NEMRA POS Initiative Gains Traction: 5 distributors (3 chains) + 39 Manufacturers

POS, defined as point of sale, is a decades old issue for the electrical industry.  There are many reasons why customer-specific sales information isn’t shared between distributors and their manufacturers. While the information is withheld in many cases, a consequence is that manufacturer reps, salespeople and manufacturer regional sales management are often not appropriately compensated for sales generated in their territory. The reason … the manufacturer doesn’t have the data to calculate the compensation.

This is the essence of the NEMRA POS Minimum Reporting Standards.  NEMRA, in concert with a taskforce consisting of reps and manufacturers, determined the minimum reporting needs from distributors that manufacturers need to compensate their sales organizations. The result is essentially capturing information on the “place of sale”, or zip code level, with no customer-specific information being shared.

Every rep has, or has had, instances where a manufacturer didn’t compensate them appropriately and typically the manufacturer reason is “we can’t get the information from the distributor.”

Now, five distributors … Graybar, IAC Supply Solutions, Rexel, Scott Electric and Sonepar … have expressly announced that they support the NEMRA POS standards and can report the necessary, nominal, information to their manufacturers to support appropriate compensation calculations.

Additionally, 39 manufacturers / brands have also endorsed the initiative. New endorsers include Eaton Residential Wiring Devices, Lutron, Milbank and TCP.  For a complete list click here.

In speaking with distributors over time, feedback has included:

• We do provide
• I’ve mentioned to my manufacturers
• I want my manufacturers to pay the rep so that the rep supports me
• I’m willing to share some information but not customer level information
• It’s a trust issue
• Why should I provide the manufacturer more information since they are working with Amazon?

And, as you’d expect, reps are frustrated as it costs them money.  In some instances where a distributor does not provide information, NEMRA research has shown that reps will “walk” the business to a locally-owned distributor (if they “control” the business) to ensure they get compensated.  In other instances they are more supportive of other manufacturers on their line card and spend time with those lines … knowing they will get paid for their efforts.

Consider these issues expressed by reps:

• We have a distributor’s branch where we have not been compensated since the store opened up x years ago
• We have distributors choosing to do POS on a quarterly basis that some manufacturers who refuse to accept.
• I receive reports from my distributors so that I can audit my manufacturers to make sure I get appropriately compensated.
• Some distributors giving both commodity codes on some and product specific on others (which is addressed in the NEMRA standards)
• Manufacturers want us to talk to the distributor IT person about the manufacturer’s data format needs! Shouldn’t this be the manufacturer’s responsibility? (and yes, a standard would help!)
• I have a manufacturer who says “he can’t do POS”.  I don’t understand. He provides us with Excel files but can’t accept them?
• I have a salesperson who won’t call on some branches of a national chain as he doesn’t feel he / we are compensated for purchases from that branch, which is serviced by an out-of-state RDC.

And, manufacturer beware, reps are beginning to get more vocal on this and express themselves to distributors as they seek allies.

While there is an EDI standard for POS, it requires capturing customer-specific information.  Additionally, the NEMRA standard captures some information that helps manufacturers determine accurate product and location.  For example, in addition to a branch’s number it asks for city / state as customer location numbers may change; it also asks for UPC and manufacturer part number … not every distributor ERP system has the same number of data fields or is the information always correct … or the manufacturer may change their part number.

The initiative has been spearheaded by NEMRA with support from the NEMRA Manufacturer Group (NMG) to generate the traction and outreach has occurred with other channel organizations.

The NEMRA standard is the “minimum” data needed to provide appropriate compensation. Manufacturers and distributors can jointly agree to add additional information to the right of the first 16 fields … which are provided in Excel, a format that all distributors and manufacturers can provide / accept.

And now comes the time for implementation.

To learn more, go to NEMRA’s website to download the research report and standards or contact Ken Hooper, president of NEMRA, or David Gordon (NEMRA POS facilitator) for a discussion / to arrange a meeting at the upcoming NAED Annual meeting in Chicago.

Endorsement only requires a written commitment and an organizational commitment to execute.  There is no cost to participate.