What’s Happening: The Changing Role of Distribution

WORDS BY ROSA SOPHIA

Over the last few years, the line between retail and distribution has grown fuzzy, according to Dave Elkin of DOW Electronics. “Eight or nine years ago, it was still very much rules-driven— restocking fees and that sort of thing. We were just a wholesale step between the manufacturer and the dealer.”

But what changed? Elkin added that dealers wanted more of a retail experience for themselves. “If we want a high level of customer satisfaction, we have to adapt in that area for sure.” Elkin began his career with DOW in 1995, and the company itself has been in business since 1959. However, it wasn’t until 2012 that DOW began growing and expanding the 12-volt side of the business.

“It’s not just moving boxes anymore,” he said, adding it’s about “the education of both our internal staff and then helping our dealers stay up to speed on all the different technological advances.” There’s a lot going on, he noted, and cars aren’t getting easier to work on when it comes to installing aftermarket equipment. “It’s not only the equipment you have to train on, it’s the installation of the equipment.”

Elkin said part of the reason distribution has shifted so much in recent years is because shipping logistics were a lot different. “A lot of independent reps had to become the just-in-time distributor for some product lines,” he explained. “That’s run its course a little bit.” Today, DOW is able to ship product to most of the company’s territory with next-day service. “Our reach from a shipping standpoint is a lot broader than it was 18 years ago.”

Meeting the Needs of the Industry

About six months ago, Velocity Distributing opened its doors. Headquartered in Houston, Texas, founder Gary Wermuth recognized the need and answered it, according to Director of Marketing Chris Greenfield. “There were some holes in the Houston market specifically that needed to be filled, and that’s where we’ve stepped in,” Greenfield said. “Certain companies wanted a stronger presence in the area. There are a lot of shops here in Texas, Oklahoma, Louisiana and Arkansas, that might not be big enough to buy manufacturer direct from everyone, and we felt like that was a need. [We hope to offer] a stronger more modern approach in this area.” Velocity is still in its beginning stages of rolling out services for retailers.

In the near future, dealers will be able to log on to the Velocity Distributing website and look up any products they’ve purchased that have serial numbers. “If their shop gets broken into, for example, and the product that was stolen is tracked by serial number, they’ll always have access to it and they can log in and look it up,” Greenfield explained. “You can see the things you’ve ordered, you can reorder and you can see what other people have ordered.” The website is a continued work in progress, something Greenfield himself is working on. Velocity will also handle factory returns.

“On some stuff, if you have a problem, you can return it to us and we handle the return,” he said. “Our Houston marketplace is really big. We have a lot of dealers who will call in the morning or afternoon and do an in-store pickup.”

At their location, Velocity has also set up a “hand-picked area” to showcase available products. “We have multiple displays, the majority of what we have in stock. A lot of dealers might not know we have a particular new dash kit, or new lights from Heise, but it’s available in our handpicked area.”

Davis Distribution offers a lot of training opportunities for retailers, according to Nate Taliani, the company’s vice president of sales. “We also offer webinars several times a month. We’re very active on social media, YouTube, Facebook, Instagram and Twitter. We encourage our dealers to get active on social media. It’s very obvious that the dealers who are active on social media are successful,” he said. “We try to hit it from all angles. We use social media as a sales and marketing tool, and we also use social media to give tech updates and we encourage them. A lot of our dealers will take the stuff we post on social media and repost it also.”

Since its inception, DOW Electronics has supported the independent dealer, according to Elkin. “It doesn’t necessarily matter what we’re selling, you just have to know how to sell to them and understand their needs,” he explained, adding that a lot of the businesses the company deals with are mom-and-pop stores. “We tell our salespeople to recognize that their time is very, very important, so let’s make sure we’re cognizant of that and bringing value to them at every step of the transaction and every step of the customer experience,” Elkin said. “We’ve really focused on being a value-add. We’ve focused on that customer experience.”

For DOW, Davis and Velocity, training is paramount. Velocity Distributing intends to offer additional training in the future, according to Greenfield. The company also plans to offer training sessions in Spanish. “We have a training facility here in Houston in our main location where we can seat between 20 and 25 people,” he said. “We are also considering different creative ways of helping shops to better brand themselves. We’re leveraging better pricing for our clients, and that can be done multiple ways.”

DOW has several graphic artists and a marketing department that assists dealers in ad and content creation. “We do a lot of logo redesigns, shop redesigns and car and truck wraps,” Elkin added. “If dealers want to do any television, radio or billboard promotion, we have resources and contacts.”

