Scoring Points In Service & Supply
How buying groups and distributors are delivering home runs for dealers and integrators in the face of COVID-19 INTERVIEWS BY NANCY KLOSEK
Dealerscope: What in general is most helpful to your business during COVID-19 about dealing with distributors, besides timely delivery and fair pricing? And what is most helpful about buying group activities during this time?
Franklin Karp COO, Audio Video Systems, Plainview, N.Y.
Franklin Karp, COO, Audio Video Systems, Plainview, N.Y.: Our local distributors are literally on the same block as our offices… So proximity is a very important asset for us. Until June we were closed except for some jobs on Long Island. We had some people working out East, and were considered essential because of I.T., but Manhattan was shut down. By having our distributors open, if they had it in stock, you were golden, because shipments slowed down dramatically. Some vendors did close down, so just getting stuff from Point A to Point B became a real challenge. And China was shut down, so as they ran out of goods, it became a bigger problem; some just didn’t have the ability to fill orders. So it became important for us to be able to pull from a couple of different guys locally, if they had it. They kept us apprised of their inventory positions and that was very helpful. I can’t speak for other buying groups, but I know what mine did. Early on, they put together roundtables of members across the country and had sessions conducted by management to talk about situations that each member was going through. And they also started talking about forecasting so they could get that data back to our vendor partners, so they could, in turn, have a better idea what we were thinking. In some cases, it was just sticking a wet thumb in the air and checking the wind, because you didn’t know – in some parts of the country, they weren’t closed down. So it was a matter of trying to help our vendor partners understand when we would start writing real POs again, helping them forecast their needs, and on the other side of the coin, they were giving us feedback about their situations, so that promises were not made that couldn’t be kept.
Most integrators tried to operate lean, and not had had a lot of inventory. Service was an exception, which we did a lot of, during March through June. That never slowed down. There was lots of back-and-forth information sharing [with the group], and they were interested in what we were seeing, and we got good feedback from them about inventory positions, strengths and weaknesses. It was very valuable. We also had roundtables amongst dealer members, talking about what we were seeing within each market. We did [Zoom meetings] for the months leading up to literally the time of the Fall meeting, which was done completely virtually. The only complaint I heard about it was that we had too much content! It was very well received and well done, and I have to say that they went over and above to stay in touch with members and get us as much information as they could – and get feedback from us to the vendors. We had vendors and members talking together every other week – the information flow was going both ways. It’s really about communicating with your vendor partners. Everybody intrinsically should know that the reason somebody’s business is down is because of this. Everyone understanding and knowing what’s going on in a particular market is key. The buying group people reinforce that – and at the same time, they’re doing their best to shepherd members into supporting vendors where and when they can. So it’s a two-way street.

Everyone’s trying to maximize profits and in some cases there’s nothing you can do to hit the numbers [because of COVID], and the manufacturers are saying, here’s what we can do to soften the blow – and because you’ve been forthcoming with them and they want to continue the partnership, they’re looking at ways to try and do something else. And that’s important. They’re willing to support their partners. Maybe they can’t give the full effect, but maybe there’s a way to help soften the blow.
"Ecommerce had already been a massive trend that showed no signs of slowing. COVID increased that dramatically. And retail was hurting prior to COVID, and that was definitely accelerated.”
Aaron Sholtis
Aaron Sholtis Founder & President, HiDEF Lifestyle, Harrisburg, PA
Aaron Sholtis, Founder & President, HiDEF Lifestyle, Harrisburg, PA.: An interesting comment was made by our buying group director, which was, when we see a huge event like a pandemic happen, we typically don’t see a change in the way business is being done, or in how consumer habits are trending – it just speeds everything up. And that’s kind of true of COVID. Ecommerce had already been a massive trend that showed no signs of slowing. COVID increased that dramatically. And retail was hurting prior to COVID, and that was definitely accelerated. On the flip side, in the housing market, people are questioning how long that market can sustain this. A realtor friend said Millennials are purchasing housing now where they hadn’t before. Interest rates are low. Again, one area where things have sped up is Millennials coming into their own with their purchasing power.
