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Distributors Speak Out

Equipment Depot isn’t the only company that’s been involved with consolidations over the past few months. Companies on both the manufacturing and distribution sides of the business have used the downturn to join forces to survive. But what does it mean for the industry long-term? A handful of MHEDA distributors share their thoughts below.

“Some older business owners are looking to get out. As they do, others in the industry are using that opportunity to expand their geography and grow through acquisition. Regardless of the economy, you’re going to see bigger dealers. It takes such a capital investment to be in this business that it creates unique challenges if you are very small.” — Richard Sinclair, President/CEO, Jefferds Corporation (St. Albans, WV)

“It’s an enormous positive for the industry. We have too many manufacturers. We have too many distributors. This environment is good in the sense that it’s allowing for consolidation at both levels, which will make the industry as a whole more efficient going forward.” — Anthony Sessa, President, CFE Equipment (Norfolk, VA)

“Long term, we may see more foreign competitors who did not invest in infrastructure in this country finding that they cannot compete, which will lead to further consolidation among suppliers.” — Loren Swakow, President, Scott Lift Truck (Elk Grove Village, IL)

“After supplier consolidation, we’re competing with more manufacturers selling direct to end-users. There also seems to be a proliferation of manufacturers adding more distributors, so we’ve seen additional people selling products that used to be ours exclusively.” — Gary Ashley, CEO, Conveyors & Drives (Atlanta, GA)

“There’s so much competition that a little consolidation doesn’t hurt anything. There’s too much capacity out there, so hopefully that trend will take some pressure off pricing. When things pick up, it’s going to create a shortage that will push prices up.” — Greg Brown, President, WW Cannon (Dallas, TX)

“Much of the consolidation happening now is a function of creating efficiencies in a world where less capacity is needed than five years ago. The trend toward consolidation will remain, but it will be at a slower pace and will be more a function of opportunity.” — John Croce, President, Abel Womack (Lawrence, MA)

“If manufacturers use consolidation to better their products within a unique distribution channel, then it actually gives the dealership strength. If they try to push the same products through multiple distribution channels, then it puts the distributors in jeopardy.” — Cory Thorne, President, Southeast Industrial Equipment (Charlotte, NC)

“Distributors are now competing against their own products under a different label. It really forces you to find a way to differentiate yourself from your competitors, which is always a good way to do business.” — Tom Showalter, President, Herc-U-Lift (Maple Plain, MN)

“Larger manufacturers are dominating the marketplace. Some of their associated distributorships are going away and dealers are getting bigger and bigger. I think that will continue to be the tendency.” — Doug Ward, President, Hooper Handling (Hamburg, NY)

“Some consolidation is necessary, and I don’t see it as tied to the economy. There is a dynamic shift in the structure of dealers and their usefulness in the long-term future. A small dealer may still have viability some places, but in the major metropolitan areas, small dealers’ days may be numbered.” — Robert Kehley, President, Key Material Handling Equipment (Brooklyn, NY)

“Consolidating two dealers into one often means that they won’t sell the same market share as each did separately, so I would assume there would be some opportunities for us as our competitors merge.” — Paul Murgo, President, Tri-Lift (New Haven, CT)

“Industry consolidation makes the landscape bumpy but not unbearable. As long as you’re producing decent sales, you should be able to find alternate product sources, if necessary, and hopefully not be drastically affected by supplier consolidation.” — Kevin Katona, President, DACO Corporation (Kent, WA)

“In the short term, distributors are getting squeezed because the lack of business has prompted more manufacturers to go direct. In the long term, that relationship will come back and manufacturers will welcome distributors back into the mix because it’s going to be too hard for them to manage all the projects.” — Ron Paska, General Manager, Tyler Supply Company (Kalamazoo, MI)

“If consolidation in the industry means fewer forklifts out there, then maybe it will increase the gross profit on a sale. That would be a positive outcome.” — Russ Wilkins, President, Frontier Forklifts (Pearland, TX)

“Not everyone can survive in this economy, so we’re going to continue to see consolidation and acquisitions. It affects us because we’re used to doing business with one company, and then all of a sudden they’re a different company with a different culture and different products.” — Jeff Ross, President, ESS Group (Brenham, TX)

“Consolidation is good in the sense that it’s good to do some housecleaning, but I don’t like that someone ends up with all of the marbles. That doesn’t bode well for the end-user in a competitive marketplace.” — William Petro, President, Century-Fournier (Youngstown, OH)

“Quite honestly, I’m surprised that there hasn’t been more contraction among distributors. This has been such a difficult downturn for many of us that I would have expected to see more consolidation with independent distributors.” — Peter Lauder, President, McCombs-Wall (Orange, CA)

Material Handling Equipment Distributors Association

One comment

  1. Unlike past minor recessions, this one had manufacturers release more than just dead wood. Some distributors have taken this opportunity to hire quality people to suppliment the industry knowledge they used to depend on their vendors for. Forward thinking distributors will survive and flourish.

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