Wishing For A Snow Day

To say the well has gone dry is not exactly accurate; last year was one of the best years in recent memory, precipitation-wise, according to ice melt manufacturers. But because of the winter’s generous helping of snowfall and wintry weather, the ice-melt product pipeline sits relatively empty, creating an unequivocal opportunity for distributors to pump new product in with preseason sales and premiums.

“The opportunity for preseason sales has not been better for years and years,” says Ken Ossian, president of the Davenport, Iowa-based Ossian Inc., a manufacturer of ice and snow melt products. “This is the best opportunity for distributors to get out there and sell ice melt.”

“There’s very little inventory in the system,” agrees Jack Kassabian, general manager, industrial sales and marketing for International Salt, a Clarks Summit, Pa.-based manufacturer. “The customers of the distributors have very low inventory levels. Distributors need to know that, and just go out and contact customers early — before someone else does.”

Manufacturers that had a good run on ice melt sales last year are not in the minority. According to an exclusive survey of ice melt manufacturers conducted by SM, 85.7 percent of manufacturers said sales increased in 2002-2003 over the year before. The other 14.3 percent said sales remained about the same. No respondent indicated that sales decreased.

“There are two key drivers with ice melt sales: precipitation and population,” says Steve Hewgill, sales/market manager for the professional division of Nu-Gro Corp., Brantford, Ontario. “We had snow where there’s people. We’re up 42 percent over last year.”

Despite similarly favorable reports from the front lines, manufacturers admit ice melt can be an unpredictable business.

“It’s a crazy industry. You can go out and have the best marketing program and everyone wants to buy from you, and then you don’t get the weather,” says Jon Lund, national ice melt account manager for E.C. Grow Inc., a manufacturer based in Eau Claire, Wis. “A lot of our success relies on us getting a lot of snow.”

Season’s Readings
Ice melt is bulky and seasonal — two traits that, together, can cause a logistical headache. However, manufacturers promise that distributors can make good money if product is delivered in a timely fashion when customers are in need. It’s also important that distributors and their customers plan wisely, since bulky inventory overstocks of ice melt throughout the summer can rack up costs in the form of valuable warehouse space.

Distributors should be cautious of order sizes and diligent in their planning, suggests Hewgill, even though planning, when it comes to ice melt, can be more of an art than a science. That’s why it’s important to work with a supplier who can turn around product quickly, he adds.

“It’s very volatile. You could be sitting on a bunch of product, then it snows, and you’re out right away.”

Proper planning to ensure that enough product is in stock can lead to increased profitability and customer retention. The weather doesn’t wait, and if an end user can’t get ice melt in time from his current distributor, he’ll turn to a supplier who can.

Hewgill says that while the margins on ice melt can be sizeable, those who market most effectively will net the biggest returns.

“Clearly, the people that do very well focus on preseason sales,” he says. “A lot of programs that are out there incite people to sell preseason. Our prices, preseason, are less so [distributors] can take that savings and pass it on.”

And marketing makes all the difference. A conscious commitment to getting the product in front of customers will show distributors big rewards.

One suggestion from manufacturers is for distributors to think outside the box when it comes to ice melt sales. They should consider the opportunities to grow this portion of their business. Kassabian recommends breaking free of the status quo.

“If they offer the product to all of the customers they sell other products to, they would expand the core or their base,” he says. “And if the salespeople offer all of the products, and explain the difference, they’ll be surprised at how many customers will move up to a more value-added product.”

How Fast Is Fast?
On a blustery winter day in 2000, a distributor called Ossian’s plant at 3 p.m. to request that a load of ice melt be delivered to its Des Moines, Iowa, location that day. The distributor was going to stay late and unload it. At 4:30, he called again, and requested a second truck be delivered.

“The customer unloaded it at 10 at night and it was all out of his place by noon the next day because he was the only one that had product in stock. The storm had wiped everyone out,” Ossian recalls.

Speed is the name of the game when it comes to ice melt. When roads and sidewalks are at their slipperiest and most dangerous, quick turnaround for suppliers, as well as distributors, is of the utmost importance.

“For us, fast is within 24 hours it’s out of our warehouse,” says Wice. If ice melt isn’t delivered quickly enough, sales can suffer.

“It stems from how prepared a distributor is. Some treat the business seriously and track patterns and history and keep a good safety stock in their warehouse. Others are not quite so prepared, and they keep stocks lower than they should. Unfortunately, they damage revenues, and profits.”

Economic factors may be one reason distributors rein in their ice melt inventory, but that might be a mistake, according to Millie Boss, product manager for Safe Step® and Winter Storm® branded ice melter products for North American Salt Co., Overland Park, Kan.

“Distributors who respond to sluggish economic conditions by keeping low inventories may ultimately hurt their sales by creating a backlog of orders that leads to lengthy turnaround times and unhappy customers,” she says. Boss advises distributors to maintain a healthy stock well before winter weather hits to assure maximum sales potential.

Preseason Push
Pre-selling puts product back into the pipeline, so distributors and customers aren’t scrambling to get their hands on product when the first snowfall hits. It also clears out manufacturer inventories so they can keep producing for the winter ahead.

Kevin Wice, president of Vancouver, B.C.-based Xynyth Mfg., Corp., says he always drives home the importance of pre-ordering with salespeople.

“I always recommend they go out to the marketplace early, and I suggest they put together some type of a program.”

Cash discounts for pre-booking by a certain date are one way to secure early orders; another way is offering some type of giveaway.

“One of the things our company does is manufacture and have available ice melt storage bins. They sit by the door and are refilled with the bagged product,” Wice explains. The refillable bins also come with a scoop.

“I’ve seen distributors offer a free storage program if they pre-book,” Wice continues. “I continue to see creative solutions that have been successful.”

“We provide incentives to grease the wheel, so it becomes a value to everyone to place an order early and get product in stock,” says Ossian. “It’s pretty standard that the person who gets the first order probably keeps the business.”

Training Pays
One way manufacturers draw attention to their products is by getting in front of their distributor-customers and helping them brush up on product specifics.

“Training people to use the product properly is important. It’s not to be used as a snow shovel,” says Hewgill. Educating customers on product usage, product differences, safety and the effects on vegetation and concrete will ensure users get the most out of their product purchases.

Education is key, according to the manufacturers SM spoke with. Forty percent of those surveyed said the skill they’d most like distributors to improve upon is educating customers on product differences. (Demand forecasting and pre-selling came in second and third at 26.7 percent and 20 percent, respectively.)

Manufacturers are attempting to help that process along by providing the necessary tools. Many have support materials such as usage manuals, electronic sales aids and tools, and educational websites. Most also spend time with distributors each year giving refresher courses on product use.

With all these levels of preparation in place, there’s still an element of wait-and-see in the ice melt business.

“It’s a weather-driven industry, and that’s where you have to hope Mother Nature helps you out a little bit,” Lund relates.