They’re squeezed in the middle of the supply chain, but they’re growing stronger and smarter. Today’s distributors are a vital support system for PMPs.
Jeff O’Brien calls his distributor nearly every week. He wants to talk product, but he’s primarily interested in digging for treatment protocol advice and finding out how other operators like him are handling pest issues, especially bed bugs.
In 2011, O’Brien started his business, Alright Pest Solutions in Lexington, Ohio. He’s not an industry newbie — he worked for a larger pest control firm for years before taking a general manufacturing job with nice wages to support his family. But last year, he decided to return to the job he loved most: solving people’s pest problems.
“I continued to refine my services, and I turn to my distributor for not only products, I run methods past them — find out what’s working, what’s not,” he says.
O’Brien’s distributor is a critical support system for his business.
Knowledgeable staff is the most important quality in a distributor, according to a PCT magazine survey of pest management professionals (PMPs), who answered questions about the quality and role of their distribution partners today. Behind deep product and industry insight, location and inventory drive a PMP’s decision to choose a distributor, according to survey results.
Meanwhile, a lot has changed in the industry in the last decade, and especially in the last several years with the proliferation of post-patent insecticides, products with more specific labels, distributor consolidation and technology advances. Add to that a challenging economy and a push toward just-in-time everything, from ordering to delivery.
|Distributors stockpile their warehouses with a broad range of products from manufacturers, allowing PCOs to “run lean.”
Distributors have responded by digging deeper into their roles as a complete support for PMPs.
Tommy Reeves, president at Oldham Chemicals Co. in Memphis, Tenn., says distribution has come full circle to the time when the Oldham family founded the distributorship.
“They offered full service to small, family-owned pest control firms and they were the training arm, they installed equipment, they were the inventory function and trouble-shooting — they provided credit, delivery and total logistics,” Reeves says, rattling off the definition of what we today call value-added service. “It was a turn-key operation.”
Reeves has watched the market move into the commodity game, primarily sparked by the mass production of products with “wide labels,” a thriving building industry and huge termite pressure. “That was a big bubble, and the bubble popped,” he says.
Now we’re back to where we started, if you ask Reeves. And that’s a good thing. “I really see a complete evolution [of the distributor’s role],” he says.
Today distributors are focused on delivering training in various formats, including business-building seminars and online CEU sessions. They tease out manufacturer marketing jargon to help PMPs make product decisions that fit their budget and client needs. Distributors are delivering products faster than before, because PMPs say product access is a must. They’re providing lines of credit for cash-crunched PMPs, and act as a warehouse so PMPs can run lean.
“Most of the time, we are kind of the silent partner in the industry,” says Karl Kisner, director of marketing, Univar Environmental Sciences. Kisner and other distributors say that’s the way it has always been.
“Manufacturers are the ones introducing new products, and PMPs are out there directly solving problems for customers in the field,” Kisner continues. “But I don’t think the recognition for distributors has been there. It’s the distributor that makes sure that products are delivered on time, and can help PMPs choose what products will really help them.”
Managing mindshare. The sales team at Forshaw Distribution is equipped with tablet computers that are loaded with thousands of MSDS labels, product sales sheets, marketing materials and online training programs. “When they are making sales calls to PMPs, they have all the information at their fingertips,” says Sales Manager Thomas Forshaw IV.
The way knowledge is siphoned through the supply chain from manufacturer to end-user has dramatically evolved in the last couple of years, particularly with the use of tablets that add tech-portability to the picture. Now, distributors have the tools to show and tell, in person.
Spending time in the field cannot be replaced by Internet communication; but the to-go nature of tablet technology allows distributor sales reps to bring PMPs vital training and product information.
But website resources are also getting a lift these days. Forshaw created a page for PMPs called e-source. This gives PMPs online access to labels, MSDS, training and manufacturing marketing. “Pest control companies that take advantage of and really use that information can make decisions more quickly and get back to providing service,” Forshaw says.
PCT’s distributor survey cited training and continuing education as one of the top five services PMPs value most in a distributor relationship.
Distributors today can’t talk enough about offering these resources, Kisner says. “We must remind our customers of the value that we bring to them, whether it’s technology, tools or access to information, so they understand we are one source with countless resources,” he says.
PMPs say they rely on distributors for general knowledge and specific details on products and usage. Distributors, in essence, are a supportive help line, open all the time. “If I’m having a problem, my distributor can usually answer my questions,” says Steve Painter, owner of Catch-It Wildlife & Pest Control in the Kansas City metro area.
When Painter added pest control to his wildlife control company 10 years ago, he frequently stopped in to his local distributor to ask chemical and application questions. “They have expertise in product labels, and that’s what I used them for,” he says.
