The Right Stuff

The making of a Best-in-Class Supplier

Bridging The Gap: Manufacturer-distributor Relationships

Distributors and manufacturers in the welding and gases industry have long worked tirelessly to build stronger bonds between one another. In fact, the manufacturer-distributor relationship was one of the driving forces behind the founding of the Gases and Welding Distributors Association in 1945.

The partnership that distributors and manufacturers in our industry enjoy today was practically nonexistent in the mid-1940s. Manufacturers’ penchant for independently establishing pricing and terms, with little regard for the distribution channel, created a hostile environment in which each viewed the other with suspicion.

Many manufacturers were selling direct to customers, bypassing distributors as the exclusive medium through which products should be sold. Some began private-branding their products. Other manufacturers required that once a distributor established the account, that account would revert back to the manufacturer on a direct basis.

Distributors felt pressured and began talking about forming an organization, which came to be the National Welding Supply Association, now GAWDA. They believed it could strengthen their role in the industry and foster dialogue with manufacturers, encouraging the beginning of a fresh relationship. It’s a dialogue that continues to this day.

In the 62 years since, GAWDA members—both distributors and suppliers—have made a great deal of progress in strengthening that relationship. Even so, distributors and suppliers agree that there is room for improvement. With trust, honesty, and a bit of give and take on both sides, distributors and manufacturers are building partnerships that will help the industry continue to flourish for decades to come.

First, the good news: The vast majority of distributors interviewed by Welding & Gases Today describe themselves as well satisfied in their relationships with their manufacturers and suppliers. For the most part, distributors note that manufacturers and suppliers in the welding and gases industry produce a good product, are attentive to distributors’ needs, and are supportive of the distribution channel in general. However, many say, there is still room for improvement.

Ronald Ruyle, Tyler Welders Supply
“Communication is the most important thing in the relationship. I expect my manufacturers to be up-front and honest, the same way I treat them and my customers.”
Ronald Ruyle
Tyler Welders Supply
 
“It makes a difference when the manufacturer’s rep isn’t just interested in selling, but actually helps us make sure our showroom looks good, checks to see that our catalog inventory is adequate and our price lists are up-to-date.”
John W. Bragg
N. H. Bragg & Sons
John W. Bragg, N. H. Bragg & Sons
 
Steven Craig, Craig Welding Supply Company
“I will support the manufacturer by stocking all of their products, but I expect the manufacturer’s rep to support me with his or her depth of knowledge when it comes time to sell those products.”
Steven Craig
Craig Welding Supply Company
 
“I appreciate that my manufacturers keep me abreast of any problems, like recalls, as well as any new products coming down the road.”
T. L. Hagan
Logan Hagan
Welding Supply
T. L. Hagan, Logan Hagan Welding Supply
 
Peter Ficarrotto, ACE Welding Supply
“When we call a manufacturer, they should know who we are and what our pricing is, and if merchandise is in stock, the order should get out the door the same day or the next day.”
Peter Ficarrotto
ACE Welding Supply
 
“It’s nice to get an annual visit from somebody higher up in a vendor’s company to check the pulse of our relationship.”
Ron Adkins
Valley Welders Supply
Ron Adkins, Valley Welders Supply
 
Bert Wolf, AOC - Acetylene Oxygen Company
“Some vendors are very easy to do business with: We talk to an actual person on the phone, they respond quickly, they’re well-trained, and they get orders right.”
Bert Wolf
AOC – Acetylene Oxygen Company
 
“The most important things a manufacturer can provide are a good product, on-time delivery, parts availability and a competitive price. Technical assistance, personal sales calls and installation calls are an added bonus.”
W. Scott Griskavich
Badger Welding Supplies
W. Scott Griskavich, Badger Welding Supplies
 
Steve Christoph, Superior Welding Supply Company
“Manufacturers can help us by providing good sales tools for our sales force. More and more are using multimedia, like CDs for PowerPoint presentations.”
Steve Christoph
Superior Welding Supply Company
 
“Manufacturers need to communicate with distributors about how we can best work together to help end-users, because what our customers really need is often different from what they want.”
Joseph F. Campbell
Machinery & Welder Corporation
Joseph F. Campbell, Machinery & Welder Corporation
 
