The competition for your data dollars is increasing. Thanks to our readers, we’ve recently received the latest communications from Trade Service and IDEA, and they appear to be divergent in style.
The Trade Service communications appear to be positive and sales-oriented, indicating little has changed to their product offering. IDEA, on the other hand, appears to be scrambling to refine their product (the IDW).
Copies, and commentary, of the communiqués are below:
Trade Service
- Trade Service sent a letter to manufacturers, presumably all 618. The message was positive, reassured the manufacturers that “our 1,000+ distributor customers will continue to receive your data, without any interruption” and that they are developing “a number of initiatives designed to improve synchronization between you, your customers, and their customers.”
- A letter was also sent to a number of distributors (our copy came from an IDW user) stating that Trade Service provided its last weekly transfer of information on July 17. Additionally, it stated, “Subsequent to July 20, you will no longer receive Trade Service data from IDEA, nor will you be provided updates. To ease this transition, we’ve agreed with IDEA to allow your business to continue to operate with Trade Service-provided data until August 31. As of that date, the data sharing Agreement requires that your company purge Trade Service provided information (which presumably includes commodity codes) from your business systems.
Sounds like someone knows where there is a sales opportunity. Unless a distributor can operate their business 100% using IDEA supplied data, inclusive of product codes, perhaps the only solution, legally, is Trade Service, unless they wish to solicit information from manufacturers?
IDEA
-
Last week IDEA sent two emails to its customers. The first email briefly talks about migrating to the UNSPSC codes, “This memorandum is designed to help the electrical supply chain become better acquainted with industry standards and an important transition from legacy industry product codes to the United Nations Product and Service Codes (UNSPSC) over the next several months.”
Question: if this is over “the next several months”, how does this help
distributors who have an August 31 deadline?
- The second email was entitled “IDW UNSPSC Clarification”, inferring the first email wasn’t clear. There were two attachments. One was an “UNSPSC Educational Document” and the other was a code conversion chart to show how to convert the proprietary commodity codes to the UNSPSC codes. (Based upon legal advice, we are not providing this document.)
Trade Service also recently posted an article entitled “Why Commodity Codes Continue to Work for Electrical Distributors” explaining why its commodity codes are more representative than the UNSPSC codes.
A couple of thoughts:
- After reading the educational document, it seems to make sense if you are a distributor focused on large industrial accounts, government business and maybe large institutional business, but only after doing your homework with your customers to see if they are using these numbering systems. The United Nations’ history in getting much adopted in a short-time period is not something to write home about.
- If the commodity codes are proprietary/copyrighted to Trade Service, how can IDEA, legally, promote and provide the data, after the expiration of the agreement, to its customers. Seems fishy and questionable from a legal standpoint (let alone ethically). Wasn’t there a court case involving Material Express regarding the proprietary nature of commodity codes?
- How much effort will it be for distributors to write translation tables to accomplish this (or will software companies charge)? Unfortunately, time is of the essence.
IDEA soliciting data: We’ve also heard that IDEA will now be soliciting data from manufacturers and is arranging for a source(s) to enter the information into a system for them. We haven’t heard if the data will then be DAC approved. Supposedly there is no cost for manufacturers (which presumes that IDX revenues will be used to pay for the expense). And presumably IDEA has considered the maintenance process to ensure product and pricing updates, as well as new products, are addressed?
Given that IDEA is the product of two associations, from a “customer” / owner viewpoint, it would be advisable that participating distributors and manufacturers understand their data sourcing and populating process. Transparency in associations is essential to gaining credibility.
Confusion in the numbers? A couple of recent postings on tedmag.com attempted to share additional information. In one posting, IDEA/TED claims that “640 manufacturer brands” are represented. An interview conducted with IDEA by TED stated that only 18% of its content came from Trade Service and that it had “previously sourced” 50% of what it was getting. In an Electrical Marketing article published July 25, Bob Gaylord said that “700 manufacturer brands” were represented and that “the IDW feeds data nearly 400 of the industry’s largest electrical distributors.
Questions…
- How can tedmag.com state 640 and EM almost 700? One would think that IDEA would be accurate or at least consistent?
- If IDEA was receiving so much data directly and had such a significant number of distributors downloading data, why hasn’t this been promoted before (given that IDEA has done pretty well with marketing over the past couple of years)?
- How many manufacturers do these brands represent? Consider how many brands Thomas & Betts or Hubbell offers?
- If IDEA was receiving so much content from manufacturers, then why need Trade Service for hundreds of thousands of SKUs?
- If 400 distributors were downloading from IDW, why are they just announcing it? Wouldn’t this have been a marketing message for IDEA?