And more than ever, distributors are charged with the role of delivering information, from helping with pest identification to providing educational sessions so PMPs can earn continuing education credits.
“The manufacturers create effective products for managing pests, but sometimes the proper application procedures get lost in the process,” says Ed Hosoda, vice president of Cardinal Professional Products. “Our biggest challenge is to make sure that products are stewarded correctly, used properly and safely, and the quality of applications are maintained at a high rate.”
Meanwhile, Chris Donaghy, CEO of Residex/Tufgrass, notes that university extension services are more stretched. “All those land grant universities on a state budget with federal dollars are underfunded in this economy,” he says. “So the whole extension service program is no longer the vibrant resource it used to be, and they would provide services like troubleshooting, identification of unusual pests and things of that nature.”
That said, distributors maintain close connections with university extension offices and independent industry consultants. When PMPs have a pest I.D. question, the distributor taps into its network. Plus, distributors’ sales representatives are experienced in the industry, often as former pest control operators or manufacturing expatriates. (What’s more, a workforce of people formerly employed by manufacturers has supplied distributorships with a cast of professionals with deep knowledge, Hosoda says.)
“Our relationships plus experts on staff feed into a powerhouse of training and licensing opportunities for PMPs,” Forshaw adds. Forshaw offered its first Executive Camp for PMPs last year, inviting PMPs to a two-day lineup of presentations covering banking, insurance, computer software and more.
How much is training worth?
Target Specialty Products gives PMPs a value-added invoice that shows how much some of the resources they provide would cost if the PMP customer had to pay. Putting a number on the value helps PMPs understand exactly what they’re getting. “Education is our competitive advantage,” says Susan Vance, director of marketing communications.
Distributors Speak Out
The products today are more pest-specific than they used to be. The challenge for us is to make sure our clients get the products that they need and that we are stocking the correct products.” — Thomas Forshaw IV, sales manager, Forshaw Distribution
A manufacturer is not going to have the amount of foot soldiers in the field that can interact with the depth of customers that we can. We have over 70 outside sales reps and 100 customer service reps that are talking to PMPs every day and learning about their unique challenges, what they face day in and day out. We collect that information and share that with our vendor partners.” — Karl Kisner, director of marketing, Univar Environmental Sciences
There is a greater burden on the distributor to provide a lot more of the support that many suppliers once provided to the end-user PMP.” — Christopher Donaghy, CEO, Residex/Turfgrass
The products we use are changing to being lower in toxicity, effective in controlling pests at lower doses…and will be sustainable for the future. Because of this, the supply chain has to be more involved with product research, transfer of technology and product stewardship or training.” — Ed Hosoda, vice president, Cardinal Professional Products
Supporting products. Everyone’s working just in time. “It’s clear that manufacturers have reduced their inventory levels, and that has created more stock-outs for the distributor than ever before,” says Bonnie Fallon, director of operations at Ehrlich Distribution in Reading, Pa.
The good news is, there are more realistic manufacturer programs today: “The day of the big buy-in is over,” Fallon says. She believes this will have a positive financial effect on the industry in maintaining product profitability.
With stockpiling the warehouse a thing of the past, distributors must forecast and buy carefully to strike a delicate balance between overstock and out-of-stock.
PMPs demand on-time delivery, according to PCT’s report. And if product is not in stock, they expect it the next day. “Because of the technology and tools available, our customers want to access information and products faster than before,” Kisner says.
“That means making sure we have the right products at the right time,” Kisner continues. “It’s ensuring there is very tight coordination [with the manufacturer], and that’s the key role of the distributor. We understand the needs of the ultimate end-user and are able to relay that back to manufacturers through proper forecasting.”
But from to time, distributors have to disappoint a customer because a manufacturer’s shelf is empty of a desired product. The quest to run lean can introduce hiccups. And bring occasional disappointment, Kisner says.
“As with so many things, speed and timeliness is critical,” Kisner says of today’s supply chain.
Meanwhile, a proliferation of generic products entering the market can add a burden to the distributor’s role if the maker doesn’t provide the type of vendor support that competing key brands do. And generally, generics are saving cost in the support area, Donaghy says.
“With the value-based distributors that play the price game, you’ll see a closer alignment to the generic companies that provide virtually no support other than cheap product,” Donaghy says, noting that PMPs must decide what’s more important: the absolute lowest price or getting the support they need. “If they make the wrong choice and opt for price over value, then they can find themselves in a world of trouble and hurt that includes [dealing with] regulatory issues,” Donaghy says.
