Get your company 
ready to hit
 the throttle in 2016

Starting with a sad note, we want to celebrate the passing of a St. Louis native, outstanding baseball player (we wish he had played for his home team), philosopher and person-most-often-quoted in this column, Yogi Berra.  We were saddened to hear of his passing.  We have used Yogi’s quotations for decades to add some humor and wisdom to this column and want start this column with just such a quotation:  “We were lost but we were making good time.”  This seems to describe some companies in our industry…going real fast but not sure whether it is in the right direction.  So we dedicate this column to Yogi and getting pointed in the right direction then hitting the throttle in 2016.

As part of getting pointed in the right direction, every year we like to do New Year’s resolutions list for wholesalers that suggests areas for focus in the coming year.  The idea is to briefly pause from the year-end rush, the holiday push and just clear your mind to explicitly chart a course for the coming year.
There are some focus areas that are the perennial favorites because, sadly, the industry continues its substandard performance, and others that are added to address the evolving state of the industry.  This list is certainly not comprehensive and may or may not fit your company’s needs.  Use it as a catalyst for your own thought processes and for the development of a highly focused list that becomes the flight plan for you and your team in the coming year.  We're introducing each item on the list with a special quote from Yogi.  

“We made too many wrong mistakes.”

Walking the talk — note we said you and your team above. One theme we hear a lot is that members of the ownership/management do not walk their talk as well as their team thinks they should.  Observations: 

• The level of scrutiny the executives and managers get is unfair.  The team watches every move they make.  They ignore the good moves and magnify the dumb moves made by every member of the supervisory team.  

• It’s been that way (forever), it’s getting worse and it is not going to get better in our lifetime.  Why do we say it’s getting worse?  Technology is now providing, just like for all the rock stars, actors and politicians, a way to broadcast every dumb move, ill-deed, ugly face and smirk that happens within the company or in public.  In the past there was no way to easily broadcast stuff to everyone so situations eventually cooled off.  Now, a text or a picture can be sent in an instant for everything people do adding it to the individual’s permanent record.  

• We have no solution except to remind execs and managers that their team has become an internal paparazzi that watches your every move.  Your behaviors (both good and bad) set a powerful example that will be emulated by your team.  

•  The level of scrutiny imposed by your team is exceeded only by the watchful eyes of a 4-year old son/grandson who, innocently and mercilessly holds his mother or grandfather accountable for every rule that is or ever was laid down.  

“A nickel ain’t worth a dime anymore.”  

Pricing — Do something in 2016.  Pricing, like the weather, is something that everyone complains about but nobody does anything about it.  This is not completely accurate but very few wholesalers have real pricing managers guided by a well-defined process for controlling their pricing.  

Most still grant pricing (in the form of uncontrolled price overrides) authority to people who have no business changing pricing and mistakenly think the 12%, 15% or 20% gross margin is where the market is.  They may be correct but it is often because these misguided people have driven the market down there though their irresponsible pricing practices.  It is at that those low levels in their minds but seldom in the customers’ minds resulting in squandered profit potential. 

Some think wiz-bang software is able to magically determine where the market is.  Industries far more sophisticated than ours know that the market is defined in the field so they employ shoppers and other field-based processes to understand the market.  They then fold that field-based market knowledge into their pricing.  Even the worst sales people are able to sell a dollar bill for 95 cents and customers would be dumb to refuse it when it is offered.  Start by getting a real pricing manager in place.  For reprints to remind you about what needs to be done, email or

“When you come to a fork in the road, take it.”   

Webstores – Many wholesalers continue to sit at the fork in the road doing nothing.  Some wholesalers still think the Internet is not impacting their business.  Most of those probably have their head in the sand. If you are a regular plumbing, heating or electrical wholesaler without a credible webstore, you need one.  While there are still some niche areas that have not been impacted, they are diminishing.  They take time, energy and intellect so get started now. We happen to know some folks in the webstore business.

“You can observe a lot by just watching.”  

Customer touch — Just like we noted in the pricing paragraph, an understanding of pricing is determined in the field.  Customer relations are also a field-based activity.  Technology has driven companies from person-to-person, to phone, to email and now to texting based relationships.  While state-of-the-art wholesalers use all forms of communication, it would be wrong to assume that face-to-face meetings are obsolete.  First-hand information is almost always the richest, the most accurate providing the best nuanced understanding.  Second-hand information is greatly flawed as it has been filtered and modified by the intermediary…even when they have the best intensions.  When the intermediary has a personal agenda, the information can become dangerous.  Get customer visits on your calendar and be sure to visit a wide spectrum of types and sizes of customers.  Each type and size has specific needs and sensitivities that need to understood in order to properly attract and serve them.

“Baseball is 90% mental and the other half is physical.” 

T-ball style coaching – We think the best coaches are on the field similar to the way a t-ball team of 4-year olds is run.  The coaches are on the field, with their players, giving constant stream of real-time suggestions, ideas, critiques and help.  While yearly performance appraisals may be useful for reviewing performance, evaluating compensation and setting objectives for the future, they are not good for guiding the everyday performance adjustments that help the team get to their optimal performance level.  It is done in real-time while everyone’s memory is fresh and at its most accurate.  It is also done in small bites instead of a year’s worth of incidents dumped on the table.  These full-year dumps are mostly overwhelming and discouraging (and can be costly for your company if an employee is not performing).  The great managers offer guidance in a very matter of fact way so people think of it as a normal part of the communication between supervisors and their team.  They reinforce the things that are right and they discuss areas for improvement along with what represents acceptable performance along with “how to” guidance as appropriate.  

“Congratulations. I knew the record would stand until it was broken.” 

Say thank you – People like to feel appreciated.  Customers, employees, teammates, suppliers, parents and even bosses (though not all) need to be thanked.   All of us have people that we need to thank.  Ideally great performance  is rewarded through proper compensation but when the economy is tight and raises are not always possible, thanking someone does make a difference.

“The future ain’t what it used to be.”  

Differentiate by adding value – We were recently paging through an old copy of THE WHOLESALER from the 50s and several of the copper fittings manufacturers were promoting the fact that their fittings were actually the size they were supposed to be.   We assume that was a differentiator at the time but now product quality is, for the most part, assumed to be acceptable. 

 Like copper fittings, many of our industry’s products have been commoditized so they are considered to be identical (fittings, pipe, valves) or having equivalent substitutes available in other brands (manufacturer A’s basic kitchen faucet is about the same as manufacturer B’s basic kitchen faucet).  When this occurs in other industries the battle seems to move to price or to services that are provided surrounding the product.  The place we go to get our oil changed has nothing to do with the oil or the price since those are essentially the same.  Instead it has to do with a nice waiting room with WIFI and snacks plus they offer a free car wash at the end.  Amenities add value to the technician’s life even though the owner doesn’t benefit from them.  Those small things can change/shape the buying habits of the person making the supplier decision.

“You’ve got to be very careful if you don’t know where you are going, because you might not get there.” Make a to-do list for the upcoming year and a resolution to check them off. Happy Holidays! 

Many of these topics have been covered throughout the year in more depth. For reprints on pricing, coaching, differentiation or websites, email us at or  

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