1st Day Thoughts from IDEA’s E-Biz Forum in Vancouver

The E-Biz Forum started yesterday with a packed crowd. Due to last minute registrations, attendance is over 200 people … more than IDEA expected.

Yesterday’s sessions were well attended, and informative:

• Adam Fein launched the conference with an overview of the Forces of Change facing distribution industries and emphasized that private labeled product usage will rise and the sharing of POS data he foresees as issues that will affect distributors.
• I conducted two break-out sessions.o The first, The State of Private Labeling, was very well attended. If you would like a copy of the presentation, email me. The essence of the message is that there is much interest on the topic, that all elements of the channel are concerned about the impact on margins and brands, and that many are searching for strategies on how to compete.
• The second session was The Changing Landscape of E-Invoicing. Decent attendance, but this session competed against a net pricing session (guess which session had more people!!). To learn more about this, look for our upcoming white paper and register for our webinars sponsored by Billtrust.
• A takeaway from conversations regarding the net pricing session is that many manufacturers appear to be unsure about providing net pricing information. Key concerns seem to be the overall lowering of the price for the item.

As one would expect, the recent changes at IDEA have created much hallway conversation.

The Feds announcement yesterday of a ½ point decrease in the interest rate gave rise to this thought …

• Many electrical distributors claim their SPAs or ship and debits once a month….usually with a 30 day period.
• Many manufacturers pay, totally or partially, some amount of this debit within the next 30 days….that’s a total of 60 days.
• If a claim gets kicked back by a manufacturer because of bad data, which is often the reason – wrong UPC number, wrong price, etc), then the distributor is looking at 90+ days to get their money back. Some are much longer is getting resolved.

So think of this as a balancing act. If you have to wait 90+ days for credit from a manufacturer and are waiting to get paid from your customers, given that DSO’s are increasing for many, just how vulnerable is your cash flow and if inflation starts up, what will be your cost to carry that claim money. In talking with a bank economist this afternoon I was told that this was about the U.S. not being protected from inflation of other economies any more…… just something to think about. Synchronized data and utilization of standardized SPA processes can help reduce your turnaround time and improve your cash flow.

More coming tomorrow from Vancouver.