Reeves adds: “The product support [from generics] to the end-user is almost zero. And I still question the liability coverage.”
So distributors have to choose carefully what products to stock — and there are many more options today. In some chemical categories, there may be up to 10 different product options because of generic alternatives.
“As a distributor, we can’t carry all 10,” Donaghy says. “We might manage our inventory by selecting three of the most profitable or most effective. Back in the day, you didn’t worry so much about paring down SKUs because you weren’t concerned about having a top-heavy warehouse.”
Univar Changes Name, Announces Live Chat
Univar Inc. announced last month that its Professional Products and Services (PP&S) division changed its name to Univar Environmental Sciences. The firm said that while the name has changed, the mission of Univar Environmental Sciences remains the same: to aid public health and pest management professionals in protecting their customers’ communities, homes and lives, helping keep them disease and pest free.
This name change reflects Univar’s passion for and commitment to client satisfaction and its sharpened focus on the markets that offer Environmental Sciences products, the firm said.
“Our name change to Univar Environmental Sciences allows us to better convey our position in the marketplace and helps our customers better understand the markets we serve,” says Karl Kisner, director of marketing, Univar Environmental Sciences. “The new name also allows for greater clarification of our role as a division of Univar as we continue our global growth so our customers can recognize the Univar business that will assist them.”
Univar Environmental Sciences also has adjusted its website URL to match its new name, www.univares.com. Visitors to the previous website will be redirected to the updated address.
In other news at the firm, Univar Environmental Sciences announced the launch of PestWeb Live Chat. Univar customers can access the new feature via the Live Chat button found on
PestWeb (www.pestweb.com). PestWeb Live Chat adds a new dimension of information accessibility for PMPs who have questions about pest control products, insects, weeds or Univar’s services. Through the Live Chat function, Univar customer service representatives are online Monday through Friday from 8:30 a.m. to 7:00 p.m. EST to assist PMPs.
“Univar Environmental Sciences has always been on the leading edge of supplying innovative tools to our customers,” Kisner said. “We’re pleased to add this new tool to PestWeb so that customers can reach us through their preferred manner — in person, over the phone, and now online.”
But keeping products moving off the shelves is exactly the business distributors are in. And this introduces another value-add they provide the PMP: credit to enable them to purchase those products. “A lot of distributors play the role of bank to PMPs,” says Donaghy, noting that today’s lending environment can be tough on small businesses that need lines of credit to buy inventory. “They aren’t going to get product if they don’t have the cash flow.”
Meanwhile, distributors walk another tightrope: “We have to convert our inventory on the shelf into cash, and our other form of ‘cash’ is uncollected sales,” Donaghy explains.
Cost saving is a goal every player in the supply chain shares. Fallon says the key for thriving distributors is to focus on their most important assets: customers (PMPs) and co-workers. “For those distributors with financially sound businesses, cost-saving processes in place and the right employees on board, the future is bright,” she says.
Thriving in the middle. Call it consolidation or diversification — that depends on who you ask in the supply chain.
Growing distributors recognize that holding market share and expanding their customer base of PMPs means offering more options. So they grow by acquiring small distributorships. That’s the diversification angle.
Or, call consolidation an effort to strengthen and streamline operations. Either way, it has been the talk since the mid-1980s, Reeves says. “And consolidation basically is not a threat,” he remarks.
It’s not bad for business either. “The industry has survived and grown in almost every segment except for pre-treat,” Reeves adds.
Rhodes Chemical Company Celebrates 50 Years
Editor’s note: Kansas-based Rhodes Chemical Company was recently recognized at the UPF&DA Spring Conference for 50 years of service to the structural pest management industry. The following article, reprinted with permission from the Missouri Pest Management Association, chronicles the history of Rhodes and its founder and President Roland Rhodes, an industry icon.
It’s no surprise that Rhodes Chemical Company continues to be not only a respected industry distributor, but a leading educational resource for pest management professionals. That’s because its president, Roland Rhodes, has been a proponent of industry education – ever since he founded the company in 1962.
|Rhodes Chemical Company employees on hand for the 50th anniversary celebration included (from left to right): Front row— Debbie Ball, Winona Rhodes, Roland Rhodes and Lori Irons; back row — Lynne Moore, Jack Watkins, David Bulk, Paul Neill, Doug Moore and Mike Stock.
Rhodes’ own educational background dates back to World War II. During the war, Rhodes served at a naval hospital in Seattle, Wash., where he helped treat wounded veterans from the Pacific Campaign. Upon returning home, he enrolled at the University of Kansas, where he graduated with a bachelor’s degree in chemistry in 1949. His first post-college job was as research and quality control manager for Real-Kill Company, an insecticide formulation company that sold retail products to treat household insects. He first attended the NPCA (now NPMA) convention in October 1957 and the Purdue Pest Control Conference in 1958.
