Policing its own
NFA, as much as any group, puts a premium on supporting its vendors. The greater the support, the greater the opportunity for exclusive deals, private labels and preferred pricing going forward. To that end, the membership approved a motion by a resounding margin to change its membership agreement whereby if a member falls below a certain rebate dollar threshold, it cannot remain in the organization. The group tiered these minimums for the next 21 months to allow members to build up their rebates earned inside the NFA.
Macco said it is all about maintaining the integrity of the group and living up to its agreements with its vendors. “We are a group of the largest independent retailers and subsequently have an obligation to police our own membership. We must maintain the status of having the dominant player in the market.”
Members now have until Dec. 31 to comply with the minimum rebate requirements. If they fall more than $10,000 short, they face automatic expulsion. If their shortfall is under $10,000, they have another year to get their rebate dollars in line with the minimum requirements. However, in the interim they will forfeit all voting rights, including the ability to veto any potential new member.
Macco does not expect this to have a significant impact on the group given that only a handful of last year’s 35 members may have an issue.
He reiterated the goal is not to expel any NFA member, rather to have them utilize key NFA vendors. “You could be a $10 million dealer (the minimum sales volume as per NFA bylaws), but if you are not generating a lot of rebates, you are not supporting NFA vendors. Your value to the group becomes limited.”
As it stands, any one NFA member has the power to block a prospective retailer from joining the group. It could be for any reason, from geographical competition to personality clash. There is prevailing sentiment that a member who is not significantly supporting NFA vendors should not have the power to prevent the inclusion of a dealer who could strengthen the group.
Because one of the hallmarks of the group is its close-knit structure, the NFA will do all it can to help any member who is not meeting the rebate requirements. “We are not looking to kick a guy when he’s down. If it is the economy that is causing problems, we want to come up with a game plan to help the member support our vendors,” Macco said.