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© Copyright 2002, Trade International, Inc.
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What are Importers, Dealers, and Distributors
By: Jeffrey Matthews
Until the late 1970’s in North America, there was a distinction
between importers, dealers, and distributors. There were channels
of distribution. The number of stone dealers in the 1970’s were
small compared to today’s numbers.
THE IMPORTER
Most all importers in the marketplace knew each other. The importers
traveled the world in search of stone that they felt would sell in the
market place. Perhaps the stone was new like Violetta from Saudi Arabia
or Taiwan Green Marble. The importer would take the risk and bring in
some tiles and slabs and try them out in the market in hopes they would
sell. The importer many times stocked the material by the container/truck
load and sold through the local outlets in a specified territory either
through established distributors, dealers, or contractors for specific
jobs, by the pallet or box or bundle.
The importer would have to get this new material out to the customers and
in turn develop a market need for this stone in the design/architectural
marketplace. If there was no demand for the stone, then the distributor or
dealer did not want to handle the stone in most cases. The importer took
great risks and in most cases stones they brought in for sale that were
new did not work out in the long run. Probably 10 to 20 percent actually
had selling power.
The importer would also finance everything from the Letter of Credit to
the supplier to selling the buyer on open account and collecting the money.
An implied warranty was on the stone, which gave the buyer a sense of
safety and security. If the stone was not what the buyer thought it should
be or there were some quality problems, he sent it back or didn’t pay the
importer. The importer would work out a credit for such problems and take
care of it.
This all changed around 1980 when the demand for stone rose. Distributors,
contractors, and even dealers or owners/architects started to import
directly. The importer then had to change his strategy of buying and selling
stone. The risk of importing became a nightmare to many in the market place.
Even the producers overseas found new headaches and problems with the
buyers who did not know what they were buying or how to buy from overseas.
THE DISTRIBUTOR
The distributors' most important role was warehousing stone, and secondly
to have a showroom and or sales representative go out and show and sell
stone to the dealers, fabricators, and contractors. Before 1980 most
distributors were just this, warehouse sales companies. After 1980
distributors became importers.
To control stocks of tile, slab, and other stone products became a real
challenge. New computer systems came about just to try and handle this.
Mixing and matching shipments of stone became a challenge as well.
Predicting and having the right stock, color, size and quantity a buyer
might want is the challenge all distributors face and will always face.
Pricing this stock for the marketplace became increasingly difficult.
Exchange rates were constantly changing in the foreign market and the
replacement costs of inventory affected the sales. Competition with new
companies stocking was on the increase. This also affected the price of
stock. The quality or selection of stone changed the level of prices.
Since many buyers did not know various selections of a stone were available,
they too were not familiar with price differential. When new stones of
similar color entered the market from Greece, Turkey and other countries
not well known in the market place before, the pricing of stone again
became difficult and more competitive.
The market opened up wide and started swallowing all these new companies.
The channels of distribution from factory to importer, to distributor to
retailer/dealer all started to change. Importers started distributing and
retailing stone. Retailers started to import. Factory agents or
representatives started selling commercial jobs direct to the owners of
buildings or at least direct to the contractors. Prices again were up in
the air.
The favorite comment by many distributors and contractors in the 1980’s
was "I did not know that Nero Impala had three selections,
light-medium-dark." Or another comment was "Did you know that Crema Marfil
could be selected by grades such as Extra, First Choice, First Commercial,
and Second Commercial?" Each selection affected the price and most new
buyers who never traveled to the quarries and factories or had long term
experience with the stone knew of these issues. Information on stone was
and is still limited in its availability. Today more information is
available then ever before but still lacking in depth as far as architects,
designers, and serious stone people are concerned.
THE DEALER/RETAILER
Dealers prior to 1980 were not available in large numbers as they are today.
Dealers would try and support the importer or distributor by showing their
samples, and when a job came available, they would buy from the company
whose samples they used. Most dealers were in ceramic tile or stone
fabricating yards. The ceramic dealers would show small percentages of
stone in comparison to ceramic in vignettes, which were not always of
central focus in the showroom. The knowledge that most dealers had of stone
was very limited, which caused them to not promote and sell the stone well.