Pete Matarese, Liberty Supply
“I prefer to receive product training in our facility rather than the manufacturer’s so we don’t have to send employees away for three days. We’ve had some very good sessions in-house.”
Pete Matarese
Liberty Supply
 
“It’s nice when a manufacturer actually calls us on the phone to tell us about a new product line coming out.”
Jerry Thompson
Coastal Containment & Welding Supplies
Jerry Thompson, Coastal Containment & Welding Supplies
 
John Hutchings, Tri-County Industrial Supply
“We’re seeing more and more manufacturers willing to go on sales calls with our sales representatives, which is very helpful.”
John Hutchings
Tri-County Industrial Supply
 
“We look for solid customer service from our manufacturers. That includes timely, accurate shipments as well as prompt response to inquiries.”
Kirk Duffy
Southern Welding Supply
Kirk Duffy, Southern Welding Supply
 
Ken Linnenbringer, Delta Gases
“If there’s a major price increase coming, I want to hear about it from the rep himself so I can prepare my salespeople.”
Ken Linnenbringer
Delta Gases
 
“Our top manufacturers sit down with us every year to develop a plan for how we can grow our business and create a win-win situation for both of us.”
Angela Harrison
WELSCO
Angela Harrison, WELSCO
 
Barry Nanz, Trade & Industrial Supply
“A good manufacturer’s representative takes the time to come in, educate my sales force and get to know them.”
Barry Nanz
Trade & Industrial Supply
 
“When there’s a difficult problem, it helps to be able to take a manufacturer’s rep who knows the product inside and out to the customer and help us solve it.”
Sidney Lash
County Welding Supply Co
.
Sidney Lash, County Welding Supply Co.
 
David Houser, Houser Welding Supply Company, Inc.
“I like a hard copy of product literature to keep in my office. Fax or e-mail is OK in a hurry, but I always like to have the information here at my fingertips.”
David Houser
Houser Welding Supply Company, Inc.
 
“The key to a distributor-supplier relationship is loyalty to one another and responsiveness to each other’s needs.”
Steven DeFillipps Sr.
SDS Gases, Inc.
Steven DeFillipps Sr., SDS Gases, Inc.
 
Joe Walton, Williams Metals and Welding Alloys
“Accuracy and lead times are king. There’s nothing worse than an untimely shipment.”
Joe Walton
Williams Metals and Welding Alloys
 
“We appreciate vendors who look at our market’s individual needs and help us develop sales promotions to meet those, versus vendors who only develop national promotions.”
Stan Lefeld
Lefeld Welding & Steel
Supplies Inc.
Stan Lefeld, Lefeld Welding & Steel Supplies Inc.
 
Dave Teator, Ravena Welding Supply
“The best manufacturer-distributor communication is person to person. The human voice is still key to our business.”
Dave Teator
Ravena Welding Supply
 
“I try to stock my manufacturers’ products as best I can to avoid having to ask them for rush orders.”
Darren Bradley
Spectrum Gas Products
Darren Bradley, Spectrum Gas Products
 

Below, GAWDA distributors reflect on the building blocks necessary for a strong manufacturer-distributor relationship, the ways in which distributors and suppliers can work together to make each other’s jobs a little easier, and what manufacturers need to do in order to be assured of a distributor’s loyalty. They also share some of their stories of exceptional performance by their manufacturers and suppliers.

The evidence indicates that the manufacturer-distributor relationship is strong among GAWDA members. With a little work, distributors believe it can be stronger yet. In pursuit of that aim, they identified eight qualities that, together, make for a Best-in-Class Supplier.

#1 Highly Qualified Representatives
A Best-in-Class Supplier employs representatives who are knowledgeable, accessible and dedicated to their distributor customers. After all, for many distributors, a factory representative is the face of the supplier, and that is where the manufacturer-distributor relationship exists on its most personal level.

“A good factory representative is the most important thing that leads to a successful relationship,” says John W. Bragg, president of N. H. Bragg & Sons (Bangor, ME). “It has to be somebody who is attentive, calls on us in the appropriate frequency, and brings value not only to our customer, but to our salesperson when they travel together. When I think about the multitude of companies we represent, the ones that we do the best with are the ones that have the best representation.” Bragg cites as an example the willingness of a manufacturer’s sales representative to work with the company on customer training sessions, even at inconvenient times. “A factory representative who doesn’t shy away from driving two or three hours before a 7:00 a.m. training session shows a lot of dedication and interest.”

