MDM recently caught up with Jennifer Murphy, fifth-generation president of NetPlus Alliance, a family-owned distribution buying group out of Lockport, New York, to discuss how the organization has evolved in recent years and what NetPlus is doing to meet members’ diverse needs today.
MDM: What is the NetPlus Alliance value proposition today?
Murphy: NetPlus Alliance drives market growth and profitability for its members through stronger channel partnerships, individual and group growth rebate programs, progressive marketing and sales education. The distributors and suppliers in NetPlus maintain control of their business financials and relationships, as they leverage our benefit programs for mutual growth.
MDM: How has that value evolved over the years?
Murphy: Our team has done a lot to enhance the benefits that drive value back to the NetPlus membership, by adding programs like the Growth Plus sales planning program, which allows our distributors and suppliers to execute sales and marketing planning together. We have templates and resources available to support the activities that facilitate growth, including an online portal. Zach Brado, our director of business development, works directly with our membership to provide guidance, communicate actively and track progress to ensure success.
In 2018, we launched the NetPlus Academy, which is comprised of three components: business development, hands-on training and online learning. NetPlus works in partnership with Texas A&M on its Small Distributor Consortium. A group of NetPlus distributors have been working and collaborating with a team at Texas A&M over the last two years to learn how to utilize the right tools to navigate the rapidly changing industrial landscape.
I am proud of how we have worked together with our manufacturer partners to develop sales and product education for our distributors. We co-host up to 10 hands-on training sessions with manufacturers throughout the year, and work together to develop the educational content and recruit members to attend.
The third component of The NetPlus Academy is our online learning management system platform in conjunction with Tooling U-SME, which is application-based content. We felt strongly about choosing a partner that would provide our distributor membership with education on applications to a variety of different topics, from cutting tools to safety to general MRO, to help them educate their next generation of employees. NetPlus suppliers also have the option to upload their own content to the platform as well.
MDM: How are you supporting digital transformation for your members?
Murphy: The best thing that we can do is to be advocates for change and progressive thinking, to complement the traditional strengths that people have in this industry. It's important for us to communicate this as much as possible to our membership as well as to the industrial channel at large. NetPlus provides guidance through education and business services in the areas of digital and traditional marketing, ecommerce, price optimization and customer segmentation. Distributors and suppliers have to chart their own path on the digital journey; we make sure that NetPlus is providing the right tools and continuing to advocate for them.
Every year at our annual meeting we talk to the importance of embracing change and the importance of not working in your business, but working on your business. And keeping those changes at the forefront of what you're doing in your business. We host breakout sessions on various topics such as human resources, ecommerce, business financials and pricing strategy, that provide additional resources and information to our attendees.
MDM: How are you helping your members to be more competitive?
Murphy: Over the last five years, our average growth has been 15%, and in 2018 our total purchases growth between distributors and suppliers was over 30%. As NetPlus continues to grow and outperform the industry, so does our membership. Through our Advisory Council and an annual survey, we invite our distributor and suppliers to bring their issues and challenges to the table. We want to understand not only the pain points, but also the opportunities that will help our members outpace their competition.
Our team then works collaboratively with the group to develop solutions and programs that we can implement to support the greater membership. We also provide information about the industry and the economy through a quarterly publication called the NetPlus Industry Outlook, which is based on distributor feedback about the current conditions of the channel as well as economic research conducted by my father, Dan Judge and Lindsay Young of 3 Aspens Media.
NetPlus has networking groups that communicate through conference calls, and an email group, and also meet in person once a year at our national meeting. When distributors talk to other distributors about the things that are going on day to day in their business, they recognize that others have similar challenges and can help solve a problem that they recently solved themselves.
MDM: What is the dynamic like between your small distributor members and the larger companies?
Murphy: We do have distributors of all sizes. I really love our ecosystem of distributors, and whether they're large, small or mid-sized, they're all facing the same competitive threats from the economy, Amazon or the acceleration of digital influence on their business. We do everything that we can to help support them. We make all of our suppliers in all of the categories that we offer available to everyone in the group.
We have a profile that we work closely with as we evaluate potential members that are interested in joining the group. Our distributors need to be aligned with our base of preferred suppliers and make a commitment to be engaged with the group. A prospective distributor also has to have an active and growing business strategy, even if it is non-traditional. We have distributors that only have an e-commerce solution, some that only have a single or a small number of branches, as well as distributors with several verticals that have integrated supply across North America. Our larger distributors don't need us for the same things that our smaller distributors do, but they all gain a great benefit by being able to have access to the suppliers in all the categories that we offer and the ongoing business support that we provide to ensure their long-term success and continued growth in the industry.
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