This lack of knowledge just promoted insecurity. They were insecure on how
to sell the variation of natural stone, how to install it, and how to
maintain it. Even today, some of these insecurities still appear, but are
quickly becoming addressed.
It was expensive and time-consuming dealing with the consumer on stone.
Luckily most consumers were not well educated about stone and did not ask
difficult questions or shop for the stone as they do today. The fabricator
would try and show larger quantities of stone to the buyers and work with
them on a more educated basis. The ceramic dealer would show a much more
limited sample range of the stone and not know as much about the stone
itself. Both dealers were competing with each other. The stone fabricators
did not want the ceramic dealer entering their domain. Only stone setters
should handle stone. During the 1980’s it became evident that the ceramic
dealers handling stone were here to stay. Specifications for the thin
setting of stone by ceramic installers became normal. It was also known
that ceramic installers could set stone tiles more cheaply. This did not
mean the quality of such installation was better, only the price.
In the 1980’s many of the dealers started to sway from the supplier of
the sample boards and shop the price on each and every sell. The
architect/designer in many cases did not give a lock specification for
the supplier and thus entered the term "and or equal". This is still
being defined today. The lack of support for the supplier of the stone
also caused many suppliers to put fictitious names on the stones to protect
themselves and give themselves and better chance of obtaining the sale.
Today the dealers have found that stone is and can be a serious percentage
of their business and are devoting much more prime space in their showrooms
to display stone. They are searching for stones that fit their clients
demands like buff colors, rustic stones, patterns and designs, trim pieces,
etc. Dealers are educating their salespeople about the do’s and don’ts of
stone. The consumers today are more educated then ever about stone, and are
asking more questions and shopping the stone purchases.
SUMMARY
Many changes have occurred in the last 25 years in the stone business.
Let us hope that in the next 25 years we all expand our knowledge and
appreciation for the stone we sell, and reduce the problems everyone has
that are a natural part of the stone industry.
Since the main aspect of selling thin stone tiles came about in the
1970’s new outlets for selling of the stone have had to develop like the
ceramic tile dealers. New installation also had to be established.
Adhesive companies started promoting new adhesives for thin setting
stone. Until 1970 the honed floor tile was more normal then polished
marble thin tiles. Now came about the need for another new market,
maintenance companies. "How to maintain this polished marble?" became
the leading question since 1980. The debate still continues.
The dealers have expanded and now there are ceramic dealers, carpet
dealers, wood flooring dealers, do-it-your self-dealers, and fireplace
dealers, just to name a few, are all selling or showing stone. The
fabricating dealer is today mostly concerned with wavy type granites and
kitchen countertops. These dealers have had to put in new machinery to
handle this product and produce the edge works and production levels
the market demands. With the introduction of water jet cutting machines
new designs in stone are available thus expanding the uses of stone and
the types of dealers of stone. With all this growth has come hundreds or
thousands of new stones and finishes from over 34 countries. The types
of stones being sold has also increased to travertine, granite, limestone,
marble, gabbros, sandstones, slates, onyx, quartzite’s, and many more
increasing the challenges of the importer, distributor, dealer and
maintenance company to handle the various finishes and types of stones
now on the market place.
Today it is even more difficult to differentiate between the dealer,
importer, and distributor. The distributor was considered originally as
the wholesaler of stone. Many of these wholesalers are selling direct to
the dealers and to the owners/architects. Most major distributors are
importing directly. It has become increasingly easier for anyone to import,
as it has been for most producers overseas to sell directly in the market
place. With the advent of computers, homepages and internet, more and more
people are learning about stone and able to communicate directly with the
factories then ever before and do so inexpensively. Stone trade shows have
increased to the extent that one can go to a stone show every month. They
normally are opened to the market place allowing anyone to go and see stone.
The stone business is well and alive. The residential market is carrying
most of the sales presently. The importer, dealer, and distributor are all
waiting for a strong upturn of sales in the commercial market. The
transition that the stone industry is in will continue for many years.
It is hard to foresee the future and who will survive. Stone and ceramic
tile will increase in sales yearly benefiting dealers the most. The
natural growth will be for the importer/distributor to become one and in
turn combine with the producers. Only time will tell if this actually
occurs.
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Last Modified on: February, 2002
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