“It doesn’t take much to make me happy,” notes Northern Gases & Supplies (Pierceton, IN) President Steven Trump. A representative from one of the major gas suppliers earned Trump’s loyalty because he always returned phone calls, found out the right answers, and followed through on his promises. “A guy who does what he says he’ll do makes me more willing to be accepting on price issues.”

“The key to earning our loyalty is to have good customer relations,” says Charles Loveless, president of Compressed Gases of Augusta (Augusta, GA). “Reps should call on us on a systematic basis, be there when we need them to make end-user calls, and help train us on products.” Loveless shares the story of one representative with whom he is greatly pleased to work. “I’m presently working on a large sale with one of my customers who needed to replace all of their welding equipment, and I contacted our rep. He went with me to the customer, saw what the customer’s objective was, and made an equipment recommendation, then shipped a machine as a demo unit to that customer. Because of the interest and effort he was willing to put forth to help us out, that sale is going to go sailing through. In my opinion, that’s a first-rate manufacturer-distributor relationship.”

“We have a really good rep with one of our manufacturers,” says Louis Campbell Jr., president of Blue Water Industrial Products (New Baltimore, MI). “He knows the welder inside and out, and he has a good handle on steel and welding applications. Whenever we take him along on a sales call, we usually make the sale.”

It’s important that manufacturers take the time to make sure their representatives are well trained, notes Alex Bryant, president of Weld Direct Corporation (Jacksonville, FL). “I expect the representatives I’m working with to know the product better than I do,” he says. “Some reps are really good about helping us solve process problems, but some aren’t, and the problem is they haven’t been trained sufficiently. Some of the reps have had less time with their product than we as distributors have.” However, Bryant points out, that’s a two-way street. “I think a lack of knowledgeable people is probably the biggest issue facing our industry, and that goes for the distribution side too. Our industry is struggling to attract long-term employees, and as a result not enough money is being invested in training.”

“I want to see a factory rep who knows his line, not just somebody who has a catalog out in the car,” says Steven Craig, president of Craig Welding Supply Company (Los Angeles, CA). “I cannot stress enough the importance of knowledgeable salespeople. Manufacturers also need to make sure their salespeople call on distributors in a timely fashion so everybody knows everybody. Those salespeople that we know very well, we work with very well. The ones that we don’t, we don’t.”

#2 Quality Communication
A Best-in-Class Supplier maintains open, honest lines of communication with distributors, responds promptly, and takes the time to work with distributors on a one-to-one level for the benefit of both distributors and end-users.

The basis for any great manufacturer-distributor relationship is communication, says Logan Hagan Welding Supply (Statesboro, GA) President T. L. Hagan. Whenever a customer has a problem and contacts one of Hagan’s manufacturers directly, “It’s not swept under the rug. They recommend that the customer come by and see us, and then they work with us to make sure that customer is satisfied with the quality of the product and any service they need. So they’re communicating with the customer and with us, and among the three of us we have a really good thing going.”

Valley Welders Supply (Billings, MT) President and General Manager Ron Adkins appreciates honesty from his suppliers even when it comes in the form of unwanted news. When one of his manufacturers entered into an agreement to sell products direct, primarily because a competing manufacturer was doing the same thing, “They called us up in advance and said, ‘We just wanted you to know that this is what’s happening. We didn’t want you to hear it from the customer,” Adkins says. “I didn’t agree with what they did, but they did the right thing by telling us. They were being forward and up front, the way they should be.”

David Houser, president of Houser Welding Supply Company Inc. (Somerville, NJ), values a prompt response from manufacturers when he has a problem. “Our manufacturers are very good about getting back to us without delay and making sure we have the right information,” he says. “We just had a situation where we received an expensive welding machine that was damaged. The manufacturer got the trucking company down here right away to determine whether it was shipped from the factory that way or it was damaged in shipping.”

“I like to deal with manufacturers who are willing to provide contact information that allows me to reach them whenever I’m looking for something out of the ordinary,” says Total Welding Supply (East Freetown, MA) President Dale Ferguson. “For instance, I like to have the phone numbers of the engineering department so I can get the answers I need when I need them. I’d be leery of how much information I could get from a manufacturer with only one phone number, because that’s only going to get me the information that somebody at a service desk can provide. In the same way, my manufacturers have my home and mobile phone numbers so they can reach me at any time as well.”

