SEMA News—December 2012

BUSINESS
By Steve Campbell

Linking to the Distribution Chain

“Power Buyers” Reveal How They Find Products

Developing a great product is only the first step in creating a successful business. The next is to get that product into the hands of consumers. To do that, manufacturers need to forge links in the distribution chain, moving their products to the warehouse distributors, jobbers and retail outlets that eventually place the parts in the hands of end users.

SEMA News interviewed three buyers from different sectors of the industry at a recent conference, to find out what gets their attention. SEMA Show Director Tom Gattuso moderated the discussion and was joined by Donnie Eatherly of P&E Distributors, Ray Ott of Auto Trim of Cleveland and Hank Feldman of Performance Plus Tire.

Our panel of “power buyers” talked about their expectations in business relationships with manufacturers, and how they acquire new product lines.

Eatherly is a member of the SEMA Board of Directors. P&E Distributors is family-owned wholesale distributorship based in Nashville, Tennessee, and has been in business for 50 years and services mainly the Southeast with its own fleet of delivery trucks. Eatherly is also a past chairman of the Performance Warehouse Association (PWA).

Ott’s restyling business services the market in Cleveland, Ohio. It provides the installation of auto and truck accessories and sales of sunroofs, spoilers, moldings, running boards and alarms. Ott is a member of the Professional Restylers Organization (PRO) Select Committee and has been in business for 25 years.

Feldman’s company specializes in custom wheels, specialty tires and automotive accessories. It is also a traditional tire dealer with eCommerce and retail facilities, and Feldman has served as a judge at the SEMA Show’s New Product Awards for the past several years.

The Trade Show Opportunity and How to Follow Up

Not surprisingly, trade shows like the SEMA Show, where many new products are launched, are a focus for distributors. Using the SEMA Show as an example, all three said that their preparation begins weeks or even months before the Show opens. Eatherly said that he and his staff are constantly talking about what P&E’s customers are buying or asking for, and they go through consumer and trade publications to study what vendors are offering that may apply to their product lines. Feldman said that he and his partner watch for incoming e-mail and written correspondence pertaining to the Show—particularly from vendors that are more difficult to connect with on a regular basis due to geography or timing. All three buyers pointed out that post-Show follow-up is a crucial but very inconsistent practice among exhibitors.

“I find that it is a situation where you have to be more proactive,” Feldman said. “You have different levels of people who work in the booths. Sometimes the follow-up is good, and sometimes it is not.”

Gattuso said that some of the more frustrating comments SEMA receives after the Show are from buyers who say that they were interested in a product, the exhibitor scanned their badges, but there was no further contact. The panelists were unanimous in suggesting that follow-up be a priority for every exhibitor at the Show.

“You just need to follow through,” Ott said. “Don’t get discouraged. It will be exhausting, but it will be rewarding––especially when you get the order that will take you over the top.”

While all three mentioned direct mail campaigns as a way of learning about new products, they also said that e-mail is the most efficient means of communication between distributors and manufacturers who want to make contact. E-mails can be easily organized and saved, and the buyers are able to respond to queries or invitations when it is convenient.

“One of the resources that you have as SEMA members and exhibitors is that you can call SEMA, explain that you are exhibiting and want to do a mailing or e-mailing to certain types of industry participants or potential customers, and you can order contact information for an appropriate list of buyers,” Eatherly advised. “You can narrow your focus to just what you’re selling.”

The panelists also said that they don’t pre-schedule many appointments at the Show, instead cruising the aisles for new products and vendors they haven’t met before.

“I don’t really set many appointments,” Ott said. “I already have relationships with certain vendors, and I will stop and visit those. I also like to see if there’s something new that gets the creative juices flowing, stuff that you think could be a possible expansion of what you’re doing now, or something that’s different that people aren’t seeing in your area. Different regions have different business. What flies in one region might not in another. That’s why I’m here at the SEMA Show all four days and then some.”

Feldman said that he tries to focus on new opportunities rather than existing relationships, knowing that he can touch base after the fact with current vendors.

