"With the retirement of Dave Hirsch from Vertex and the withdrawal from daily operations of Wayne Golden from Star, an era of leadership in the stainless fastener business has come to a close-it remains to be seen what the results of these firms will be without the leadership of such outstanding professionals."   -  Mike


This was sent to me as a comment from "Mike" but I thoght it was worth being repeated as a new post.  Thanks Mike.

Seriously...I am starting to wonder.......is anybody working on Friday afternoons this summer?   Voice mail, voice mail, voice mail.

Always trying to add value to this website -- I just booked a room for the Vegas show at Excalibur for $31/night.  And no, I do not have to sleep in the broom closet or with Joan Rivers or anything.  That was the online price.

Hope I just saved you some money.  And, who says this blog site is worthless??

Seems like the past 3 or 4 weeks have been more active.  I have been hearing more and more people tell me that.  Anyone else finding that to be the case?

As I have mentioned in the past, I like to think that on Sundays I can take liberties with this Fastener Blog and do a little free lancing on other subjects.  Usually, I try to drag the conversation back to fasteners or industry or something having to do with something.  However, there are no guarantees.

The subject on my mind today is one I have touched on in the past -- Facebook.   Everyday I am being contacted by someone from the past and for the most part it is pretty enjoyable.  I have caught up with some old friends at least just to get caught up on how our lives have progressed over the years.  Listen, I know all the comments I am going to get about Facebook. 

"I wish I had all that time to spend sitting on the computer talking to people I have not seen in years"  - from the person who feels self important about their daily life

"It is so creepy to think of all these geezers trying to reconnect -- trying to see if the girl who was hot in high school is still good looking or, better yet, divorced"  -  from teenagers who are freaked out that their parents are on Facebook

"I really do not want to have contact with all those people.  I prefer my privacy"  - Ted Kocinski and some others (..I'm just saying)

Blah, blah blah.  I know, I know.  I heard about the person who got hired and posted on Facebook what a big A-Hole their new boss was only to get fired that Monday.  And I do realize there are plenty of creepy people out there.  I get it.  But, here is what intrigues and amazes me....wait, let me provide some background to this discussion first...

On Facebbok, there is a section where they suggest people you might want to add as a Facebook "Friend".  It could be someone who went to your college or your high school but it is generally someone who is "friends" with one of your "friends"  So, this weekend, Facbook tells me I should be friends with MY SON.  I know he has no real interest.  He just graduated from high school and is probably posting a bunch of stuff he doesn't really want good old dad to see.  My daughter is in college and she accepted me as a "friend" recently.  I happen to know that she has privacy features that filter out people like me so I can only see certain things she posts on Facebook.  Which, is all fine by me.  Do I really want to see here college drinking binges or other embarrassing behavior?  Heck no.  This way, I can continue to live in denial and believe my little princess is studying her little heart out and behaving wonderfully at college -- just like I did.  Works for me.

So, now I will get to the whole point of this rambling dialogue.  While I did not request being a friend of my son, I could look at his "Friends List".  Dude had 766 friends.  That is right -- 766 friends.  Amazed by this, I checked my daughters site and she has 586 friends  (obviously, a social loser compared to my son but really, 586 friends doesn't make her a total wallflower).  That is amazing amount of people.  I don't think I even know 766 people.  At least not 766 people that I like!!  Here is what amazes me...if he leaves his account in tact as he gets older, he will never lose track of just about anyone he has ever known.  At age 40 he will still be able to know what has happened to people with whom he went to grade school.  Sure, some people will drop off and he may add others.  But talk about your networking potential.  Can you imagine changing industries in your job and having contact with 766 or so people who might be able to assist you with a name or suggestion about where you might look for a job or a contact or whatever?  That is amazing if you think about it.  Case in point, a buddy of his just got drafted by the Texas Rangers in the recent minor league draft.  Might be interesting to keep in touch to hear how that is going.  A quick message on Facebook seems more realistic than writing letters or telephoning. 

When I was in school I always looked forward to summer vacation.  However, I also knew that I would not see or talk to certain friends until we returned to school in the fall.  My 9th grade son does not miss a beat.  He can be in touch everyday through these communication devices.  All of my children are used to this world.  Many of us "older folks" might dabble in this world and some embrace it aggressively.  But, we were not raised with this being part of our world.  They can keep in touch with friends from nearly cradle to grave if they choose.  Another case in point.  I coached a boy in soccer when he was in about 3rd or 4th grade and then his family moved to another state.  This fall, he will attend college and his roommate is going to be a friend of my son who knew the boy before he moved.  They had stayed in touch and, although they have not spent time together, they decided it would be better to room with someone they knew a little bit rather than a total stranger.  This weekend, my son is supposed to see see the kid who moved out of state as he is coming back for a visit to see hang out a bit with his future roommate.  It is all kind of crazy but interesting all the same.

How does any of this relate to fasteners?  I cannot see that it does at all.  How does it realte to business and industry?  I think it is one of the most interesting and intriguing aspects of how business is and will be conducted in years to come.  I am fascinated.