AOC – Acetylene Oxygen Company (Harlingen, TX) President Bert Wolf notes that communication needs vary at the different levels of his company. “I think manufacturers should touch base with corporate headquarters from time to time, but it is most important for the representatives to spend quality time with AOC personnel at our branches, meeting on a routine basis with managers, salespeople and customers. We offer a huge distribution network for our suppliers, and they need to be involved in our business.”

Communication needs vary according to the type of equipment a distributorship is selling, observes F. Russell Strate Jr., president of Strate Welding Supply Co. (Buffalo, NY). “There are some product lines we deal with that, if we hear from the manufacturer once a month outside of when we’re ordering, that’s adequate. But there are other products that change and evolve more rapidly, and for which we may need them to advise us on a much more frequent basis.”

Stan Lefeld, president of Lefeld Welding & Steel Supplies Inc. (Coldwater, OH), would like to see more manufacturers offer timely confirmation that orders have been received and when they will be shipped. “When we get a confirmation back that our purchase order has been accepted, the full cycle of communication is complete, and we can use that information to aid the customer’s decision and/or our decision.”

Ravena Welding Supply (Ravena, NY) President Dave Teator appreciates the simple gesture of receiving a phone call once a month to see if he needs anything. He also suggests that vendors could both improve customer service and increase sales by reminding distributors of items they’ve ordered in the past. “If they have access to our past history on their computer, they might notice something I used to order regularly but haven’t ordered in a while,” he says. “It may be that I inadvertently forgot to add something to my order, and it would be helpful to know that.”

Good communication is especially important when it comes to sensitive issues like price increases, points out Joe Walton, president of Williams Metals and Welding Alloys (Wayne, PA). “There have been times when a supplier dropped a letter in the mail that we received on Wednesday of the following week, informing us of a price increase that went into effect the previous Monday morning,” he says. “If that supplier values me, I should receive a phone call from a regional representative letting me know a price change is going into effect next week, and that a letter will be coming that I can show to customers if necessary. That gives me a couple of days to shift my purchasing, move dates, etc. Getting a letter in the mail after the fact is not a good way of doing business.”

Badger Welding Supplies (Madison, WI) President W. Scott Griskavich says one of the most important changes he’s seen in recent years as far as communication with manufacturers is the use of the Internet. “Information is available with just a few clicks of a mouse, whereas before it might have taken four or five phone calls to three or four different people to get that same information. Product information on the Internet is kept up-to-date a lot better than we used to do with the old three-ring binders. Now we can get most of that information instantaneously, without having to wait for the mail to catch up.”

Superior Welding Supply Company (Waterloo, IA) President Steve Christoph agrees that the Internet has helped to streamline the flow of information between manufacturers and distributors. “It’s very valuable for my salespeople to go to supplier sites and search things out. Then, if they can’t find it there, they can call someone and get an answer. Also, my purchasing people really like the ability to place orders online.”

Joseph F. Campbell, president of Machinery & Welder Corporation (West Allis, WI), points out that strong lines of communication benefit the manufacturer as much as the distributor. “Distributors are manufacturers’ best pulse in the marketplace for what customers really need,” he says. The nature of that communication plays a pivotal role. “Manufacturers need to be honest and candid about what they want to do in the marketplace, and if for some reason I cannot fulfill their needs on a given product or product line, I need to be honest with them. Trust is the foundation for a good relationship.”

#3 Above-and-Beyond Service
Good customer service is a given, but a Best-in-Class Supplier is willing to go the extra mile to show appreciation for distributors and end-users.

A manufacturer who is willing to go above and beyond reaps both a loyal distributor and a loyal customer, observes Pete Matarese, president of Liberty Supply (Leominster, MA). “We have a customer, a one-man shop who just went into business. He bought an engine drive welding machine and only had it a few weeks before something went wrong,” he recalls. “We determined it was a broken crank shaft. The machine was still under warranty, but typically with these types of machines, the warranty of the welding part is handled by the welding equipment manufacturer, but if it’s an engine problem, you get shuffled off to the engine manufacturer, which could cost the customer the use of the welder for six weeks while it’s in for repair. But in this case, our manufacturer opted to send a brand new machine, which made the customer very happy, and it made us happy as well.”

