Buying Groups Help With Supply Chain Issues

What are some of the biggest misconceptions about buying groups?

Huffer: I don’t like the term Buying Group. I don’t refer to The United Group as a buying group. We are a Sales and Marketing Organization. My job as president is to grow relationships and put together programs with our suppliers, partners and others that provide sales opportunities for our Member Stockholders. They can then go out and compete for new business, in some cases business which they wouldn’t have had the chance to earn if they were not part of TUG.

Haines: The biggest misconception about buying groups is that a distributor will lose their “independence” by joining one. This is not the case with all groups. DPA, for instance, does not interfere with a distributor’s ordering, invoicing or shipping. We also do not force the distributor to purchase through “group headquarters” like some central-invoicing or private label groups might do. DPA’s core philosophy is to foster and support the relationships between our independent distributors and preferred suppliers. We respect a distributor’s autonomy and want to help them make the decisions that are best for their own company. What works for one distributor might not work for another.

How did your buying group help with the supply chain issues that came up in 2020?

Huffer: As everyone knows and is still experiencing, there is a shortage and allocation on nitrile gloves. One thing about TUG is we have always prided ourselves on being a family atmosphere and that was evident in 2020. I was able to find an alternative source for nitrile gloves, which had to be ordered in full container quantities and delivered to one warehouse. We had multiple members step up to offer their warehouse for deliveries, where glove orders would then be palatized and shipped out to the respective members across the country. It showed the camaraderie and willingness to help out your fellow member in a time of need.
 
Keough: The pandemic brought many supply challenges, and like many, we had to pivot our resources quickly to sourcing. Due to our strong supplier relationships and by leveraging the strength of the group, we were able to source sanitizer, dispenser stands, disinfectants, electrostatic sprayers, disinfecting wipes, and gloves from existing suppliers, as well as, new suppliers.
 
Haines: When COVID-19 wreaked havoc on the supply chain, DPA distributors had access to latex, nitrile, and vinyl gloves. We helped fulfil requests and paired distributors with safety suppliers and importers that owned factories in China. It is precisely due to our personal protective equipment (PPE) relationships that we were able to help our members when they needed us most.

Additionally, we successfully navigated shortages of hand sanitizer and disinfectant wipes. If we could not source product from an existing supplier, we established short-term vendor relationships to stem the tide until our traditional vendors restocked. We also were on top of the Small Business Administration’s Payroll Protection Plan and sent out timely communication with details and how to apply.

Where are your distribution centers and how does their location help your members?

Haines: DPA works to support each and every one of our distributors’ own brick and mortar locations. We do not think it is a wise investment to take on the role of a wholesaler which I believe would unnecessarily take money out of the distributor’s (and supplier’s) pockets. That is a lot of overhead and the money has to come from somewhere, even if it is increasing dues or reducing margins.
 
Keough: Our regional distribution platform is an exclusive regional distribution center for our member-owners. It offers many of the advantages that master distribution offers with the added advantage that 95 percent of the products in the RDC are not available to the competition. It acts as an extension of a distributor’s current warehouse with many of our member-owners referring to it as their “other warehouse.”

By purchasing from the RDC our member-owners have access to thousands of SKUs from over 40 Triple S Suppliers. This broader bundle of products enables you to place one purchase order and meet one minimum rather than 40+ minimums. Ninety-nine percent of orders ship next day and arrive 3 to 5 days later. This means getting your products faster, with one truck at your delivery dock, and one invoice to reconcile and pay. The RDC helps provide an overall reduction in total transaction costs. Our RDCs are strategically located in Chambersburg, Pennsylvania, Edwardsville, Illinois, and Sparks, Nevada, to service 85 percent of the US in 1 to 2 days.