In full disclosure, we have tried to reach out to IDEA over the past couple of weeks to solicit additional input to share balanced observations. They have declined to share information. We also advised them that they could also respond to postings / comments on the blog as they see fit (nothing is censored). Also, all correspondence that we receive from readers is treated confidentially and anonymously (unless you desire otherwise) … so keep those cards and letters coming.
In the end we are confident that all will work out. Manufacturers may supply data to both companies. Both companies will supply data to distributors. Some distributors will be forced, by their manufacturer(s) to use both services; others will decide which company is better for them, today and tomorrow.
It appears that a new day dawned in the data world on July 20th. Let the competition begin.
What will you do?
For more on this topic, check out our other postings, but more importantly, others’ comments:
15 Comments
10 years to get IDEA up and running and the best that can be offered are two emails that invite distributors to “steal” Trade Service data and copyrighted formats? Your numbers in press releases don’t add up.
Some have questioned “what planet the company is on”, others have questioned “who is advising IDEA”?
It is one thing to new on the job, but it is just flat not right for IDEA to invite distributors to STEAL formats and copyrighted product. Ever since the mapper device was brought out, IDEA has acted like they are immune and the anointed data police.
Shame on IDEA for even suggesting that we should help steal data/copyrighted formats, just because you missed the boat on Commodity Codes!
The IDEA business ethics are now exposed…there are none!
I now understand why Vic Jury resigned from the IDEA BOD.
What can you say…hard times show what people/companies really are made of.
JC Midwest distributor
My fellow distributor referenced Rosetta Stone in trying to find out about the IDEA UN number with out any luck.
So I took it upon myself to check Berlitz web site. I didn’t find it there. One of my employees told me it must be a new dance, so I looked at Arthur Murray (the dance guy). I didn’t find anything there.
Wonder why IDEA is driven to change the electrical numbering scheme because:
1.They get to curry favor with GS-1. Maybe they even get a commission of some sort?
2.They help manufacturers get a grip on distributors to further force more work down to the distributor?
3.By re-numbering the distributor system, they will cut off all possible electronic connection with our customers? Trade Service and NetPricer are in the process of connecting us up with customers. Maybe.
4.If IDEA is able to cause enough confusion with re-numbering, they will have succeeded in “adding” fees that they will reap. One of the earlier postings is correct, there IDEA VAN fees are really not that great for a high volume user of EDI. One would suspect that even oneor several of the national chains would have “cut a deal” with IDEA for a lower price than what is exposed to the unwashed masses of distributors.
I am concerned that some ethical line has been crossed by IDEA. It goes something like this:
•IDEA secretly allows distributors to pull out data (probably Trade’s data out of IDW) and it would be a safe bet that IDEA didn’t pay Trade Service for that right.
•They make a big deal about negotiating with Trade Service. Neither party finds common ground
•IDEA misjudges the importance of commodity codes to distributors.
•Agreement between IDEA and Trade Service expires.
•IDEA publishes the copyrighted commodity codes, probably without permission. We looked for that acknowledgement from Trade Service. We didn’t find one.
•IDEA has exposed themselves as just another association that invites distributors to steal. This invitation to steal is very similar to the Square D counterfeit products that some distributors got caught selling.
•It has been suggested by others that Bob Gaylord has been receiving bad advice. I second that.
IDEA apparently has no business ethics.
•Most business people at one time or another try and negotiate contracts with competitors. Some work and some don’t. But for IDEA to turn around a steal from Trade Service and then invite the IDW members to further compound the theft, exposes a total lack of business ethics. Maybe the next grand offering is that IDEA will probably facilitate price fixing on a grand scale.We don’t need the problems you are generating
We are going to pass on this offer.I don’t care what the good ole boy network recommends.
IDEA recommendatios have always skirted the edge of what is right/wrong when it came to TS data. I guess the word from NAED got passed to the new Idea management that it was OK to use the data and formats with out paying.
These types of business practices are the exact reason we got out of NAED and now we fade out of IDEA.
Just a distributor In OR
Noble idea this IDEA. Butttttt
Renumbering our system is not for now.
Our reports are built in the structure that we have used since I came here.
PA distributor
IDEA is in the Beltway in the DC area. That probably explains why they think they can demand that distributors jump through hoops.
10 years of money and a lot of peoples time. What have they been up too. It is a waste of time.
Even with the DAC process, the data was tough for us to use. There were a lot of holes in it.
A distributor in the local area.
Worlwide electrical distributor
Have sent people to standards meetings. The UN number may evolve.
We have a business to run right now. Product coverage is very important to us. Cross-ref is a vital part of our business. We view our business as mostly commodity, regardless of what manufacturers say.