Sometimes a simple gesture can demonstrate support in eloquent ways. When Danes Welding Supplies (Ontario, NY) General Manager Jim Devos received a request from one of his customers, a technical school, to help out with a nonprofit fundraiser, he in turn contacted one of his vendors with whom he has a positive, longstanding relationship. The vendor donated a $300 auto-change welding helmet. “That shows me he cares about our business,” says Devos.

#4 Fair Pricing
A Best-in-Class Supplier maintains equitable pricing arrangements with distributors, communicates frequently and thoroughly about necessary price increases, and doesn’t add confusing surcharges.

Jerry Thompson, president of Coastal Containment & Welding Supplies (Aberdeen, WA), has one request: That smaller distributors have the same access to product lines and pricing as the big guys. “The way manufacturers have set things up, it’s tough to compete if you don’t have the buying power of a very large distributorship.”

Distributor To-Do List
The manufacturer-distributor relationship is a two-way street. Distributors observed there are also steps that distributors can take to strengthen their relationships with suppliers and make it easier for manufacturers to do business with the distribution channel.
 
#1 Show loyalty to manufacturers.
#2 Promote their products to the best of our ability.
#3 Pay on time.
#4 Be open and honest in our communication with them.
#5 Share customer feedback.
#6 Be efficient when ordering, and have the correct part numbers ready.
#7 Maintain adequate inventory.
#8 Invest in product training for ourselves and our employees.
#9 Limit the number of manufacturers we carry.
#10 Understand that manufacturers need to make money too.

“Pricing is a big thing,” agrees Northern Gases & Supplies’ Steven Trump. “I know there have always been different prices for different people, and I suppose a large distributor has worked to get that, but it sure makes it tough for the independent. If manufacturers could give us all the same break as far as pricing, that would let distributors use our skills to sell ourselves instead of our price.”

“We’ve seen some prices going up every four months,” says Louis Campbell Jr. of Blue Water Industrial Products. “I understand the situation with some of these metals and fillers, but it’s getting so it’s almost like eating lobster in a restaurant—it’s priced daily.” Campbell says he usually receives notices of price increases via letter, but would like to see more personal communication about pricing situations.

Steven DeFillipps Sr., president of SDS Gases Inc. (Kearny, NJ), questions some of the surcharges he’s seeing more and more frequently from suppliers. “Sometimes I think they’re uncalled for,” he says. “These suppliers know the business, and they have to expect inclement weather and plan for it. As a distributor, we have a certain percentage of increases built into our contracts. Implementing these surcharges seems like a way of getting above that percentage.”

Superior Welding Supply (Pennsauken, NJ) President Christine Scherrer would like to see manufacturers move toward simple pricing that is easily accessible via the Internet. “With all the surcharges these days, it sometimes makes it very complicated to figure out our costs,” she says. “If suppliers could make their pricing structure more understandable, with less frequent increases, it would make things much easier.”

#5 Excellent Products
A Best-in-Class Supplier offers a best-in-class product, plain and simple. For most distributors, a quality product is an absolute necessity—the one element in the relationship that goes without saying.

“Product quality is number one,” says Peter Ficarrotto, president of ACE Welding Supply (Freeport, NY). “That’s the most important thing a manufacturer can do to earn my loyalty. If I know the product is excellent, I’m willing to spend a little bit more.”

Southern Welding Supply (Savannah, GA) President Kirk Duffy believes manufacturers can strengthen distributor loyalty by giving distributors earlier access to new products. “Give us an opportunity to see and demonstrate those new products and perhaps take them to the marketplace before they reach the low-priced alternatives.”

#6 Readily Available Inventory
A Best-in-Class Supplier provides product in a timely fashion to fulfill the needs of its distributors and their end-users, without long waits that affect the distributor/end-user relationship.

Ken Linnenbringer, president of Delta Gases (Maryland Heights, MO), says that for manufacturers to have product on hand is key. “If it’s common material, we should be able to place an order and get it within a day or two. That’s very important to us because, even though we’re a stocking distributor, we can’t stock everything, and if the manufacturer has the product, that sure makes it a lot easier for us.”

