The theme of the American Supply Association’s convention last month in Las Vegas was “All In – Cashing in on the Recovery.” Since I go to Las Vegas only to attend meetings - not to gamble - I had to read the show program before I understood the meaning of “All In.”
The show guide carries a letter from ASA President Bill Kenny. In it, he explains that “All In” describes a situation in poker where the player bets the remainder of his stake when the game is on the line. The understanding is that the player is in the game for the duration, regardless of how bad things get.
Making the connection between poker and what’s been happening in the PHCP wholesaling industry in the last few years requires just a short jump. Clearly, the wholesalers, manufacturers and manufacturers reps who traveled to Las Vegas last month are in the game for the duration.
Everyone I spoke with in Las Vegas believes the worst days of the downturn are over. They also are realistic enough to know challenges still lie ahead.
“Cashing in on the Recovery” - the convention’s subtheme - will take a little longer to achieve for many in attendance, at least in terms of dollar amounts. Several wholesalers, reps and manufacturers told me their revenue was up slightly from last year or flat.
The real “cashing in” I observed at the show is the renewed appreciation that wholesalers, reps and manufacturers seem to have for one another. They realize they need to work together more closely regardless of what happens in the economy.
The show’s attendance figures support this observation. The number of wholesaling companies traveling to Vegas rose to 84, up 36% from 2010 and included large wholesalers not present last year. The number of manufacturers grew to 64, up 32%. Overall, attendance climbed to 498, an increase of 36% from last year’s convention in Chicago.
At least 33 manufacturing companies took advantage of format changes that allowed them to meet one-on-one with wholesalers during conference appointments and tabletop sessions. These new touches came in addition to the networking receptions, hospitality suites and offsite customer dinners that always occur.
These activities, along with a program of top-notch speakers, left little time for anything else. A brief mention was made, however, of a survey of ASA members conducted the previous month bySupply House Times, ASA and BNP Media’s Market Research Division.
The research gives further validity to the upbeat mood at the ASA convention. More than 80% of respondents expect their business to grow, or grow significantly, in the next three years.
More than 90% expect the importance of supply houses to the PHCP industry to increase in the next three years or remain where it is today. During the same period, 51% of respondents expect to be just as reliant as they are today on imports to sell to their customers. Another 37% expect to rely more on foreign products than they are today.
To be sure, wholesalers face threats to their business. Economic conditions will force 81% of respondents to change the way they plan to supply their customers in the next three years.
Inventory levels will feel the biggest impact, according to the survey, and this will have a ripple effect on their vendors and customers. Other respondents say they will remain lean by keeping a lid on costs, such as travel and entertainment, and on hiring.
While more than half of respondents identify the economy as the single biggest threat to their business, another 13% say it is federal legislation and 9% say it’s the government’s failure to address tax reform. Two-thirds of respondents say they will feel a negative impact from the actions of federal legislators.
This sentiment should motivate wholesalers to become more active politically. Perhaps no other area represents a better opportunity for them to work together with their industry partners.
Back at the convention in Las Vegas, Government Affairs Director Dan Hilton discussed ASA’s legislative and regulatory initiatives. The agenda includes issues related to taxes and business; the environment, water conservation and energy efficiency; labor management; and workplace health and safety.
By tackling these issues together, wholesalers and their industry partners can put themselves in a better position to cash in on the recovery, whenever it really gains traction.
