This month marks a personal milestone. On May 22, 1977, I was hired by this magazine’s legendary founder, Charlie Horton, as an associate editor. I’ve made my living in the PHCP industry ever since - 13 of those years in two different stints with Supply House Times.
Let’s take a pass on reminiscing about all the changes that have taken place in the industry during the last 30 years. Industry old-timers know all about how consolidation, the big boxes and technology have reshaped the PHCP distribution industry over the last three decades, and youngsters care more about tomorrow than yesterday.
A more meaningful exercise would be to examine what hasn’t changed between the PHCP industry of today and the one I first became acquainted with 30 years ago. Here are the roots that still clutch after all these years.
The channel is the bedrock.
Many PHCP manufacturers go to market in more ways than they did 30 years ago, but for most their alternative sales channels represent tributaries to the main stream of commerce. Distributors still are the main customers of most manufacturers in this industry, and contractors the main customers of most distributors. In fact, distributors are in a stronger position today than they were 30 years ago. For an explanation, read or reread Robert Vick’s article in the November 2006 edition of this magazine, “Manufacturers & Wholesalers: Is the Traditional Relationship Becoming Extinct?” (available in our online archives atwww.supplyht.com).Contractors still can't merchandise.
Poor merchandising skills of plumbing contractors was a common lament among distributors 30 years ago, and the situation hasn’t improved. Nor will it ever, in this opinion. Expecting contractors to excel as merchandisers is like asking a golf pro to take over tennis instruction. On occasion you may find one with the know-how to do the job reasonably well, but as a resort owner you wouldn’t expect it as a condition of employment. Contractors have enough on their platter handling their complex trade business. Most don’t have the aptitude or will to master sales and marketing as well. This doesn’t mean they can’t move product, however. Numerous studies have shown that end users place a lot of trust in contractor product recommendations, so contractors have enormous influence over which brands get purchased.Service still counts.
Then, as now, the lowest price in town always drew attention, but more often than not the final sale went to the distributor that offered the best combination of availability, convenience and value-added customer services.Slow pay hasn't caught up with the times.
We now live in a world where millions of people pay bills electronically at close to the speed of light. Credit cards allow businesses instant access to cash from transactions, and almost every business accepts credit cards nowadays. The traditional 30-day grace period has morphed into two weeks or “upon receipt” with many creditors. Late payers increasingly get stung with finance charges. Virtually everywhere you look businesses have implemented policies to speed up payment cycles. Except PHCP distributors still average upwards of 45 days for receivables, just like 30 years ago.Lawyers are still sucking blood.
One of my meatiest early assignments was collaborating on a staff report detailing the “Product Liability Crisis,” which spanned more than 40 pages in the gigantic October 1977 edition of this magazine (340 numbered pages). NAW was leading the industry’s charge for tort reform back then and, regrettably, still is. A book just came out titled,Jackpot Justice: The True Cost of America’s Tort System, which places the total cost of tort injustice to the U.S. economy at a staggering $865 billion per year.The industry is still a fraternity.
Everyone in the PHCP supply chain - manufacturers, reps, distributors and contractors - feels a sense of “us” in relating to one another. Maybe it’s because “them” who inhabit the outside world tend to snicker and turn their noses up at our unfashionable industry. This causes those of us in the fraternity to close ranks and draw closer to one another. People routinely change companies and jobs within the industry, but those who join it at the entry level tend to stay a part of it throughout their career. Among those that do leave, a surprising number return within a few years. Think about how many people you know that fit these descriptions.Change is still accelerating.
Thirty years ago trade magazine articles were filled with exclamations over the profound changes taking place in the industry - more than ever before, people were saying. Same as today.It’s been a great ride, and I wouldn’t change a thing.