“A lot of products are made to order today, and manufacturers are not stocking like they used to,” says Spectrum Gas Products (Costa Mesa, CA) President Darren Bradley. “For instance, manufacturers used to stock thousands and thousands of valves. But now they’re coming in from overseas, and manufacturers are waiting on brass stock. There are some products that used to ship within a couple of days that now take two weeks or more to arrive. The most important thing a manufacturer can do to help me is to provide the product I need in a timely manner.”

#7 Top-Notch Training
A Best-in-Class Supplier provides regular, in-depth training to deepen distributors’ skill levels, and presents it both at distributors’ locations and at designated regional facilities as necessary.

Compressed Gases of Augusta’s Charles Loveless would like to see more manufacturers willing to perform training at his location. “As a small, independent welding supply company, we can’t afford to send our salespeople to the factories like some larger companies can. But if manufacturers can’t come to our individual location, one possible solution would be for them to do regional training seminars at a hub location. They’d probably draw a good, representative group of distributors.”

When it comes to product training, 37% of distributors prefer to receive hands-on training at their own facility, while 19% prefer a manufacturer’s facility, and 25% say either location is acceptable. 19% of distributors prefer electronic training, such as a CD-ROM or webinar.

WELSCO (North Little Rock, AR) Chairman and CEO Angela Harrison also prefers to bring manufacturers to her company’s site to train employees and customers. In fact, this year the company is opening its own on-site training facility. “We have 16 locations, so it’s very hard to send one person from every location to a manufacturer training program,” she explains. “We are very big on training, and once we get this training facility up and going, we just need our manufacturers to come in and help us with it.”

W. Scott Griskavich of Badger Welding Supplies prefers to send employees for training at manufacturers’ facilities. “That way, they don’t have personal phone calls, personal e-mails, personal faxes and 700 different people distracting them while they’re trying to learn something.”

Delta Gases’ Ken Linnenbringer agrees. “There are some training sessions we do in-house, but I think if you’re really going to hold people’s attention, you’re better off getting them out to the manufacturer’s facility where they have all the proper equipment available.”

#8 Dedication to the Distributor Channel
A Best-in-Class Supplier demonstrates the value it places on the distributor channel by not selling in competition with distributors and by not selling through mega retailers whose deep discounts reduce or eliminate distributors’ profit margins.

When manufacturers sell through big-box stores, everything becomes a matter of price, observes N.H. Bragg & Sons’ John W. Bragg. “I don’t blame the manufacturers, because I’m sure they realize there are shifts going on in the way people buy things, so these are channels they can’t ignore,” he says. “I can’t say to the manufacturers, ‘Don’t sell to them; you’re hurting me.’ But it does make it tough.”

“Years ago, it used to be a welding supply distributor just had the other welding distributor down the street or in the next town to compete with,” says Ronald Ruyle, president of Tyler Welders Supply (Tyler, TX). “Now it’s Lowe’s, The Home Depot, Sam’s Club and W.W. Grainger.” End-users may be saving money in the short term, Ruyle points out, “But when a customer has a problem, they come here for us to take care of it. Then they say, ‘I wish I’d come here first.’”

“The best thing a manufacturer can do is just sell through the distributor chain,” says County Welding Supply Co. (Wharton, NJ) President Sidney Lash. “If a manufacturer works with distributors and a customer happens to call them, they should put that in the distributor’s hands, not sell direct. After all, distributors are their best resources with customers.”

Trade & Industrial Supply (Lawrenceburg, IN) used to sell a “tremendous amount” of power tools, says President Barry Nanz. However, due to competition from the big-boxes, the company quit handling power tools entirely. “There wasn’t any margin to want to keep them in stock,” says Nanz. By contrast, he recalls a positive interaction he had with a manufacturer who implemented a sales blitz in his area. “The reps turned in all their orders for us to ship out of our inventory, rather than take the business direct,” he says. “That showed their loyalty to us.”

John Hutchings, president of Tri-County Industrial Supply (Alvin, TX), confronted one of his manufacturers a year and a half ago over the company’s direct sales to end-users in his area. “We are their primary distributor here, and we have a good relationship with them,” he says. “We confronted them and actually changed their way of thinking. They stopped selling direct in our area out of respect for our distributorship.”

Mutual respect: That’s what it’s all about.

Gases and Welding Distributors Association