Regarding COVID and these comments about acceleration, the technologies, or the logistical abilities of the distributors – and buying groups, to some degree – have been magnified. We have supply-chain issues, and ecommerce has exploded in almost every category, and information flow has obviously changed drastically. So the most valuable thing to us is staying current with information on a daily basis, because everything is hyper-sensitized now. For example, if a consumer is in stay-at-home mode, they’re going to be more critical about receiving their service or their product exactly when they expect it. Early on, with the COVID lockdowns, every company’s response was, expect longer delays. But that’s vanished somewhat. Now, people are very critical about waiting on anything. But distributors have stepped up to the plate. Most of the ones we deal with, and vendors alike, are working from home or remotely. So it’s not inconvenient for them to log on for 10 minutes and do an update if they have some down time at home. Everybody’s trying to push information efficiently and on top of that, everyone seems to be more flexible now.
In what ways can distributors and buying groups be helpful in 2021 in softening the impact and business fallout from COVID, and the new challenges it will pose for you next year?
Karp: What can distributors do through the rest of the year? Very simple – make sure they stay current with their suppliers so that they have inventory. It’s a battle in some cases – especially when you’re talking video. There are shortages in certain categories – did they forecast properly, and maybe bought heavy in a certain screen size and have goods that other guys don’t have?... That’s taking your intel from your dealers and saying, ‘Hey, I’d better buy a lot of 85s while I can get them…’ Guys who were in tune with their market maybe were in better shape. Then, the manufacturers don’t say it, but it started long enough ago that they probably adjusted their production cycle…
Sholtis: Every one of the committees in the buying group has had calls in relation to events for 2021 – do we want to try to have physical events, what are the pluses and minuses, and so on. They’re trying to fine-tune their information flow and communication with all the members and with the vendors as well. That’s one thing; from the buying group side, they understand there can be too much information as well [because vendors are keeping dealers apprised of some of the very same information about availability]. The group has always been good at communicating with dealers and taking feedback to decide what’s pertinent and what isn’t. So filtering that out to the group is important, and so is making sure vendors are staying transparent and are adjusting based on everyone’s needs as it relates to supply chain. It’s more critical now than ever that we dealers make sure we know what the next 30 days or 90 days are going to look like.
Regarding distributors, there’s still a large need for most to embrace technology. We use software to help us automate inventory flow and order flow in and out of our system. The more automation everyone has in place, the easier it is to stay efficient and react faster, and that’s something that unfortunately isn’t universal across all. It’s a huge cost savings to us, and it also helps us increase sales dramatically. If we know what’s in stock the minute they do [it’s helpful]. And also monitoring the order flow saves money and increases the customer experience…
Are there any ways in general that buying groups, in addition to all the services they provide, fine-tune their services to make their function more useful to you? How? And the same question for distributors.
Karp: [Our buying group is] doing it in helping us look at new categories where, if some areas are faltering for one reason or another, they’re exploring new ones where you can do new business. Putting us into the lighting fixtures business was a tremendous step forward. It’s been a boon for all the members. And the wellness category – our group was one of the first to recognize the category, and showed a lot of forethought and smart thinking… [Regarding distributors] we don’t use all their training services that they offer where we already have relationships with a vendor. But there are times they have local events that are really good – get-togethers, even during COVID. That’s nice, and it’s their way of saying thank you. They do their best to keep us informed. And if you need something in a pinch, you’re able to get it. In general about distributors, I was brought up that a distributor was the resource of last resort – but that has done a 180-degree turn. Distributors have become key partners – it’s just easier, quicker, faster. They’ve become very important, and are necessary even beyond a pinch. When you talk about the big-time vendors, you’re not going to have a relationship with those guys – so you have to have relationships with good distributors. And then, there’s all the ancillary stuff they have. You’re not going to start a relationship with a vendor to buy something just one time – that’s insane. The distributor has it, you need it, the job gets completed.
Sholtis: For us, the most important thing in 2021 will be how do we make sure our guys are trained to the hilt on new product and new technologies as well. If you don’t have in-person training, you’d better have the best webinars and the best interaction, from that standpoint. That will be very critical for any manufacturer – especially looking to the springtime product launches. That’s something buying groups can help with a lot. The biggest thing [distributors can do] would be to increase efficiency through technology, both internally and externally, to dealers and the community. The more transparency there is, the better we can react and communicate to consumers and plan our businesses.