out the kinks and developed successful ice-melt sales regimens. These shrewd businesspeople start selling ice melt while the temperatures are still blazing hot. Their sales reps begin calling on customers around Labor Day, hoping to secure preseason sales. But, other than school districts that are buying for the new school year, very few facility managers have ice melt on their minds before snow falls.
“We have meetings at the beginning of the season to refresh and go over ice melt, and then our sales reps go forth and educate the customer,” says Michelle Ruvola, vice president of The Standard Cos., Chicago. “Frankly, in September, no one is really thinking about ice melt unless you put it in front of them.”
To entice customers to buy early, distributors usually offer preseason incentives. The Standard Cos. often give a fixed amount of ice melt free with the order of a full skid; the company also frequently offers free dispensers with early orders.
“If they wait until it snows, you are suddenly bombarded with requests,” Ruvola says. “During a workweek, you have a fixed number of drivers and trucks. If customers wait for a storm, they need it today, and there’s no way you can deliver it. It’s much better for everybody if they order early.”
Milhench Supply, New Bedford, Mass., offers a deep discount for early orders of its leftover stock from the previous year. The company also gives price cuts to customers that take delivery by early fall, whether the product is from existing or new inventory.
Each year, the Kellermeyer Co., Toledo, Ohio, gives its sales reps a flyer that lists discounted prices for ice melt purchased and delivered by October 31. The company lures many customers by offering free delivery for the heavyweight product.
“Other companies will tack on a huge freight bill for moving it,” says the company’s president, Don Kellermeyer. “We’re priced with freight because we are going to those customers anyway and we just throw it on the truck.”
Luck of the Draw
A well crafted marketing plan is a start to a successful ice-melt sales program, but it alone is not enough. Marketing is the easy part of the equation — it is a technique that can be learned and perfected. Distributors must also plan inventory to accommodate difficult-to-predict weather conditions.
“It feels like about 80 percent luck,” Ruvola observes. “Really, I’d say it’s about 70 percent forecasting combined with past experience and 30 percent luck. There is a good percent of the time where you are crossing your fingers and hoping for the best. Everybody wishes for a lot of snow so you sell a lot of product.”
Heike Milhench, president of Milhench Supply, agrees that the process involves a lot of luck, plus trial-and-error. Her ordering strategy? “I have a crystal ball,” she jokes.
“We don’t try to do any real weather forecasting,” Milhench says. “At the beginning of the season we buy a truckload or two — the minimum level of what we’ve sold in previous years — and refill as the season goes.”
Some distributors, on the other hand, try reading the tealeaves to anticipate the coming winter’s weather. The purchaser for Kellermeyer Co. is from a farm family. He skims through the Farmer’s Almanac to look at long-term weather forecasts and uses that information as one factor in determining the company’s preseason ice melt order.
However distributors go about the business of ordering ice melt, they face a challenge. They must weigh the benefits of having enough stock to satisfy customer needs against the downside of wasting valuable warehouse space with excess inventory.
“It’s a difficult product to sell,” Milhench says. “It’s a balance. If you don’t have it in stock they are going to call the next person on the list. But we don’t want to tie up too many dollars in extra ice-melt inventory. If we don’t sell it by March or early April, we don’t want it sitting on our floor all summer long.”
Warehousing is always a sensitive issue for distributors and even more so when it comes to a bulky and cumbersome item such as ice melt. Unfortunately, there is no way to get around stocking at least some of the product during the winter months. As few as 20 percent of customers order in advance, says Kellermeyer. “The rest make up a thousand excuses,” he says.
Even those customers that do order and take delivery early usually can’t take an entire season’s worth of ice melt in the fall. They buy enough to get through the first few snowstorms and expect their distributor to house anything needed beyond that.
Distributors typically reorder ice melt throughout the season, hoping for quick turnaround of the product. As the season approaches its end, however, distributors may worry that each new order from the manufacturer will end up wasting shelf space over the hot summer months.
Manufacturers are typically willing to help their distributors with this problem by offering buy-back programs, particularly to their better customers. If a distributor is important to the manufacturer, it will also likely receive higher priority when the snow falls and emergency delivery is needed.
“We try to consolidate to a few suppliers so we are important business to them,” Kellermeyer says.
Other distributors, like Milhench Supply, forgo end-of-season orders from the manufacturer and instead fill in as needed with supply purchased from other local redistributors.
“This plan has worked,” Milhench says. “We haven’t ever been completely out and we’ve had no major disasters where we’ve lost sales because of our strategy.”
