IMARK Goes International

Last week IMARK Group announced that it joined IMELCO, an international organization comprised of similar marketing groups from Europe and Australia. Essentially IMELCO is a buying group for buying group, providing its members (and their members) with additional networking / best practice opportunities, the ability to serve international accounts and, most importantly, the opportunity to seek additional rebates from selected manufacturers.

IMELCO is a 20 year old organization with 12 members who collectively have 250 distributor members and 1741 locations.  Their revenue totals $8.6 billion.  IMARK’s admission to the organization makes IMARK the largest member in terms of distributor members, locations and purchasing influence.

The goal of joining IMELCO was to give IMARK members access to “top hat” override rebate programs that other international distributors (Sonepar and Rexel) have.  It’s presumed that CED, Graybar, and WESCO also have access to these rebate programs which can be a 1/4-1% override rebate to a national program.

IMELCO manufacturers include ABB, Eaton, Schneider, CIMCO, Phoenix Contact, Theben, Grasslin, OSRAM, Legrand, Weidmuller, Philips, Prysmian, 3M, Mennekes, Niedex, Nexans, Hager, GE, OBO Betterman, and Sylvania.  Reportedly they are also talking to Siemens.  While these deals currently don’t extend to IMARK distributors, they are expected to around Jan 1.  Eventhough IMARK does not have programs with many of these companies, presumably the top hat program could extend to IMARK members for those purchases (which creates an interesting database of member sales information.)  Theoretically, it could represent a good opportunity for some of these manufacturers to expand their distribution in the U.S. (as a number of these companies are not strong in the U.S.)

With consolidation being driven by companies with global aspirations, this deal helps IMARK members recapture some of the financial benefits that international companies have leveraged manufacturers for. The reason “leverage” is used as a term is just because a company has a top hat program with a Rexel or Sonepar does not mean that the entity doing business within the U.S. gains special benefits / privileges with these companies (but the division gets to still pay the override to Rexel or Sonepar).

While time will tell if IMARK members collaborate with their European and Australian brethern to serve international customers, or if distribution or marketing group best practices will be shared, it is pretty certain that IMARK members will pick up a few extra dollars in 2013 through these top hat programs if they purchase from the “right” manufacturers.

Nice move by IMARK to financially benefit its members (every distributor can use a little more on the bottom line).

And one can only presume that A-D will, or has, solicit(ed) something extra from manufacturers who do business internationally with Rexel and Sonepar.  Because manufacturers started saying “yes” to Rexel and Sonepar, seems like they’ll be paying everyone now.

Good for IMARK to be the first one.