Speaking to sales agents working across the hardware channel, one of the greatest attributes which they all highlight they can offer clients is the experience that many of them have of the industry, experience that means they understand what retailers and suppliers are looking for.
Since the Global Financial Crisis hit the hardware industry (like others) so hard, cost efficiency has been top of mind for suppliers and retailers alike. Some suppliers for example have cut back on the number of reps that are out on the road in recent years. As a result, many are now using sales agents for those roles and other day-to-day jobs such as merchandising and even general stock upkeep.
Reducing costs is one of the benefits of working with sales agents. Neville Vujcic of sales agent Strikeforce New Zealand for one highlights the benefits that using an agency can have on the finances of clients: “Cost efficiency is a very big benefit of using a sales agent. Obviously we’re established and out there so we should be able to show cost efficiency over companies putting their own people out there.”
Another advantage of using sales agencies is quite often the leverage that can be exerted using their presence in a range of categories. Says Neville Vujcic: “The points of contact we have in-store versus if you’re a supplier and you’re in one category in a hardware store, we’re actually talking to half a dozen people in that store because we’re representing across a number of categories.
“Those people move around inside a store, so you have the benefits of the relationships that have already been put in place. And we’ll co-promote with some of our clients so there’s an advantage there as well.”
“At the same time as retailers are looking for more support from suppliers, most suppliers have been looking for retailers to work closely with them to promote their products”
NOT JUST A COST THING
Diane Malcolm at Hardware Sales Agencies (formerly mCorp) echoes these sentiments and has seen her business expand over the last year as a result of the success she has experienced. “The cost advantage to using a sales agent is obviously huge. I guess people are being smarter with their money, we can do just as effective a job as many of the company’s reps.”
Of course cost efficiency is not the only benefit for using sales agents. As well as saving money, the work put in by sales agencies can also mean clients can find time to develop other aspects of their work. Vendor Refill Management’s (VRM’s) CEO, Derek van der Vossen, explains that the work he and his team do allows VRM’s customers to focus on other aspects of the business.
“The bulk of our work is vendor in-store support in Bunnings and where we add value there is by doing our work we basically allow our customers, reps and territory managers to do what they do best and we basically do the day-to-day work.”
The training of the teams used by sales agents is also a key facet of the work done. For many sales agents, building the right team that fits the profile of the company is imperative to building and maintaining relationships, as Derek van der Vossen explains.
“We train our team on inventory control so in many cases they will know how to manage stock better than the suppliers’ rep. So the supplier has got sales people, but they’re not detail people. Quite often they’re not ‘dot the Is and cross the Ts’ people. Whereas that’s exactly the sort of people we recruit and we have quite a thorough recruitment policy to find the right people.”
As many sales agents working in the industry have personal experience in the hardware channel, be it on the retail side or supplier end, the product knowledge and understanding of how the market operates work nicely in tandem with the understanding of the end user, the consumer’s, need.
MAD ABOUT MERCHANDISING
In recent years, merchandising has become a major tool for the hardware channel. At the same time as retailers are looking for more support from suppliers, most suppliers have been looking for retailers to work closely with them to promote their products. For many sales agents, these two wants dovetail nicely together. In cases where the supplier is the customer, the sales agent will almost become part of the store.
“Merchandising has definitely become a bigger part of what we do and that comes down to the resourcing from our suppliers – they can’t cover all markets, their team would be too big and they couldn’t afford it so we fill that market with a need to help the merchant,” says VRM’s Derek van der Vossen, who continues: “They need to supply services and stay close to the merchant and often, doing merchandising in-store means that the team in the store can focus on selling to customers, that’s their primary function.”
While Diane Malcolm at Hardware Sales Agencies acknowledges that there is growth in merchandising in the sector, she emphasises the work her company does on other aspects: “Some companies have a greater focus on merchandising but our niche is sales, growing the business rather than the merchandiser’s business.”
With his company already established in the FMCG market, Strikeforce New Zealand’s Neville Vujcic sees hardware taking some sales from that sector in recent times and feels this trend will continue, especially with regards to high-volume, fast-moving products. This reflects the changes seen in hardware stores in recent years, accommodating a younger, family-orientated feel to many stores.
As a result, Vujcic feels there is “a huge need to have people in there on a regular and quite frequent basis to make sure you have the products on shelf. Something they possibly haven’t seen a hell of a lot before, but now that people are starting to break away from traditional grocery stores and are starting to find that they can find the same product cheaper in hardware stores, which needs to be supported more than the traditional suppliers to hardware are used to. So certainly using sales agents can be hugely beneficial.”
“We need to understand their business and they need to understand ours and it needs to be a partnership as opposed to just servicing products”
DYNAMIC RELATIONSHIPS, DYNAMIC INDUSTRY
Obviously having a good working relationship with clients is important and for sales agents having the skills to develop these relationships is imperative. For sales agents to work best with their supplier clients it is important for them to partner up closely with them.
“We become an integral part of them and they become an integral part of us. They understand our business and what we are able to do, they understand our personalities and that’s as close as we get to them. I say this to my clients all the time: ‘I don’t need to know how much money you make but I need to know how you make your money’,” stresses Neville Vujcic.
He elaborates further on the importance of understanding the business model of Strikeforce New Zealand’s clients and what makes them money: “We’ve got to make sure that have got enough input into their business and we need to make sure that those products that give them good profits and margins are in the mix of what we do for them as well. Then they make more money and are able to put more back in. We need to understand their business and they need to understand ours and it needs to be a partnership as opposed to just servicing products.”
Derek van der Vossen explains how close day-to-day communication works between the team at VRM and its clients: “We have developed some software so when we do the visits we can report back to our customers about what went on during the visit, what we discovered, the value of the orders we made and if there were any minor issues that needed addressing. Anything bigger than that our team just picks the phone up and gets in touch with the customer services team and resolves it there and then.”
Constant contact plays a vital role in the work of sales agents. Many agents have agreements with clients regarding the number of regular visits and interactions that they will make.
Diane Malcolm highlights the benefits of close relationships: “We know our [retailer] customers so well that we know how to get the best out of them and how to motivate them into selling our suppliers products and we can teach them how to actually sell the products to the customer, what questions you’re going to be asked and how to answer them.”
SEEING BOTH SIDES OF THE COIN
With sales agents working alongside retailers and suppliers, they offer an intriguing view on the industry as a whole. As a result of the work that they do, sales agents can offer some interesting insights and understandings from both the retailer and the supplier’s perspective.
With the industry seeing growth, the dynamics and mentality of the consumer has changed. In previous years, hardware products were seen as a necessity, almost a grudge purchase, whereas now there are certainly more signs of lifestyle blockers for example using the hardware channel for purchases that they have previously made elsewhere.
Neville Vujcic sees these changes through the work he has done in the hardware sector: “Hardware used to be something you went and got as an imperative, I need this, purchase. Now it’s actually something browsed and shopped. It’s not a grudge purchase anymore it’s a pleasurable experience and people impulse shop it.”
Certainly the DIY aspect of the market has seen huge development and increase in popularity, Diane Malcolm sees the increasing number of hardware stores opening as a sign of the growing market. This growth has also seen the expansion and rebranding of her company. Previously mCorp Sales & Marketing, the company is now Hardware Sales Agencies and has a new and informative website.
“I think there’s going to be some big growth in the next few years,” she says. “We’ve heard the growth in consents out there is phenomenal. I think it’s just going to get better and better. As a result our business has certainly grown. The industry is buzzing and we are looking forward to what will happen with excitement.”