Rhodes became a charter member of UPF&DA in 1968, and has been the treasurer of UPF&DA for more than two decades, as well as a member of RISE for many years. He joined the Entomological Society of America in 1971 and also is a Board Certified Entomologist (BCE). Rhodes Chemical Company continues to support Purdue University, the Entomological Society of American, NPMA and seven state pest management associations in the upper Midwest. Additionally, Rhodes has established college scholarships for entomology majors at six universities: Purdue University, University of Illinois, University of Missouri, Kansas State University, University of Nebraska and Iowa State University.
Missouri Pest Management Association (MPMA) President Bryan Ninichuck, president of Wingate Environmental Pest Control, Columbia, Mo., said MPMA has benefitted from Rhodes’ commitment to education and promoting the industry. “This commitment to the industry is obvious. It starts with Roland at the top and trickles down throughout the entire company,” Ninichuck told PCT.
Consolidation can somewhat change the game, Vance says. But distributorships remain a vital part of the supply chain. “Distributors are not going away,” she says. “However, what is happening is the dynamic of who’s who and who is with who is changing.” For example, a competitor of Target Specialty Products is owned, in part, by a private equity firm.
But from the pest management professional perspective, consolidation means fewer distributor choices in a given market. “For the PMP, they need the products and they need options of where to buy those products, so I don’t think consolidation will ultimately be in the PMP’s best interest,” Forshaw says.
“I don’t think there are enough choices,” says Painter, adding that he has changed distributors recently. This PMP would like to see more options. “Choices are good — you don’t want to have three guys (distributors) on the block and that’s it.
Competition is good.” Competition keeps businesses sharp. And, according to Kisner, it enables large distributors to reach more PMPs and serve them better by offering a broader range of products and more “foot soldiers” in the field to help grow their businesses.
“Consolidation is an obvious trend, and I think there is a potential that could continue for a little while yet,” Kisner says.
Like any successful business today, distributors that are growing do so by working smarter, embracing technology and staying close to the customer.
“I think we have proved as an industry that we are recession-proof,” Reeves says. “This industry had an opportunity to flat-line four years ago, and the patient is still up and doing quite well.”
UPF&DA Helps Promote Distribution, Suppliers
|(Left to right) UPF&DA Executive Director Valera Jessee, UPF&DA President Larry Eichler and PCT Publisher Dan Moreland (far right) present UPF&DA Treasurer Roland Rhodes, second from right, a plaque commemorating his 50-year commitment to the industry.
The United Producers Formulators & Distributors Association (UPF&DA) was formed more than 40 years ago with the goal of bringing pest control manufacturers, formulators and distributors together to advance the pest management industry. UPF&DA’s mission is to bring a standard of excellence and enhanced professionalism to the structural pest control industry.
The photos featured here are from UPF&DA’s Spring Conference, which was held April 24-26 in Las Vegas. At that meeting, four companies were approved for UPF&DA membership:
Chuck Synold, vice president, Target Specialty Products, discussed the local Las Vegas market at the UPF&DA Spring Conference. Target opened a facility in Las Vegas 30 years ago; despite the current economic challenges, “the pest control industry in Las Vegas didn’t fall as steeply” as the rest of the local economy, a testament to the recession-resistant nature of pest control, he said.
During his presentation, Synold said unemployment in Las Vegas tops 12 percent, 1 in 16 homes is in foreclosure and 58 percent of homes are “underwater.”
Other speakers at the spring conference included Rollins’ Chris Gorecki, Mississippi State University’s Dr. Jerome Goddard and PCT Publisher Dan Moreland.
|Photo left:Jim Sickora, Ehrlich Distribution (left) and Jack McClure, Chemtech Supply. Photo right: Chuck Synold, vice president, Target Specialty Products, spoke about the Las Vegas economy in his welcoming address to conference attendees.
|Photo left: Chris Gorecki, vice president of government affairs for Rolllins and chairman of the NPMA Legislative Committee, said, “We appreciate all the things you (UPF&DA) do to support the industry.” He spoke about the EPA Rodenticide Risk Mitigation Decision, pyrethroid label issue and the Endangered Species Act. Photo right: Mississippi State University Associate Extension Professor Dr. Jerome Goddard spoke about bed bugs in one session and the necessity of pesticides in another.
To learn more about UPF&DA, visit the association’s website at www.upfda.com.
The author is a frequent contributor to PCT magazine. She can be reached at email@example.com.