GAWDA and Getting Back to Normal in Nashville
by Ken Thompson, on Jun 23, 2021 1:55:41 PM
From All of us, to All of you – the all-volunteer Leadership Team, the volunteer Educational Track presenters, GAWDA’s Headquarters Staff, and the hundreds of GAWDA Distributor and Supplier members willing to assume some risk and join their colleagues in Nashville, THANK YOU!
Over 700 handshakes, hugs, and smiles later... we congratulate you for successfully bringing us back together.
Take home content overflowing with value was the SMC Theme – it was carried out to perfection. Once again authenticating that experience, wisdom, and skill sets residing within our Membership are the most genuine sources of learning available.
But even more remarkable, is the level of respect for each other that promotes the desire to share our experiences with our colleagues. We are an industry focused on EXCELLENCE, and pull together as a TEAM to see that our respective users enjoy the best business experience possible.
Nashville was indeed a launching pad for a re-energized GAWDA moving forward. Popular radio host Paul Harvey, throughout his career, teased his listeners with the tagline, “And Now, The Rest of The Story.”
Industry Consolidators Out in Force
The “Rest of the Story” in Nashville was the presence of an unusually large number of experienced ‘industry consolidators.’ Consolidation in our industry is not new. Some will recall that NWSA meetings in the late 1970s and early 1980s might easily include close to 2,000 distributor companies.
- Beginning in 1982, under the steady hand of Peter McCausland, Airgas was formed. Some 600 acquisitions later, Airgas became an amazing success story.
- Running parallel with Airgas would be the Praxair effort to build out Praxair Distribution, Inc., including another 400 acquired independent distributorships.
- Matheson joined the party – another 200 distributors would consolidate under Trigas.
- TechAir would follow years later, and today, our GAWDA Distributor membership number circulates around 260 (later acquired by guess who, Airgas).
Some might ask, “Why this time around?” First of all, there is an enormous pool of private equity money lying idle. Investors are seeking new opportunities. On the surface, some logic says costs in time and dollars related to regulated industry compliance and conformance standards, relaxed in a prior administration, are likely to reappear. An undercurrent of a less favorable tax structure may negatively impact some of these small businesses.
Distributor owners without clear succession in sight are certainly aware that a higher rate In capital gains tax structure might be detrimental to forward looking financial planning. Pressure on minimum entry level wages trickles upward through the payroll, resulting in higher labor costs, puts pressures on earnings, and even impacts the ability to retain more highly compensated, experienced team members. All true.
Get Online or Get Out of the Way
Researchers in Private Equity firms are very thorough. They constantly look for new horizons of opportunity. Enormous focus has turned toward the industrial distribution supply chains. The emergence and rapid sophistication of ecommerce solutions has, in many distribution verticals, completely realigned the way business is conducted.
Many investors feel large numbers of smaller distribution firms across many verticals are not prepared to adjust to new models.
Even a cursory visit to industry trade press, multiple consulting groups, and individual marquee players quickly reveals that brick and mortar distributor models are being overrun by the large MROs, integrated suppliers, and marketplace services developers. Powerful B2B models are rapidly pushing aside traditional supply chain processing.
COVID protocols accelerated adoption of sophisticated ERP to ERP business management systems at the far ends of supply channels.
Electronic business models in the office supplies vertical became very rapidly adopted by end users. Adding Jan/San to the mix was easy. A template was created; now other specialty discipline distribution types; electrical products distributors, plumbing supplies, and HVAC are jumping aboard. These specialties have been visited frequently and successfully by consolidators, resulting in the roll up of scores of small distributors.
All of these segments share one common denominator – all the products are SKU identified, and can be easily shipped in brown boxes.
Welding Supplies and eCommerce
As focus shifts to the welding supplies and packaged gases distribution industry, new variables emerge. Hard goods merchandise items are easily managed in electronic environments; gases and cylinders present challenges. ERPs in other verticals suited to process transactions are not able to manage or track cylinder assets, and bill rental fees without unique API accommodation.
This further complicates the bolt on of B2B eCommerce platforms and calls for specially syndicated content. These conditions may further the argument by consolidators that liquidation may be a timely alternate in an environment where a shift to B2B commerce may be out of reach of smaller, resource tight, and those lacking internal skill sets to enter these advanced arenas.
Returning our focus to GAWDA, Nashville, we can recall the real value of the Educational Tracks. Once again, content envisioned, prepared, and delivered by our industry’s volunteer colleagues. All of the learning tracks had content important to their respective audiences.
A True eCommerce Success Story in the Making
One in particular, General Distributing’s voyage into the ecommerce world, was extremely enlightening. Beginning in an incubator with six of their IWDC colleagues, initially driven and supported by IWDC Vision, they formed a nucleus that encouraged their common ERP provider, Computers Unlimited, to move them forward toward an enterprise ecommerce solution.
In their Nashville presentation, General Distributing shared the step-by-step process leading them to the current ‘go live’ environment now ongoing with several of their important customers.
Their story is encouraging. It outlines an outstanding effort by several providers to form a partnership between Computers Unlimited, ES Tech’s EvolutionX eCommerce platform, and in GD’s case, content provider DDS, delivering unique talents to build a workable, coordinated solution.
It is by no means a fairy tale. It shares the truths – enormous hours of work, sticking to the plan, dedication of people, admission of shortfalls, but throughout it all, a willingness to see it through to the end goal.
Throughout, the owners’ commitment remained confident that team culture would drive success.
View the full case study below.
This success affirms a GAWDA commitment. To bring the best possible Business Solutions to its Membership. Members large and small may all benefit; by providing guidance that may help in determining the best future course for their member companies.
As we look ahead to future meetings, we once again thank GAWDA Leadership for providing a venue that reunited our friendships, provide content offering a view into a successful future, and allowing us to make informed decisions as to whether we will be encouraged to move our businesses into disciplines for growth, or choose to move on to life’s other alternatives.
- Ken Thompson