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NAFCD: Co-locating pays off for distributor groups

COLORADO SPRINGS, COLO.—By all accounts, the experiment was a success. Billed as “One Event, Two Groups, Three Days,” the combined annual conventions of the North American Association of Floor Covering Distributors (NAFCD) and North American Building Material Distribution Association (NBMDA) yielded benefits that neither group would have achieved on its own.

It began with the mood, which could be attributed in part to sheer numbers. “I thought there was a super, high-energy factor,” said Fred Reitz, vice president of operations, J.J. Haines, Baltimore, and outgoing NAFCD president. “People like being around people. When there are 300-plus people in a room everyone gets pumped up.” Preliminary numbers suggested some educational programs attracted closer to 350 distributors.

Another factor contributing to the success of the event was the agenda designed to bring the two groups together. Case in point were the roundtables, where a main speaker would lead the discussion on a particular topic, such as distribution trends or strategic pricing alter- natives, and then each table of eight would relate to their businesses.

But while the roundtable format was not a first-time event for the group, it was executed with a twist. Each table was comprised of two NAFCD members, two NBMDA members, two building products manufacturers and two floor covering manufacturers. “There was no comfort zone,” Reitz said. “You couldn’t sit with your buddies and gripe. You could potentially have sat at a table with seven strangers. That lends itself to a better sharing of ideas.”

According to George Roth, president of Lockwood Distributing, St. Louis, the floor covering distributors came away with the knowledge that they share many of the same issues and challenges with the building materials distributors, specifically servicing customers, logistics, value pricing and sourcing. “We all picked up on the fact that we all are doing similar margins. The two organizations are very complimentary. There are lots of synergies.”

The co-locating of the event also allowed for a strong educational program which included high-profile speakers, some of which Reitz said the NAFCD would not have been able to secure on its own. “We had three educational sessions which I believe are among the best in flooring.” As an example, he cited Michael Marks, principal, Indian River Consulting Group, who presented “Where’s the New Money?,” the focus of which was in good and bad economies, there is a lot of money to be made. “It was a dynamic presentation with real-life examples.”

Then there was Brent Grover of Evergreen Consulting, who discussed pricing strategies for distributors. “He told us what moving your gross margin 1%, 2%, 3% or 4% could mean to your bottom line,” Roth said. “I’m going to try to implement some of that.”

Pricing authority was another hot topic. How much of the distribution channel allows people on the street full pricing authority and who controls it? Should your sales organization control your pricing?

And then Brian Beaulieau, principal, Institute for Trend Research, one of the country’s leading economists, gave a snapshot of what distributors and manufacturers could look for in the future. Bottom line: While the economic recovery is ongoing, “It just doesn’t feel good yet.” He pointed to some very positive indicators that bode well for economic growth, tempering his projections by noting that it will take a few more quarters for the economy to show marked improvement. “2012 will surprise many as a strong year.”

Last but not least, co-locating the two distributor events provided value for the manufacturers, particularly at the Distributor Marketplace, where new and smaller suppliers were seeking to fill geographic voids within the U.S. But rather than having access to only floor covering distributors, they were able to expose their wares to a whole new set of wholesalers.

Case in point was Gentry Hardwood Floors, where Dennis Mohn, president, told FCNews that he met with 10 distributors on the first day of the Marketplace, three of which were from the buildings materials side. “Two are very interested in adding flooring to the mix,” he said. “They have sales forces, delivery systems, everything in place and a different customer base than a lot of distribution. This opens up a whole different arena for us.”

Then there were companies like Indusparquet USA, which sells products for both flooring and building materials distributors. “On the flooring side we were seeking eastern and western Canadian distributors and found a few that were very interested,” said Jason Strong, vice president of sales and marketing. “We also wanted to preview our new displays and marketing pieces that will ship in January to all our U.S. distributors. But for the building materials dealers, we wanted to expose our decking, doors and windows.”

While the combined distributor group attendance eclipsed anything NAFCD had done in the past, many leading flooring distributors chose to not make the trip. Whether it was the time or financial commitment, NAFCD knows it has to find a way to boost attendance.

“If you track the last five years, attendance follows the business cycle,” Reitz said. “Those who don’t come don’t see the value. We need to promote the value and the learning as well as the networking opportunities.”

Lockwood’s Roth added, “The last two years’ first-time attendees say: ‘If I knew this is what the show was about, I would have been here before and I’m coming back.’”

-Steve Feldman