High efficiency and low prices will continue to be Orgill’s focus when serving pro dealers in coming years, the distributor’s president and CEO said Friday, Feb. 3.
“It’s brutally competitive at [the] retail [level]” Ron Beal told ProSales during an interview in Orlando, Fla., at Orgill’s Spring Dealer Market. “We spend an inordinate amount of time getting the right price. You can’t dodge the price issue.” At the same time, he continued, Orgill seeks “to be as hassle-free as we can. Nobody at retail has enough people right now.”
At another point he stressed Orgill’s drive to be “a very, very efficient distributor—having the right products, getting them [delivered] on time with a high fill rates. … Our distribution system is the most modern in the industry.”
Orgill recorded $1.32 billion in sales last year to more than 6,000 customers in every U.S. state, every Canadian province, and roughly 50 other countries. Beal said roughly 35% of that sales volume goes to home centers, another 35% to pure hardware stores, 21% to pro-oriented building material suppliers, and most of the remaining 9% to farm equipment suppliers. “Each of these categories is big enough that we are able to carry a full merchandise mix,” he said.
Orgill has been in business for 165 years, so it has seen more than a few economic slumps. Beal said the current downturn has made Orgill’s customers better at their job.
“The people that have weathered the storm have proven their ability,” he said. “People are more cognizant of total acquisition cost, inventory turnovers… they’re more sophisticated. EDI, finding ways to cut costs—all those things that when things were booming might not have meant much, now they’re taking a look at.
Beal said Orgill is looking for ways to cut transaction costs even further, in part by working with customers in such areas as fulfilling small orders. “It’s going to take some leadership by us to do that,” he said, but that doesn’t mean Orgill is going to dictate the use of technology; in fact, the Memphis, Tenn.-based operation supports roughly 70 IT systems.
Selling online to customers also is on Beal’s, and Orgill’s, radar. “In our category, the whole area of electronic commerce already is there,” he said. “I think that the retailers who put themselves into a position to use these tools is going to be at an advantage over those who don’t.”
Beal noted that while a lumberyard might have as many as 12,000 SKUs in stock, Orgill has 72,000. And with the distributor’s promise to deliver just about any product in two days, “there’s no reason for an Orgill customer to ever turn down a sale,” he said.