A new partnership between a dealer group and a wholesaler alliance aims to benefit US dealers for years to come.
"Solely for the benefit of the independent dealer" is not a phrase heard very often in the office products industry.
But a groundbreaking licensing agreement between is.group and Advantage Marketing Wholesalers (AMW) looks to bring dealer interests to the forefront, with the creation of the first-ever private label brand for independent dealers in the US.
Tagged Legacy, the brand is the culmination of a new long-term alliance between one of the country’s largest dealer groups and a regional wholesaler organisation made up of ActionEmco and PPI Wholesale Office Supply.
Unusually, no big box OP retailer or mass merchant will have access to Legacy. With 500 office supply items in the range, covering 39 key commodity-based categories, the brand offers a full range of core office products with a quality that meets or exceeds OEM standards. Legacy also has bilingual packaging, meeting the requirements of today’s diverse consumer base.
"I believe the independent dealer channel needs an independent private label brand which has complete transparency and gives dealers governance regarding sourcing, costs and product line development," says Mike Gentile, president and CEO of is.group. "This allows them the freedom to choose their own brand, rather than be forced to market and sell the national general line wholesaler brands that in turn dictate the dealer’s margins and product line."
An open bidding process included 40 pre-qualified vendors. Emphasis was put on "quality, supply chain management and the best net price" without programme support.
Some 20 suppliers were involved in the Phase 1 launch, with a heavy focus on domestic-branded vendors to leverage current relationships. At the same time, careful attention was paid to avoid penalising existing long-term vendor partners.
The deal sees an "open price" philosophy under a unique dealer licensing agreement. Legacy allows direct buying relationships for dealers with business scale to handle the minimum volume requirements – thus leveraging the combined is.group and AMW volumes to make the independent dealer more competitive in the marketplace.
"We felt strongly that in order for independents to stay competitive, they needed to be able to have access to dead-net pricing to help them compete with the power channel," says Jack Reagan, president of AMW and EVP of ActionEmco. "Very few independents had the volume or marketing expertise to get competitive costs and launch a new brand."
The partnership puts is.group’s and AMW’s volume together, allowing both entities to leverage the Legacy brand and expand the mix. Sharing the inventories between three is.group RDCs and three AMW locations benefits all in the process by more efficiently managing stock levels to service dealer demands.
Dealers will have access to a multitude of buying scenarios and can buy as little as one line each and quantities as large as containers under a unified brand. This allows all sizes of dealers to get behind the brand, focus on building it, and then have access to better pricing as their volumes grow.
Reagan adds: "We had great success with our former brand, Director’s Select, but felt this opportunity was too important for the independent community to miss in order to combat the big boxes together. It is our hope that other independents and Buying Groups will seem long term value and join with us and is.group to make Legacy an even stronger brand."