The chain I am referring to is the relationship of wholesalers to their dealer market. It seems, at least in my geographic area, there are no more “wholesale only” businesses. To more accurately define what I’m talking about I would further categorize them as plumbing supply wholesalers, as that is the nature of my business.
I work in a purchasing and inventory control capacity here in Alaska. Our company operates with six fully stocked service vans and a retail store staffed with three employees. We sell and service most popular lines of boilers, furnaces, unit heaters, on demand HW units and most all other related products pertaining to our industry. Our warehouse is known in the community as having an exceptional level of material on hand.
The owner started out some 35 years ago working out of a shed. Like most startup companies he was doing it all, including making a 350-mile round trip to the Anchorage supply stores once a week for material. There was a supply store locally but they sold to anyone and everyone, making it very hard to shop with them and resell in the same market. After seeing the volume of business coming to the area the other two “wholesalers” decided to open branch locations here.
That’s what broke the supply chain. Now we have three plumbing “wholesalers” plus two big box stores in a market of about 60,000 people. The oldest and largest openly sells to anyone, seemingly gearing themselves to compete with Home Depot and Lowes. The local management has been resistant to our requests to tighten up as they call themselves a wholesaler but they are defiantly not a pure wholesaler.
At first glance it would seem having three local supply houses and two huge new inventories to choose from was going to be a good deal. We thought it would mean more choices, better pricing and better service. We remodeled our showroom, got ready to service our walk-in clientèle with a new counter, new flooring and better displays.
Our phones were busy and we had customers at the counter getting ideas on design, equipment, and complete systems, both high-efficiency and standard. It seemed we’d lost our touch, though; we weren’t closing the deals we were used to closing. Then there was that fateful day when we realized the chain was broken.
A fellow we had spent considerable time educating about primary secondary piping, zones and related install details came in for one more bit of advice before he tackled his installation on the new boiler he picked up at the local plumbing wholesale house!
The big "Ah-Ha!"moment had arrived, it wasn’t us entirely, it was the ethics or lack thereof by that wholesaler. Of course there are myriad excuses on why this happened and, unbelievably, through these conversations with them and the other new wholesaler more similar [direct-to-consumer] sales turned up! It has given us great pause in understanding how we are to support a vendor that we are in direct competition with through continued purchases. It has lead us to question the ethics of wholesalers.
Our manufacturers’ reps know of our concerns, yet seem to be apathetic to the situation. Is it a trend brought on by turnover in the supply chain from the top-down? Is it broken by an economy that is struggling and turned the supply chain to an "every man for himself" attitude?
That leads to the reason of my inquiry WHO BROKE THE SUPPLY CHAIN? It is my hope that by going to the national media I will get some input as to the magnitude of the problem, or learn whether it is only a local issue.
Our location makes the logistics of a smooth flow of material from the lower 48 expensive and time consuming, I think that there is strength in numbers but getting a group of plumbers to organize may be difficult as this problem affects each in a different perspective.