OPI: We published an interview recently with Craig Bartholomew and he suggested that the main US wholesalers could be doing more to offer a wider selection of products at more competitive prices. Is that a fair comment?
Bob Aiken: Yes, it is. There are categories today where we frankly have way too many items and too many of them are slow-moving. 65% of the items we stock today represent only 5% of our sales. Part of our role as a wholesaler is to carry a broad tail, but we need to focus our assortment and carry more categories like breakroom and foodservice. That would really help companies like Craig’s to be able to diversify their range to grow sales
Harry Dochelli: Craig’s a good partner and we’ve had many conversations around this. Dealers like Craig want a broader selection of products, but they’re not so concerned about the depth level of any particular category. It’s category breadth that matters now to the leading dealers, not category depth and that’s definitely a change.
OPI: Bob, you spoke last year about “earning a greater share of the industry profit pool”. What exactly does that mean?
BA: Well, when you look today at the overall industry profit pool about two thirds are earned by the manufacturers and a third by the wholesalers and the resellers. As we look to create paths to market for those manufacturers and create value for them, it’s important that we and our customers are earning the portion of the profit pool that we’re helping to create.
OPI: I’m not sure the manufacturers would agree. Surely there’s going to be some push-back there?
BA: Manufacturers understand the importance of the independent dealer channel and know it’s in their interests to keep it healthy to the extent that they need to provide cost to goods that allow our dealers to be competitive in the marketplace.
We’re going to focus our assortment and work to align ourselves with dealers around the manufacturers that we think are most committed to the independent dealer channel.
OPI: I’m not sure that answers the question, but I will let it go! Let’s talk about the dealer groups. You developed a strategic relationship recently with TriMega – how has that gone so far?
HD: OK is probably the correct answer in that it hasn’t really met either party’s expectations yet. We’ve got a jan/san and an office products carton programme out there with TriMega. This is probably the type of thing that Craig was alluding to as well. There’re many options in the marketplace today for independents and they tend to pick and choose what’s best for them. It makes sense for their business but it also creates complexities as you pile programme upon programme and run the risk of getting a bit of a watered down result.
We’re constantly meeting with TriMega to talk about how we can really energise the programme, help with their customer base and in the process keep the independent dealer channel healthy.