Suppliers And Their Buying Groups

Ashley Madray, Vice President of Gas Innovations; Gary Degenhardt, National Sales Manager for Chart Industries; and Mike Muenzer, Vice President of Field Sales at ORS NASCO explain why they participate.

Why do you participate in a buying group?

Mike Muenzer: Buying group affiliation allows ORS Nasco to engage customers with a preferred vendor status that helps us increase our share of wallet with the distributor.

Gary Degenhardt:  Chart gets the opportunity to participate in the convention, which is only available to preferred vendors.

Ashley Madray: It’s important for Gas Innovations to be part of buying groups. They help distributors and us work smarter and more efficiently.

Do you belong to more than one buying group?

Mike Muenzer: ORS Nasco is proud to participate with all of the groups in the welding channel:   LDA, AIWD, IWDC and the BIG Group.

Ashley Madray: Gas Innovations participates in IWDC, LDA, AIWD, the BIG Group, and also with Air Liquide’s Alnet Group.

Gary Degenhardt: We too belong to several. We look at the membership of the different organizations and try to determine which organization would have the most success promoting Chart’s products. Each has its unique features.

What are some of the benefits you get from your participation?

Mike Muenzer: Enhanced sales opportunity, participation in vendor committees, and the opportunity to attend and visit many customers at an annual convention.

Ashley Madray: It’s sometimes difficult to call on and get detailed market intelligence feedback from the corporate levels. The buying groups provide a forum that makes it easier to get this information.

Gary Degenhardt: It’s very difficult for our sales teams to get around and hit everyone one on one with the kind of focus we would like to give them. For Chart, it’s very important that we help distributors not only sell a product but become successful at running their businesses.

Would you give an example?

Gary Degenhardt: We designed a CO2 delivery system for the small independent distributor just starting out in the CO2 business. We tailored our program to help members promote it, essentially giving the small independent an opportunity to find a new stream of business.

For the rewards (rebates, purchasing power, etc.) you provide to the distributor, what do you expect in return?

Gary Degenhardt:  Loyalty is earned. Just because we might win an agreement to belong to the group does not give us the ability to sit back and wait for customers to call us. We still have to go out there. Being a primary vendor doesn’t guarantee us the business. It guarantees members will listen to what we have and call us first.

Ashley Madray: Each group has gifts, talents, features that reward us. Some have great payment terms. Some groups are active and receptive to new product innovations. We achieve efficiencies of sale by calling on them jointly.

Mike Muenzer: Revenue growth above the industry average. We try to outpace the market with buying groups. This growth happens with core purchase support and the opportunity for distributors to diversify their portfolio and grow with new brands that ORS Nasco provides access to.

Gary Degenhardt:  We look forward to having the opportunity to meet with the buying groups and promote our services. That’s the biggest thing.

Ashley Madray: Another benefit is that the group’s management team assists us with a non-compliant member or a potential problem.

Are buying groups more important now than they were in the past?

Mike Muenzer: They are still important. They have added value to independent distribution and changed with the times to remain relevant

Gary Degenhardt:  I think the future is very bright for independent distributors. They have multiple buying organizations that better suit the direction they want to take their business, and also give them ideas on how to better run their business.

If you were running a buying group, what practices would you institute?

Gary Degenhardt:  I’d like to incorporate a little bit of each group: best business practices are ideal for a distributor trying to grow to multi-location. Having consultants available to help them drive that business is important. The support of a warehouse, whether internally run or through the business connections available to distributors, is important too.

Mike Muenzer: Stronger group member compliance along with regular strategic vendor engagement.

What do you mean by “strategic vendor engagement”?

Mike Muenzer: More engagement to drive results, quarterly senior level business reviews on sales, service, opportunities, strategic direction, industry trends, etc.

From your perspective as a supplier, what do you see as the benefits for a distributor who is a member of GAWDA to also be part of a buying group?

Mike Muenzer: It’s another opportunity to leverage and learn from best practices and experiences in other markets to apply to your business.

Ashley Madray: It’s a good thing that some groups are moving into gas supply. It’s an example of the transitioning of their sophistication, and it’s evidence of their understanding of their markets. Membership in a buying group provides distributors with the wherewithal to further integrate into other products when facing competition and market changes.

Gary Degenhardt: Even with all the acquisitions occurring, independent distribution is still an up and growing market. There is tremendous opportunity, made more so by participation in the buying groups.

Gases and Welding Distributors Association