On the Road—Supporting Retailers at Industry Events

Davis Distribution gets the most interaction with its dealer base at KnowledgeFest Indy, according to Taliani. “We also do Jeep events and events at marinas. If it’s an anniversary sale a dealer’s having, we’ll participate in that.” The company offers in-house remote start

tech support and will help market events for retailers. “Sales support is just a matter of us trying to keep them educated on everything that’s coming out, keeping them up to date, letting them know what options they have. If there’s a promo, we send it out so they can put their logo on it, distribute it to their customers, create their own eblast, or take that and put it out on their forms of social media.”

Recently, representatives from Velocity Distributing attended a grand opening party for the shop Extreme Off-Roading Performance, according to Greenfield. They were also present at KnowledgeFest

Dallas where they connected with dealers as a new distributing company.

“We have sales staff who are on call,” he said. “They call our dealers daily, weekly and monthly. We also make sure our dealers let us know how they like to be contacted. Part of our sales staff is dedicated to texting information and receiving orders via text.” Currently, the team consists of about 10 to 15 people, and they are looking to hire a marketing assistant.

Representatives from DOW Electronics will also attend retailer events. “We have a couple demo vehicles and we’ll do events at dealers’ showrooms,” Elkin said. “The marketing team will help promote it in their local area. Other times, they just want a body there for a grand opening. Much of the time, we’ll support them with one of our DOW vehicles at their event.”

According to Elkin, DOW has “an internal grand champion” for all its core lines and also offers in-house tech support which acts as “the liaison between the vendor and our salespeople and customers.” The distributor is able to offer additional trainings when vendor training resources are tied up elsewhere. “For example, while Compustar is focused on remote start season in the north part of the territory, we don’t see a lot of remote start season down here in the south, but we could still have some Compustar webinars or some training for some new dealers. We can help apply a little assistance while Compustar is busy with remote start season.”

The team operates both inside and outside the office. “They’re inside about two to three weeks out of the month, and then they travel one to two weeks, determined by growth and what’s needed in their territory,” Elkin said. “Most of them are 50/50 right now because we’re in a growth mode. I have a four-person inside sales support team that helps back them up when they’re traveling. When one is traveling, the others are helping cover for him.”

A Vision for the Future

Distributors continue to find new ways to support retailers, and they predict the role of the distributor will also continue to adapt as the industry changes. DOW Electronics has launched Smart Services, which offers dealers a fixed shipping cost, according to Elkin. “We launched it about two years ago. Our dealers on our Smart Services program pay us 50 dollars a month for the subscription. Once they’ve paid the subscription, they get everything shipped for free—whether it’s a single wire harness or a whole pallet of subwoofers. We’ve given the dealer a fixed shipping cost. They can count on 50 dollars being the most they’ll ever pay for shipping an entire month from DOW.”

An addition to this service—called Smart Courier—allows dealers within 25 miles of a DOW Electronics location to have same-day delivery. “We’re getting ready to expand it even further, and we have a couple other things we’ll be launching very, very soon. We feel we have a really good base of support that we can provide for dealers from the marketing side.”

Taliani remarked that continued growth depends on distributors staying on top of opportunities and “keeping the finger on the pulse of how business is changing out there.” Davis Distribution got involved in marine and powersports in the mid-2000s, which brought in a lot of new business, he said. “I think the future is really bright when it comes to premium amplifiers, speakers and DSP,” Taliani added.

At Velocity Distributing, Greenfield said the company is also looking into web-based solutions such as hosting more online trainings. The need for training classes in Spanish is evident, and Greenfield remembered another Spanish language class hosted by a different company which was standing-room only. “We’re looking into every [opportunity],” he added.

To help forge connections and provide education to the industry, Velocity recently hosted an open house. “Rockford Fosgate, Kenwood and Waylens held classes,” Greenfield said. “They were all standing-room only. It was a day-long event.”

DOW Electronics continues to grow, Elkin said. “We’ve been around for a very long time, but we’ve only really been focused on 12-volt for about the last six years. We’ve been able to make waves. I think our dealers are proud of the growth were bringing them. We recognize the symbiotic relationship we have with them. If we can help them concentrate on selling, they’ll be successful and in turn we’ll be successful.”

Elkin added that DOW Electronics will continue to focus on the customer experience. “Dealers have choices of where they can buy product most of the time, and there are very few lines that are exclusive to us,” he added. “So, we have to win those customers on our service and keep them there.”