Estimating late-season sales is a tricky business and some distributors miss the mark. Kellermeyer Co. uses its competitors’ missteps as an opportunity to pick up new customers. The company is committed to always being the last supplier in its market to carry ice remover, even if that means filling in with stock from nontraditional sources, such as home centers. When a late storm rolls in and ice melt is a hot-ticket item, the company sends out flyers to let people know it still has inventory.
“If it gets in short supply we’ll raise our prices and people pay it because they need it,” Kellermeyer says. “We do keep our eyes open to see what the weather’s doing, particularly at the end of the season, so we don’t order too much.”
Big Blizzards, Big Problems
Even the best-laid plans can get thrown off track by an unexpected storm. The 80 percent of customers who don’t order ice melt in advance can quickly undermine their distributors’ preparations.
“After the first ice or snowstorm, our phones can’t be answered soon enough for people wanting ice melt,” Kellermeyer says. “They discover they don’t have plenty. Snow days are great for our business but bedlam for our operations people.”
Ill-prepared customers have created some problems for Milhench Supply, which does a lot of business on Martha’s Vineyard by sending a truck by ferry to the island. After a big storm last year, the distributor responded to immediate customer needs by loading its truck up with ice melt. The heavy bags damaged the truck and the company learned its lesson.
“This year we have to focus on scheduling our delivery of ice melt,” Milhench says. “Because of the way people order it, we’re suddenly loading up our little truck with a ton of ice melt versus planning it better and packing half the truck with ice melt and half with supplies.”
The salesperson is in charge of managing the order flow, she says. “She has to give people a head’s up and let them know we have to stagger our deliveries of ice melt. We can start early but they have to work with us by creating space and getting ready for deliveries.”
Hit And Miss
All of these problems may explain why some distributors would prefer to stay out of the ice melt business altogether.
“Being in the location we are, you’d think we’d sell a lot, but I try not to because there’s no money in it,” says Derek Salamone, president of Salamone Supplies in Butler, Wis. His company sells only 10 to 20 pallets of ice melt a year. “I only sell it if I have to. I suppose as we get bigger we’ll be forced to sell it.”
Salamone’s biggest complaint about ice melt is its low profit margin. If he makes $5 per bag and must deliver 10 bags to a customer, he’s made only $50. He says that is simply not worth the money because of the heavy lifting involved.
“Even if you double your money, it’s not worth it to me,” he says. “Moving 50 bags of ice melt is no picnic.”
Other distributors agree that ice-melt margins are low.
“And if a forklift damages a couple of bags,” Ruvola says, “there goes your profits.”
So why carry a low-cost, low-profit product? Most distributors carry ice melt to satisfy their customers’ desire for one-stop-shopping.
“It’s a necessary evil,” says Milhench. “They need to have it and our job is to warehouse it and have it available to them on an as-needed basis.”
Enterprising distributors have found a way to boost the bucks earned by this mundane product. They encourage their customers to bundle ice melt with other winter-weather items, such as spreaders, shovels and floor-care products.
“It’s good customer service,” Ruvola says. “It’s like anything else. You look at your product mix that you are selling and that’s where you increase your profitability on the account.”
Good salespeople also know how to turn customer complaints about ice melt into additional sales. Distributors often hear that the ice melt eats up the cement or won’t work at very cold temperatures. These problems can be addressed by upgrading the customer to a better quality (and higher-priced) product. Customers also get angry about ice melt being tracked inside and staining the carpets. This is an opportunity to sell walk-off mats.
“We definitely try to bundle,” Milhench says. “We do a lot of matting sales as the holistic approach. We offer some high quality matting that people seem to be willing to spend a little extra money on — good quality matting that will help with these other problems.”
Milhench’s sales force also remembers that ice melt itself is a good add-on item.
“Our sales guys are always looking for a good excuse to give the customer a call to say hi,” Milhench says. “When the first snowflakes fall, they call them about ice melt. It’s always a good add-on in the winter months.”
Distributors with successful ice-melt programs have learned to sell early using incentives, to order enough supply to meet demand without exceeding it, to replenish supply throughout the season as needed, and to use ice-melt sales as an opportunity for bundling. They hope to control every element of the sales process.
There is one thing distributors cannot control — the weather. But they have definite ideas of what the perfect season would look like.
“The best-case scenario is when there is snow up until the very beginning of spring. It’s better when there is frequent snow of 1 to 2 inches. Then people just keep on ordering ice melt. They hear predictions and they order,” Ruvola says.
Becky Mollenkamp is a Des Moines, Iowa-based freelance writer and a frequent contributor to SM.
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