Our system will continue to run TS data, through the IDEA VAN as it has for the last several years.
No dueling for our dollars here.
We are not changing what is NOT broken.
Keep those Excel files coming.
UN numbering system?
So far the UN hasn’t paid any taxes or salaries around here.
It might be a good scheme…some day.
Right now we have a business to run and the least amount of money we can spend on overhead the better off we are.
Whether we want to admit it or not, we are in a business where brands are less valued.
We have embedded in our erp system and all our report Trade Service UPC’s and their Commodity Codes, we see absolutely no reason to change our system.
We’ve looked at their contractor products and they have the same numbering system.
Since our customer is of importance to us because they buy product from us, we will not make the change to the numbering system that IDEA proposes.
Philly Distributor.
Our ERP system carries all the commodity codes and TSC UPC’s. We can handle a UN number in ERP software, but here is the problem for us.
1. Just how many different versions of UN numbers are there? We know of at least 6 different versions.
2. Why?
3. All our reports are built around Comm. Codes.So why spend the extra money for an association.
There is a limit to what we’ll do in the data area. Manufacturers will figure out what we are ordering. NET Prices are what works well for us.
Right now we get 28 different Excel files a month, plus at least a dozen fax.
Our biggest concern is to be able to work with our customers and get paid.
“The big industry initiative”:
About 68-74% of our business is with 3 major vendors. Some years it is a little more or a little less. We cover a 4 state area.
•We use 2 vans plus Idea’s
•One of those vendors is a wire company…we use a fax, telephone, spiral notebooks & free drug (Rx) pens to write our orders. It is a commodity.
•It is our opinion that if the vendors would send the net or discount files Trade Service, we would be miles down the road. Trade needs to be in the van business.
•Nice people at both companies. We think that Idea has gotten some really bad advice about the UN numbers. Within our trade area, there are three different versions of the UN numbers for some of the same parts.
From a practical stand point we will continue to use Trade Service.
We are pretty sure IDEA just doesn’t get the importance of the Trade Service data elements. You guys and gals really missed the boat
Here is a letter we received last week about the removal of data elements.
For us it is a no brainer, we just renewed with Trade Service and in fact we are going to use some additional products.
___________________________________
August 15,2008
As I am sure you are aware, for the past 10 years, Trade Service and IDEA shared data. To
support the launch of IDEA, Trade Service provided the initial load, and since then, provided
informational updates. These weekly updates represented hundreds of manufacturers and
hundreds of thousands of SKUs. When the agreement reached its term on July 20,2008, Trade
Service and IDEA mutually agreed not to renew the agreement and to pursue separate paths.
Pursuant to our license agreement, IDEA will no longer be able to distribute content from Trade
Service effective July 20, 2008. Moreover, distributors who received Trade Service data from
IDEA will be required to remove it now that the license has expired. Realizing the burden this
would have on distributors, we agreed to allow you a 40-day grace period to ensure an orderly
transition and provide enough time for you to make an informed decision to either remove all
Trade Service data from your systems or simply obtain a license to use the data and receive ongoing
updates. Trade Service data includes commodity codes, short descriptions, generic (nonbranded)
product listings, proprietary data and much more.
To ensure a seamless transition, we are reaching out to simply remind you of these changes. In
addition, if you are not in the process of acquiring a license from Trade Service and/or do not
have one by August 31, 2008, you are legally required to remove all Trade Service content,
including Trade Service commodity codes, Trade Service short descriptions, Trade Service
generic (non-branded) product listings and all other Trade Service provided data by August 31,
2008.
To ensure you do not experience any business disruption after August 31, 2008, or if you simply
would like to learn more about our products representing 618 manufacturers (including over 300
manufacturers Trade Service provided directly to IDEA), please call me at 858.521.1502.
Tod Moore
Vice President Sales
We are not going to re-invent the “wheel”. Nor are we going to forced by a manufacturer to IDW.
Our prime market is with contractors. In my humble opinion if a manufacturer wants to with hold information from Trade Service, they can do that. Depending on the manufacturer, it is more that likely they have another competitor that will gladly sell us product.
IDEA is just like NAED…it’s another association that doesn’t know a whole lot about our industry.
NAED has been very happy to add cost to the channel (parties and such) and now manufacturers and IDEA are adding more cost.
And while we are at it, manufacturer’s need to start coughing up SPA money…we are over paying for product up front!
I really don’t care what line IDEA says…there are big holes in their data.
It is sad to see, but IDEA is going to disappear. 10 years and they still haven’t made it work. The data just doesn’t work. This is another example of how Naed screws up things when they get involved. They blew up the potential JV with TSC which would have unfied the data market in the electrical channel.
Thank goodness we stayed with TSC data.
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