The state of three-step distribution in the tool and equipment industry received a healthy vote of confidence during the Tool & Equipment Distributors Association (TEDA) 2013 Vendor Advisory meeting, held recently at the Turf Valley Resort in Ellicott City, Md. The 19th annual gathering drew a total of 160 pre-registered attendees, marking the strongest turnout to date. The 10 distributor member companies spent quality time with the 80 manufacturer members.
Distributors used the three-day event to see new offerings in all tool and equipment categories. These included new diagnostic tools, hand tools, air conditioning equipment, leak detectors, tire changers, power tools, TPMS sensors, storage equipment, lighting tools and more.
Glen Pratt, president of TEDA, noted that despite consolidations since the first meeting was held in 1995, more vendor (manufacturer) members continue to join TEDA, making it an increasingly important organization in the tool and equipment industry. In the 19 years since the first June meeting, attendance at the annual gathering has doubled.
TEDA, an incorporated marketing organization, provides marketing assistance to distributor members as well as pooled buying from tool and equipment manufacturer members. Pratt noted during the joint distributor and vendor business session that the organization’s objective is to improve efficiency in the tool and equipment distribution system.
Pratt also reviewed sales over the last seven years for distributor members and noted that the industry has posted strong growth since the recession that began in 2008. Distributor members’ sales increased 25 percent in 2010, 12 percent in 2011 and 11 percent in 2012.
Pratt reviewed sales trends by tool and equipment category, with battery service leading all categories with a 67 percent gain in the last quarter of 2013.
He noted that the core tool categories are hand tools, specialty tools and power tools, which collectively comprise 60 percent of total sales. The balance includes seasonal/allied tools, air conditioning tools, battery and electric power tools, electric testers, hand tools, lighting and lubrication products.
Focusing on distributor member customers, Pratt noted that mobile jobbers comprise 73 percent of distributor member volume while storefront jobbers account for 27 percent.
The organization’s marketing activities play a big role in its success, Pratt noted. Eighty three percent of the sales are derived directly from items promoted in TEDA member flyers. He noted that 90 percent of the sales of new products are from items promoted in quarterly flyers. “New products have to be promoted,” Pratt said.
TEDA’s distributor members produce 500,000 flyers per quarter, Pratt noted.
In addition, the organization produces 80,000 “TEDA Toolbox” promotional supplements. These are 16-page quarterly publications to supplement the members’ individual efforts.
The organization also provides marketing support through its quarterly member marketing workshops that focus on new advertising and promotional efforts with vendor members.
In addition, TEDA provides distributor members pool buying. There are 25 to 30 pool buys per year.
During the exhibit and display periods, distributor members visited exhibitor booths in 6-minute segments. There were 38 exhibits during the morning session and 36 exhibits in the afternoon session.
Following the exhibit and display periods, distributors attended 25-minute private conferences.