“I have the luxury of having a lot of the wheel suppliers in my backyard in Southern California, so it’s not as big of an issue,” he said. “But I do try to touch base with the tire companies, because most of them are in other parts of the country. I also find that it’s sometimes better to meet with vendors away from the Show. It’s sometimes a better strategy if I can get them one on one on my turf.”

Attracting Buyers to Your Booth

The three panelists offered some advice about what they like to see in individual booths. Paramount, of course, are samples of the products being offered, along with company representatives who can fully and completely answer questions.

“But they shouldn’t be trying to display their whole catalog and every one of their product offerings,” Eatherly said. “They should be mainly focused on what they want to sell for the coming year, have it displayed where you can touch and feel it, and they should have a place to sit and discuss it, because every day at a trade show like SEMA is a long day.”

Eatherly said that it’s also gratifying when a manufacturer is already familiar with his company rather than having him explain what P&E is and what it does. And it’s important that he or she be able to explain pricing and policies such as returns.

“The way I look at it, if you spent the time to be there, you should have your policies spelled out, have the people who are working the booth trained so that they know how to handle the customers who come in,” he said. “You’re going to have all kinds—retailers, jobbers, warehouse distributors—so the booth personnel need to have a pretty good understanding of how to answer pricing questions. Don’t make us work to get that information. We might give you an order standing right there in the booth.”

The exhibitor’s manufacturer’s advertised price (MAP) policy is another important consideration for buyers. “It is nice to see a MAP policy, as long as it is enforced,” Ott said. “It makes you feel that you are not going to see something out there for less than what you’re trying to move it for on the street.”

Networking: Relationships Open Doors

People do business with people, Feldman said, and networking opportunities are a major reason why he attends trade shows in person year after year.

“It is extremely valuable to spend time with vendors who have been important to us,” he said. “We want to let them know that we are in a partnership, that it’s more than a buy/sell relationship. It also gives us the opportunity to explore the ability to develop partnerships with new people. That is how we grow our business, by working with our vendors and them working with us.”

Ott said that his involvement with SEMA councils, including his service on the PRO Select Committee, gives him even greater networking possibilities. Many of SEMA’s councils hold awards ceremonies and social gatherings in conjunction with the SEMA Show, allowing business people with similar interests to compare notes and further refine strategies for success.

“Being a part of PRO and interacting with people from different regions to see what’s going on with their businesses is definitely a plus for me,” he said. “It helps me broaden my thought patterns and get to know people. It’s working with people to ensure that the products we’re installing are good quality and customer friendly, so that people are happy that they’re buying aftermarket accessories and will continue to buy aftermarket accessories.”

New Product Display Tips

New products are the lifeblood of many automotive specialty-equipment businesses, which is why SEMA places so much emphasis on the New Products Showcase. Most buyers spend a significant amount of time scrutinizing the display cases and product tables to find the next innovation for their lines. The introduction of electronic scanners a few years ago has streamlined the process of gathering information, allowing buyers to quickly add descriptions and photography to be e-mailed back to home base for full study later on. But whether using a scanner or manually making notes, all of the buyers said that they use the New Products Showcase to cull information and lead them to exhibitors’ booths.

They also said that they like to see products in booths both mounted on a vehicle and in a standalone display. In some cases—wheels and tires, for instance—that opportunity is limited due to size constraints, but being able to touch and closely inspect a product as well as examine its method of attachment can help sell a buyer on its worthiness.

When it’s time to gather hard information, portable is preferable. “I don’t like having to lug home all the literature, especially when I go overweight on my baggage,” Ott said. “I prefer that it’s something small, like a flyer or a CD, and I also like to be able to visit a website where I can download a PDF. If the product information becomes too heavy, I would rather the exhibitor send it to me later.”

Writing Business

There has been supposition in recent years that business is no longer written at the SEMA Show, that buyers now wait until they return home to place orders. However, the three panelists were split on that question. Ott said that he prefers to wait until he’s returned home and has a chance to digest what he’s seen, but Eatherly and Feldman said that their companies do some buying onsite—particularly if there is a special “Show-only” offer available.

“If it fits my category or it’s a growing category or a new product, I buy,” Eatherly said.