Newly promoted is.group president Mike Gentile says the entire independent sector must unite to win its battle against the power channel
By his own admission, Mike Gentile’s education in the OP industry is well rounded, having experienced life from both sides of the fence.
After a stint in the manufacturing space with paper maker Diamond International, he spent 16 years with power player Boise Office Solutions before switching codes to dealer group is.group in March 2003.
"Those 16 years helped prepare me for what I do today," says Gentile. "I came out of Boise with solid operational experience and with knowledge of how to run distribution centres. I also gained extensive corporate staff experience, having been director of marketing, and that really helped me. I learned the nuts and bolts of the OP business, how to work with people and gain consensus."
While Gentile enjoyed his time with Boise, 16 years with a single public company is a long time, and he was beginning to feel the frustration. "I got to a point in my career when I felt like a caged tiger," he says. "I knew I could do more and wanted to do more. I just didn’t feel like I was working to my full potential in what I was doing."
Gentile has had to undergo something of a change of mentality, however, working for a cooperative like is.group as opposed to an NYSE-listed corporate like Boise.
He explains: "In running a dealer group people use the analogy that it is like herding cats. I realise that I have got over 550 members who all have varying opinions and there are no wrong opinions. Working for a Fortune 500 company, there is only one opinion."
But there is also a sense of an almost greater worthiness working for a members’ group as opposed to a blue chip, a point that is not lost on a man who in his spare moments devotes much time to charitable work.
Now, rather than trying to maximise shareholder value, Gentile’s energies are devoted to the independent dealers and helping them prosper in an increasingly competitive environment. Says Gentile: "Everyday I worked to maximise shareholder value for Boise, but now what I do everyday has a direct impact on many dealers’ lives. They want to grow their business so they can pass it on to their families and others."
vital
And Gentile is clearly proud of the efforts that is.group has made to empower the dealer community, although some recent initiatives, particularly its distribution system, have not always been fully understood or universally well received.
He says: "Our model is not to be a general line wholesaler like a United Stationers or an SP Richards and never will. They perform a very vital function. I think in the beginning people thought we were about to become another wholesaler, but that wasn’t the plan at all. It’s just a more effective way of buying direct for the independent dealer."
Gentile concedes that the distribution system has had its troubles in the first six months, with the dealer community taking rather longer to embrace the concept than had been hoped for. Indeed, when the plans were first revealed, it led to the desertion of some 100 dealers.
"is.group lost a lot of dealers when we implemented it," admits Gentile. "A lot felt that, as they were stockless dealers, this model would not make sense. Others felt they did not want to be that constrained."
But over time, the benefits became apparent to those dealers that did embrace it. Through word of mouth, the advantages of the concept spread and now "over 95 per cent" of members partake in the scheme.
Since assuming the day-to-day responsibilities for running is.group from CEO John Kreidel at the beginning of the year, Gentile’s focus is more firmly fixed than ever upon dealer prosperity. And he is convinced the distribution system is a key driver for this.
The scheme still has its knockers, but the normally mild-mannered Gentile has little time for them. "There are still sceptics in the industry and it is unfortunate, because many of the sceptics are folks that have never used it or want us to fall flat on our face.
"That’s very narrow-minded, because what we are trying to do is help independent dealers grow and sustain themselves in a very competitive market. If that doesn’t happen, independent dealer market share will continue to decline and everybody should be concerned about that. If the market continues to decline then we have a serious problem for the manufacturers. They will have a nightmare if they wake up one morning and have only five customers."
brick wall
Indeed, you get the distinct feeling that at times Gentile would like to knock certain industry heads together. He says it is about time that dealers, dealer groups, wholesalers and manufacturers all realised who the common enemy was – none of them, but the power channel.
He alludes that at times it can be a case of banging your head against a brick wall. "It’s the definition of insanity, doing the same thing over and over and expecting a different result, and that is what is going on in the independent channel. We have to break some paradigms. We must find a way to put ego and greed aside and work together, and recognise who the competition really is."
And this must involve a closer working relationship. It has been argued by some that manufacturers don’t always appreciate the dealer groups enough. Gentile remarks: "I don’t know if they [the manufacturers] or the general line wholesalers SP Richards and United know how to show their support.
"But the wholesalers need to realise that the buying groups are not their competitors. Our goal is to keep the independent dealer healthy, which is in turn their customer. If they want to put us out of business, who is going to be out there to help the independent dealer-
And he has some interesting ideas how to further facilitate that. For instance, why not have a single private label brand that is embraced by all dealer groups and wholesalers alike? Currently, the Value Plus brand is carried by both is.group and TriMega, but it could go much further, according to Gentile.
"It is ridiculous," he says, "that United is out there importing product on its labels; we’re doing it, SPR is doing it, larger dealers are doing it. We’re just putting the same product out and using multiple brands, as opposed to the big boxes that go overseas and have phenomenal buying power. If there is one opportunity, this could be one area which could help act as a bridge to get the entire dealer community together.
"The big boxes have not been bashful in saying that the manufacturers’ brand is not important to them. What is important is their own brand in maximising cost of goods."
Gentile’s message appears clear. Divided we fall, but united we stand.
