NEMRA POS Gains Support

A few years ago, NEMRA identified that a major issue for its members was ensuring that they were compensated appropriately. While manufacturers endeavored to pay their reps, and typically did according to their contractual agreements, the reality is that the industry had morphed.  Distributor and end-customer business models had changed … and so many of them had changed so that the impact on the ability to appropriately calculate compensation based upon what was earned within a rep’s territory requires that the manufacturer be provided information from the distributor based upon what is sold within a zip code.

The changes?

Distributor changes include:

• Growth in the use of regional and central distribution centers to improve their operational models
• Growth in the amount of material transferred between branches that span multiple rep territories
• eCommerce which ships products across multiple territories
• Split commissions due to project specifications vs where the project occurs.  This is also similar to issues that arise when contractors purchase from their “preferred” distributor and have the material delivered out of state for projects

and more

A few years ago, NEMRA launched a study to learn more and to identify what it could do to help its members.  What was revealing is that most distributors recognized the issue and believed that reps should be compensated for supporting them. And essentially all were willing to provide baseline data at the zip code level to support their reps.  Baseline data, which turned into the NEMRA POS Minimum Reporting Standards is sales information (what product was sold) at the zip code level (place) and the acquisition cost (purchase price from manufacturer).

The study conducted by NEMRA revealed that there were many formats distributors were using (information in different columns, different names for columns, sending information in different formats – MS Word to Excel to .pdf and EDI).

43

Since then, 43 manufacturers have endorsed the NEMRA POS Minimum Reporting Standards and essentially are saying to distributors “if you send it to us in this format, we will accept it”.

Manufacturers include (bold are new since the NEMRA Annual Meeting):

• ABB, Acuity Brands, American Polywater, Appleton Group, Arlington Industries, CRC, Dialight, Eaton Crouse Hinds, Eaton Bussmann, Eaton B-Line, Eaton (Gear), Eaton Lighting Solutions, Eaton Residential and Wiring Devices, Eclipse Tools, Electri-Flex
• Fluke, General Cable (Prysmian Group), Halex, HellermanTyton, IDEAL Industries, ILSCO, Intermatic, King Electric, Legrand – Pass & Seymour, Legrand – Wiremold, Legrand – Wattstopper, Leviton
• Light Efficient Design (LED), Littelfuse, Lutron, Mersen, Milbank, Minerallac, Morris Products, Northern Cables, NSi Industries, Orbit Industries, Panduit, Rab Lighting, SolaHD, Southwire, TCP and TPI

Some of these manufacturers are proactively requesting data in the NEMRA POS format.

And yes, there are some prominent manufacturers who go to market via reps that are still missing.

And some manufacturers who have direct sales organizations have endorsed as they have the same issue with sales reporting and compensation (bonuses).

There are also a growing number of distributors who are now endorsing the standards, recognizing

• Supporting their reps is good for their business
• Having one reporting format helps them streamline their internal POS reports.
  • In fact, one distributor recently shared that they produce 30 POS reports for manufacturers each month in 20 different formats to accommodate manufacturer requests. Their endorsement of the standard, when cross-referenced against the endorsing manufacturers, enables them to use the same format for more than 20 of their suppliers.
  • Some distributors are using the NEMRA standard as their default format for all of their manufacturers unless they have a commercial agreement to provide additional information.

These distributors, with a number endorsing this year (in bold), include:

• Graybar
• IAC Supply Solutions
• Mayer
• Rexel Holdings USA
• Scott Electric
• Sonepar
• Standard Electric Supply (WI)
• USESI (11 divisions)
• Van Meter

And IMARK Group has endorsed and recommends to its members

Further Streamlining the Process

At this year’s NEMRA Annual Meeting, NEMRA introduced a further enhancement, a process that would enable a distributor to essentially bundle POS reports into one transmission to a centralized hub. The data would then be normalized versus IDEA data (and/or additional manufacturer provided data) and then forwarded to the applicable manufacturer.

Reps will also have access to the information at the zip code level (no customer data) to provide them an audit trail. This information can then be integrated into their sales reporting process.

Think of it as a streamlined POS communication system.  1 upload for distributors.  1 download for manufacturers.

Distributors will either send an Excel file or can FTP the data.

Cost-effective for both and it will improve timeliness.

And the system will be managed by a respected industry provider, Jigsaw Systems, which currently provides a number of services for distributors and manufacturers.

There is no cost for distributors. A nominal monthly cost for manufacturers based upon the number of their distributors uploading information. No set-up fees.

NEMRA is 75% of the way (needs 2 more manufacturers!) towards receiving the number of manufacturer commitments needed to enable the system to go live with a couple of manufacturer decisions pending.

Once this process is underway, the NEMRA POS Taskforce, consisting of reps and manufacturers, is planning to review POS reporting for “undifferentiated, commonly binned items” (i.e. commodities such as wire / cable, some fittings and boxes, pipe)

NEMRA Delivering on POS

POS, from a NEMRA and rep perspective, is all about getting compensated for the efforts that reps do for their manufacturers on behalf of their distributors. As an association NEMRA is seeking to deliver solutions and maintain the visibility of the issue and recommend adoptable solutions to standardize processes. Someone recently identified that the industry has considered POS reporting issues two other times … both at 13-year intervals. Now is the time to standardize some processes.

Click here to learn more about the NEMRA POS initiative. Ken Hooper, president of NEMRA, will be at the NAED National if distributors and manufacturers would like to further discuss.  Channel Marketing Group for more information as we facilitate the NEMRA POS process for the association.