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The jan-san marketplace has become more crowded in recent years, as distributors in other sectors and big-box stores seek to gain more of their customers' wallet. "It seems like everybody is trying to grow their bundle to be able to provide more products and more value for the customers," says Ted Stark, president of Dalco Enterprises, a distributor of facilities maintenance solutions based in New Brighton, MN.
Stark was featured in the 7 Minutes With … segment of December's MDM Executive Briefing.
The increased competition may be good for customers, Stark says, because it provides them with more options and more competition tends to drive down price. "But it creates a lot of challenges for the distributors," he says, beginning with how to compete in the increasingly crowded space.
"One way is to certainly reduce prices and try to compete on price," he says, "but I don't think that's a real sustainable solution." For commoditized items, such as paper towels, price may be the primary factor for sales, but some items require more training or specialized knowledge.
A better option is to work with the customers to identify ways to provide more value to them overall, Stark says. "Not just looking at product cost, but also the cost of their labor and how equipment can be used," he says.
The conversation can also help uncover additional services or specialty products that may be useful for specific customers.
Stark also talks about the growing role of private label in the jan-san industry and how distributors can use private label products to compete in the segment.
Click on the video below to view the 7 Minutes With segment, or visit mdm.com/executivebriefing to see the entire Executive Briefing episode, including a conversation with Lee Schwartz of Schwartz Profitability Group on how to break through operational bottlenecks.