Buildersmerchantsjournal.net is first with the news from this year’s THE Conference in Tenerife, the industry’s foremost networking and business event.
The traditional approach to merchanting was turned on its head in Tenerife this morning as business sessions at THE Conference challenged common attitudes within the industry.
David Moody’s discussion on offsite particularly pulled apart peoples perceptions as he explained how merchants could benefit from the offsite market.
Focussing primarily on the bathroom pod market, Moody explained that bathroom pod companies would trade with merchants, but aren’t currently getting the service they need from them.
“The pod companies want products to be available exactly when they’re needed,” he said. “Because they don’t feel like they get a good service from merchants, they are holding a lot of stock.”
He explained more about the way that bathroom pod companies operate and their needs when sourcing the components for bathroom pods, to demystify the offsite market.
“They are still relatively small buyers of brassware, sanitaryware and they are looking at joining with someone who has a much bigger purchasing power,” he said.
Paul Hetherington of manufacturers Alumasc and Simon Blaxill of merchants Kent Blaxill also stimulated debate on how merchants and suppliers can work better together with their morning seminar and subsequent break out session.
A major cause for contention was price reductions via the supplier for large-scale projects, which merchants felt was damaging their margins. Hetherington explained that it was manufacturers that did not trade with merchants that were forcing this price change.
“The choice is we either take that project together, but we don’t. We have to give those customers those prices, but if I did all my business at that price, the business would collapse.”
In the breakout session, Andy Simpson from Castle Cement explained the situation succinctly: “Is it not a similar scenario to a merchants customer base? You don’t have everybody on the same price. If someone came in with a lower competing price from someone else, you’d match it as a one off but you wouldn’t want to sell all of your products at that price.”
Merchants and suppliers also discussed how they could work together to add value by up-selling products.
Ron Walker, from HPS, said in the breakout session: “We need to control the people who make decisions. You need to give your staff responsibility and incentives eg giving them a percentage of the margins earned, to encourage them to keep prices up.”
Other speakers included Anthony Hilton, who explained the economic slow-down in more depth, predicting that the current conditions will last until about 2011. Stuart Smith, of the Wood Holmes Group, took delegates through data that his company had collated on the housing figures and government targets, explaining that it is unlikely that those targets will be met.
More business sessions will take place tomorrow.
THE Conference is an all-industry event, owned and organised by BMF, BMJ, NMBS and Unimer.