PVFshare.com: Providing a new channel of distribution

BY MARY JO MARTIN
Editorial director

In a mature industry like PVF distribution, it is rare that a new business model enters the playing field. But the launch of PVFshare.com proves that there is still room for innovative new concepts in this channel.

Little more than a year ago, Paul Banville was presented with the idea of forming a clearinghouse of sorts for PVF distributor’s slow-moving inventory. He was at a crossroads in his career and after spending many years on the road in sales — first in the steel industry, then with a PVF master distributor and later with a tire manufacturer — he was looking for a change. Banville sought to capitalize on his broad range of experience, which included sales management, developing a distribution networks, global sourcing, contract negotiating, digital technologies, and P&L statements.

So he re-connected with an old business acquaintance, Ray Perrotti, who as Perrotti Sales Associates has been an independent manufacturer’s representative for 23 years. The two men began exploring what they believed the market place needed, concentrating on a building a network that would allow distributors sell their excess inventory. They began to construct a database that would be able to handle the diversity of product and accessories found in the pipe, valve and fitting sector.

“It was challenging to make this type of database robust and user friendly,” said Banville. “I kind of move forward with my foot on the gas pedal and not on the brake. So we built the database with about 5,000 items and then started running it by distributors that we believed were reflective of the larger marketplace. Almost to a person, they felt that this was a winning concept, which gave us confidence that we had come up with something that would be good for distribution. We’ve kind of created a flow chart that moves horizontally. One old-line manufacturer actually told us that we had created a new channel of distribution. In a way, so as to meet geographic market demands, product flows from one distributor to another distributor: horizontally. Word about our venture started getting out and we began getting requests from distributors who wanted to sign on as members.”

To generate interest in the venture, Banville attended the ASA Network ‘09 meeting this fall in Washington, D.C. Not only was he very pleased with the response he got, but was impressed with ASA’s new convention concept.

“Having been out of the industry for a number of years, I was very pleased with the changes I observed since I had last been to a traditional trade show,” Banville noted. “This was clearly a business-style meeting. Typically, wholesalers already know the product fairly well, and there are plenty of training opportunities provided in the field, so I believe that what they are really looking for is not a product show, but business meetings that allow them to build or strengthen a partnership with their vendors.

“That said, the timing of the convention was ideal for me to get out there and talk about PVFshare.com with distributors who are specifically in the PVF market. I was able to share with them how this process was going to work day in and day out. While some of them said they had heard of similar ventures in the past, once they learned more about PVFshare.com, they realized there were significant differences between what they had experienced versus what we offer. Attending ASA gave us that very positive response that we were hoping for.”

Tangible benefits

One of the key differences that separates this venture from others is that this is not an “overstock house” — they are not buying or offering stock for cents on the dollar. Rather, PVFshare.com is a network for distributors to get exposure for their excess inventory and sell it for closer to what it is actually worth. “We like to think we’re making a contribution that has a tangible benefit to our members,” he said.

Becoming a member, as Banville explained, is very simple: Once on the site’s homepage, a distributor simply needs to click on the “Become a Member” icon.

“This is basically a listing site, so to keep things simple, upon entering the site, the homepage is the index of inventory categories for pipe, valve and fittings,” he said. “When distributors select one of those categories, their search results appear immediately. ‘Basic’ membership is free and allows members to search the on line inventory, negotiate and purchase product directly from other members. The application is right online — and it just helps us verify that they are, in fact, a distributor. Within four to five days, they’ll get a response from us with membership approval. ‘Premium’ membership allows members, for a fee, to list their inventory by way of our 12-, 6- or 3-month plans. Our least-expensive plan is about the cost of a cup of coffee a day. Not a bad alternative to surplus pricing.”

Within one month of officially launching December 15, PVFshare. com had almost 50 members and is receiving more applications every week. Approximately half of the members are interested in selling product. Banville’s 90-day goal is to have approximately 200 members — and he believes they are tracking to reach that number. His longer-term goal is to increase that to 1,000 members within about five years.

There are two ways that sellers may post product. One is to manually enter items themselves through their own Member Toolkit on the website. However, PVFshare.com will also accept e-mailed product files from members and will download them into their database template.

In describing what he sees as the key benefits for those using PVFshare.com, Banville said, “Our mission is to focus exclusively on distributors to help them balance their inventories. We are looking to partner with firms that share our core values of authenticity, strength and building relationships. We hope to develop a good group of distributor members who, through this network, will continue to grow their networks. We provide them an opportunity to get to know one another without a middleman. That benefit is not to be underestimated.

“What I mean by that is when buyers see a product they want to buy, they can call the seller directly. They don’t need to go through us, because the site contains all the sellers’ contact information. So the buyer and seller negotiate directly with each other. In addition, sellers can see a history of members who have expressed an interest in the products they are trying to sell, so they can go ahead and make the first contact if they wish. Through the Member Tools tab, they can also keep a history of who has looked at their inventory and know what items specifically those distributors were viewing.”

Another valuable benefit is that the inventory has a high accuracy rate. Members receive, in real time, an auto notification of all inquiries on their items. And it prompts a member to adjust the item quantities in one simple, seamless step. Keeping the inventory fresh in this way, reduces buyer frustration and better serves all members. That notification also allows the selling member to pro-actively contact the buyer directly, negotiate and close a sale.

To promote this new venture, Banville is using a variety of methods, from attending industry events such as the recent PVF Roundtable meeting in Houston, to working with trade publications, to hiring Jeff Tierney as their vice president of sales.

“We appreciate our relationship with The Wholesaler because you cover the PVF industry with great depth and expertise,” said Banville. “In fact, several of the people who have contacted us noted that they first heard about us through your magazine. Ray’s agency is doing a tremendous job representing us in the Northeast. We’re also happy to have Jeff Tierney on board as our VP of sales An industry veteran of 40 years as well as a former owner of an industrial PVF distributor he brings great depth in the field introducing wholesalers to this new business concept and making as many connections as possible. It’s still a relationship business, and that doesn’t go away in a digital economy.

“We truly believe in a global marketplace because these products are in demand all over the world. PVFshare.com gives broad exposure for all of our members, and puts up no borders when it comes to selling their inventory. It’s all about giving our members the opportunity to sell their products worldwide.”

At the time of this interview in mid-January, Banville was exceptionally pleased with the comments he had received from distributors thus far. “The feedback has all been very supportive,” he said. Because of our unique concept and the number of distributors who have embraced it thus far, a large part of our job is to educate our customers in how this site can help them successfully turn their excess inventory into money.”

To learn more, visit www.pvfshare.com, call Paul Banville at 860/983-3979, or Jeff Tierney at 508/864-1990.