Outsource the sales force to an expert company
The hardware channel is undergoing structural change but sales agents remain ahead of the game, according to AHJ reporter David Burton.
As the hardware channel changes, it is worth considering how your sales operation shapes up for the challenge and opportunities to come.
The landscape changed forever once Masters closed down its operation and Woolworths allowed Metcash to join with the HTHG.
It is the reinvigorated independent segment that allows smart suppliers to consider how sales agents might be the answer to improved sales and operational savings.
The advantage of a sales agent handling negotiations on behalf of a brand is that they have a greater depth of exposure to the buyers’ requirements than a company with a single product range.
This experience can mean the difference in knowing when to say yes or no to a request for extra support, a spot in the catalogue; or why a product slated for delisting, based on sales hurdle rates, is not a fair call.
Sales agencies usually off er a range of services, including merchandising retail stores to complete vendor refill and check range compliance, as well as selling in new lines and briefing store staff on special promotional packs and other offers.
Larger suppliers can generally justify a dedicated sales force, while smaller ones find it difficult to get the same call frequency as a multi brand agency with more arms and legs in the field.
More resources at A Team Merchandising
Since the last Agents and Sales Representatives review in AHJ’s April edition last year, A Team Merchandising has been busy fine-tuning its operation for future opportunities in the hardware channel.
Team member numbers have increased by 10 per cent to a head count of 120 sales and merchandising staff , after an important move made in South Australia which has now had its own state supervisor appointed to provide more support to the local team. Previously the SA team was managed from Victoria.
In a strategic appointment to the business, former long term Mitre 10 executive, Eddie Carrigan, has also joined A Team Merchandising in the role of Business Development Manager.
Mr Carrigan was with Mitre 10 for 28 years and during his time held several roles including inventory control. He also conducted product management in various departments, and also created and managed the Product Master File.
A Team Merchandising Principal, Lyn Coghlan, told AHJ that recruiting Mr Carrigan to the important business development role was a key move, as it brought additional senior hardware experience into the business at a time of industry change.
His appointment to the management team complements Lyn Coghlan’s background as a senior executive in hardware on the supplier side, particularly in key roles with Cabot’s and Selleys, before eventually becoming Channel Manager for GE Consumer Products Australia and New Zealand.
Mr Carrigan’s appointment is timely, as not only does he bring a wealth of knowledge from the hardware channel, suppliers now ponder the way that they will need to do business with the former Mitre 10 and HTH operations now under the Independent Hardware Group. A Team are also now in a position to assist hardware suppliers in the area of data management for the independent sector, particularly with the creation of the Independent Hardware Group.
Mr Carrigan said the level of inquiries from companies wanting to discuss how to service the combined group at field level had definitely increased.
He said A Team Merchandising was currently conducting additional territory mapping to make the most of efficiencies in covering more independent stores.
“For independents it depends on what the supplier needs. Quite often it is to detail new warehouse ranges; it could also be for remerchandising, and again it can be for promotional as well,” Mr Carrigan said.
“With Mitre 10 and HTHG joining forces, we are definitely getting more interest from suppliers reviewing servicing the independent market,” he said.
A Team Merchandising has an extensive list of clients and some of the categories the team services include: trade building supplies, plumbing, paint accessories, homewares, cleaning, electrical, power tool accessories, tools, tiling and timber.
In addition to regular clients, A Team Merchandising carries out one-off projects by negotiation. These services can be of a tactical nature, such as remerchandising, promotional allocations and seasonal blitz work. A Team can work independently or in tandem with supplier staff .
According to Eddie Carrigan, the pressures on margins are leading to further growth in the demand for an outsourced sales solution. In some instances, this results in A Team Merchandising working in tandem using its ‘sales support’ service.
‘Sales support’ provides additional resources to suppliers who, whilst maintaining a strong field team, still require additional support. With new stores, tactical requests and additional sites to service, outsourcing with A Team produces an additional 120 field personnel.
A Team Merchandising’s web-based reporting system provides state-of-the-art technology for suppliers to ‘check in’ with field activity. All aspects, such as journey planners, store visits and images are correlated in the system. If you can log in to the web, you also have the ability to log into ‘A Team Live’.
Superlink offers boutique specialist approach in hardware
Superlink also offers a national representation into the hardware channel through a network of likeminded, individual state brokerage operations, each run by the man that owns the business.
The Superlink members have all cut their teeth in grocery over many years, going back a couple of decades for some.
Currently, Superlink is looking to grow its national hardware business, but is finding it somewhat difficult, according to Superlink South Australian Director, Phil Streng.
“It is probably because we are not as widely known in the hardware business; I am really not sure. If I look at grocery, where we also operate, and do the comparison, in grocery you have got AMC, Crossmark, Strategic – probably those three are right at the top of the tree,” Mr Streng said.
“Then when I look at the hardware scene, there are three or four big brokers that are constantly used and these are: Crossmark, Strikeforce, A Team and Pioneer. The one thing that I have discovered in talking to the prospective clients, in my opinion, they (the clients) are many years behind their expectation of their broker versus the grocery trade,” he said.
Mr Streng thinks that their expectations are pretty marginal and most probably caused by the fact that “you’re dealing with Bunnings, and in most cases are pretty well planogramed.”
However, Phil Streng sees independents as a massive opportunity.
“It is hard work, but my growth is coming from independents where I can actually physically go in and do the work and convince them that they need my product,” Mr Streng said.
He said that dealing with Coles and Woolworths in grocery, like Bunnings in hardware, he is restricted into what can and cannot be done. “So for me, the opportunity to service independents is significant,” he said.
He also believes that independents are looking forward to the service too and said that his understanding is “that the poor old independents don’t get the kind of love that Bunnings gets.”
“This is because, as you know with Bunnings, you have got a vendor form that they print out every month that they send to the supplier, which tells how many times you have called against how many times you should call.”
“So I think independents are something that you can actually spend a bit of time in store and develop your business. This is what Superlink will be doing, be it retail, or where suitable, trade stores too,” he said.
Mr Streng would like to see more independents but believes that the reality is, Bunnings has such a strong footprint now in hardware, and it is going to be hard to stop that.
“Bunnings is about to open a new store, which has not been officially announced, but we know it is happening down at Victor Harbor,” he said.
“There is a very strong independent down there and we know he has had the whole region to himself. You can imagine that – geographically – Victor Harbor is going drag people from Port Elliot, Goolwa, Yankalilla, all those little regional centres that have got their own little hardware store,” he said.
However, Phil Streng believes that Superlink is still young enough, small enough and flexible enough to gain more business in hardware.
“The beauty of our business is that we are small enough; we can resource up if we need to. So the benefit of selecting a small brokerage, in this environment, is that we have the flexibility to do almost anything, and our people are not on timeframes or set times to do things,” he said.
Plenty of choice when it comes to outsourcing
While some sales agencies have been featured in this review, there are several others that should also be considered for their on-going work within the industry.
Firms such as Crossmark, Strikeforce and Pioneer Hardware are all seasoned performers in the segment and boast large-scale teams in the field.
Technology is important when it comes to trusting your sales to a third party and each of the companies covered in this review have their own versions of hand held technology to capture and report their performance at the coal face.
Another source of information on sales agents is AHJ’s Supplier Directory which also list agencies by state. This year’s edition was released alongside the January edition of the magazine.
It might be worth digging it out as you start research on improving your bottom line and performance using the growing outsourced sales force segment.