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Building a Future for Distributors and Dealers of Building Products

January/February 2006                                Volume 45,  Issue 1

AMD Headlines IN THE NEWS
The Diversified Distributor
How Value-Added Services Help the "Middlemen" Compete
by Carl Detering

Whoever said, “Let’s eliminate the middleman,” was probably not a millwork distributor. Turn on the radio and you might hear GEICO insurance advertisements brag about selling direct: “You can save 15 percent in 15 minutes.” From all the advertising they do, and the fact that Warren Buffet bought the company, it would seem that they must be pretty successful. 

So where does that leave us as distributors, traditional middlemen, in the supply chain between manufacturers and builders? It leaves us with a challenge. Add value both up and down stream or get out of the way. Distributors have to add value for both the manufacturers they represent and the customers they serve. What are some of the ways that we do this?

A List of Value-Adds

1. Knowledge of the local market;
2. Personal relationship with our customers;
3. Knowledgeable, consultative sales people;
4. Handling logistics including receipt, storage and delivery of the product;
5. Providing trade credit;
6. Technical product expertise on site for customers;
7. Stocking products to make them available when the customer needs them;
8. Stocking complimentary products so the customer can buy all related products with one order from one supplier;
9. Providing material takeoffs;
10. Rapid response to problems;
11. Handling warranty work;
12. Value-added production of door and window units;
13. Custom millwork manufacturing;
14. Sourcing specials;
15. Informing and educating customers on new products and supply issues;
16. Picking up unused material and issuing credit;
17. Stocking products appropriate for a particular customer segment;
18. Knowledge of local codes and regulations;
19. Referrals of qualified subcontractors; and
20. An attractive and convenient showroom.

A Perfect Performance

Hopefully, this is worth more than 15 percent. But, here’s the catch. Not only do we need to be able to perform close to perfection, we have to be able to perform consistently better, cheaper and faster than anyone else. 

This is where the Association of Millwork Distributors (AMD) becomes relevant. Through its networking, education, promotion, advocacy and industry leadership AMD provides its member companies with the tools and resources they need to be successful in today’s competitive market. 

The AMD convention and exhibit hall bring the world of millwork under one roof with world class speakers and tens of thousands of square feet of exhibit space where virtually every type of millwork is on display. Millwork distributors meet with their manufacturers, have focused discussions on products and marketing initiatives and find new products that will have an impact in their market. The Top Management Leadership Conference features educational topics to improve management skills and profitability. Networking with peers encourages discussions about best practices. 

Getting an Education

The AMD education initiative includes a variety of comprehensive and up-to-date educational resources that cover all facets of the millwork industry. It is now easier than ever for those involved in selling, or buying, millwork to access high-quality training. Educating our members about existing and proposed codes and standards, while working to keep regulations reasonable and cost effective for our members and their customers, drives an expanding advocacy role of the association. If you haven’t visited lately, check out our website at www.amdweb.com and see how AMD is leading the way to improving millwork distribution.

The famous economist, Milton Friedman once said, “The most important fact about a free market is that no exchange takes place unless both parties benefit.” It’s all about value. We provide value and I say, “Let’s celebrate the middleman,” especially, if they are an AMD distributor.

Carl Detering is president of the Association of Millwork Distributors of New Port Richey, Fla., and is president of the Detering Co. of Houston.


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