As published in Office World News
Independents use automation and a network of dealers to service national customers
The ability for independents to deliver products to customers with multiple locations across the country and maintain the same level of service is something with which this channel has always struggled. One dealer’s vision and the assistance of a major wholesaler, however, could remove this chink from our armor. Office World News spoke with Gary Molz, president of Moorestown, NJ-based BF Molz, about the program being established through S.P. Richards, how it works and what it means to independents.
Office World News: Explain the concept behind the program?
Gary Molz: One of the things the Big Box players do that we never could is effectively deliver to customers that have multiple locations throughout the United States. Many of our customers have five to 20 offices spread throughout the country. Currently, we handle that business through wholesalers like USA Express or NED, which use UPS to drop off orders. As independents, when we get outside our core and use UPS for delivery, we are giving away our best attribute. They cannot service the customer like we can.
OWN: How does the program address this issue?
GM: We are establishing the SP-L (Second Party Logistics) program, which is a network of independent dealers nationwide that will service in their local markets the customers of other dealers. For example, I service the Philadelphia area, but if I have a customer that has a location in Dallas, I would much rather have an independent dealer—with a focus on service—do that delivery for me. Chances are that dealer has its own trucks like BF Molz, treats its employees like BF Molz and treats its customers like we treat ours.
OWN: Any worries about the servicing dealer stealing customers?
GM: That is the first question out of most dealers’ mouths. It is an easy answer. The guy that I am delivering to is not the decision maker. The decision maker is based in the ordering dealer’s market. Besides, as an independent, there is integrity. If a dealer started stealing customers it would erode its credibility. Plus, this program is a two-way street. You will pass along an order for a dealer to deliver in another market and the next week that dealer will be passing one to you.
OWN: What is the cost and fee structure?
GM: For the use of USA Express and NED, the dealer pays 9 percent of wholesale cost. We are taking that 9 percent, and instead of paying that to the wholesaler, who then turns around and pays UPS, we pay the wholesaler, who will then pay the servicing dealer. This can become an income stream for the guy that is servicing that account. Now, that dealer is not going to get rich off that 9 percent, but if he is like me and many other dealers out there, our goal is to build truck routes and reduce our expense structure.
OWN: The concept of the SP-L program sounds familiar.
GM: The HON Company, for example, has a similar program for furniture. This concept is not necessarily new, but it has not been done effectively in the office products market. The problem has always been the inability to automate the process. The missing link was the wholesaler. Like the HON Company manages its programs for its dealers, we needed a wholesaler to manage this program. S.P. Richards is developing and rolling out an automated system that will hook into other software systems like GOPD, DDMS, and Britannia. I can now set up my customer, they can place an order, and when we transmit the order to S.P., it is identified and the automation system knows to sort my customer’s order in with the servicing dealer’s delivery.
OWN: What has been the response thus far from the dealer community?
GM: There are already about 60 dealers in 40 markets nationwide that have expressed interest in joining SP-L. The program is currently being beta tested and should be ready for use sometime next quarter.
OWN: How will this program rest with customers?
GM: As far as the end user is concerned, SP-L is quite a marketing tool. The customer might order their products from an out of state dealer and have it delivered by a local dealer. Suddenly, the program presents the opportunity to pitch the independent channel—“Collectively, the independent channel pools its resources to service the customer better than the Big Box players.”