N.C.F.A. DISTRIBUTOR SOCIAL HAS ATTENDEES WANTING AN ONCOUR
“A Night of Networking” might be the best way to describe the North Coast Fastener
Association’s recent Distributor Social. The event was sponsored by over 30 suppliers
from the fastener industry and all area distributor personnel were invited to attend the
event for free. The total attendance was around 230
people with approximately 2/3 of attendees coming
from local distributors.
“Our organization has always strived to increase
attendance from our local distributors” stated event
Co-Chairman, Marty Nolan. “We thought if we could
sponsor an event that was free to all distributor
personnel we could attract people whose companies
choose not to send employees to some of our
events.”
The NCFA board recognized that there was a unique
opportunity to sponsor this type of event given that
the National Fastener Show East was postponed until
2010. NCFA President, George Hunt explained “We
knew that industry people were anxious to meet with others from the industry given the
challenging economy. Meeting with suppliers and industry peers gives these people the
chance to hear how others see the market right now. I think it was reassuring to a lot of
people to hear that they are not alone during these tough times”.
Each attendee to the Distributor Social was given a folder that included literature from
each supplier sponsor. Additionally, there was a table set up where sponsors could
display additional literature. The Social, however, was not a table top show, but instead
more of a party. Don Shan of Solution Industries said, “This reminded me of the old days
at the Columbus Fastener Show when everyone would gravitate to the 2nd floor of the
Hyatt after the show.” The atmosphere was perfect for networking and for making
business contacts in a relaxed yet professional setting.
The NCFA would like to thank the following Suppliers for their support :
Advance Components All Ohio Threaded Rod Barker Products
Brainard Rivet Co. Brighton Best International Buckeye Fasteners, Inc.
Cable Ties Unlimited Cardinal Fastener & Specialty CSM Fastener Products
Die Co., Inc. Earnest Machine Erieview Metal Treating
Fasteners Unlimited HTI Kerr Lakeside Inc.
Lindstrom Fastener Group Master Bolt & Mfg., Inc. National Threaded Fast.
Nucor Fastener Point One International, Ltd. Porteous Fastener Co.
R.L. English Co. R.L. Morrissey & Associates S.A.W. Inc.
Screws Industries Solon Manufacturing Co. Star Stainless Screw Co
Stelfast, Inc. Stork Herron Testing Labs Tensile Testing
Unger Sales Vertex Distribution XL Screw Corp.
Kevin Quinn (HTI) & Kelly Hommel
(XL Screw Corp.)
The NCFA has received multiple requests from
Suppliers and Distributors to hold another
event such as this in the future.
The NCFA still has some great upcoming events
like our annual Screw Open Golf Outing on
Friday, July 24th at Coppertop at Cherokee Hills
in Valley OH. If you would like additional information
on this event, or any of our upcoming
events, please contact the NCFA Office at
440/975-9503 or visit our website at
www.ncfaonline.com.

Man, there is a lot to talk about.  This may get a little long so I will jump right in.

The best thing about the Fastener Tech Show??  "A Taste of Rosemont" that was held the night before the show.  I have rarely been in a room with so many great restaurants serving samples of such outstanding food.  I stuffed myself like a pig.  If you missed it....your bad.  That being said, the show was good too.

But seriously, the show was very good.   Anyone who has read this blog before knows I am a huge fan of the trade shows.  At every show I can find people to complain about lack of attendance or the proliferation of Asian vendors or something.  It never fails.  But I thought this was a very good regional show.  And, at this point, it is basically a regional show.  The Las Vegas Fastener Show seems to be the only one that can truthfully call itself a National Fastener Show.  That being said, I thought the event was well attended and there were visitors there from many different states.  I only attended the first day but I thought the traffic was constant and people had plenty of time to spend quality time with the show visitors.  There were two other trade shows in the Rosemont Convention Center and I saw name badges from people that came to the fastener show from the other shows.  Some cross breeding!  I did not attend any of the educational or training seminars but I invite Nancy Rich of the MWFA to check in and tell us how those went.

Consistant with what I have been writing, most people say their business is down from 25% to 50% this year.  Government (including military), power generation and medical devices seem to be the areas where there is still some decent business.  I had many conversations with people who seem to think that distributor stock levels are really, really low and we all kind of wonder what will happen if several market sectors all pick up at the same time.  We could be looking at some long lead times for certain products -- but again, we would need to see markets pick up.  And, by all accounts, they have NOT done that in April and May.  Lots of bad Aprils and Mays for a lot of people.  There seems to have been increased activity in the last few weeks and lets all hope that continues.

Next - I just was copied on a news article that said that China Steel plans to hike up steel prices for the third quarter of 2009 by an average of 7%.  This would come after prices had been cut by 22% in the first quarter of 2009.  I do not know how or why they will be raising their prices, but I know it will be very interesting if they do.  It would suggest to me that they expect increased demand in the coming months after many months of decreased demand.  I'm no economist but I am sure this will cause many to wonder about possible upcoming inflation.  Lots to sort out there and lots to keep track of during the upcoming months.

Finally, while in Chicago for the show I had an opportunity to catch up with an old friend who now lives in the area.  My friend Helen is a professional journalist and is currently the Managing Editor of a group of local publications including the Wednesday Journal, Chicago Journal, Forest Park Review, Riverside-Brookfield Landmark, Austin Weekly News and Skyline.  Keeps her very busy.  Helen was the editor of our high school newspaper back...like 5 years ago..or 10 years ago...or 30...never mind.  She was the editor back a time.  So, I was very happy to share with her Fastener Talk.  I wanted to show her I had not totally squandered all my journalistic studies from my high school days.  She got online, looked it over and concluded it was a ragtag contribution to an un-interesting industry.  No she didn't really.  I think it amused her that after all these years we were still both using some skill set we developed in our youth.  And, although I did not manage to catch a Cubs or Sox game when I was in town for the Fastener Tech Show, I guess catching up with an old friend rates up there pretty high as a good thing to come out of the show.

As I always say....the trade shows are pretty much what you make of them.

I will be attending the Fastener Tech Show next week in Chicago.  It is hard to anticipate if this show will be busy or slow.  I am looking forward to it, all the same.  It is always good to get the pulse of certain people to see if they see any imporovement in the marketplace.

Today I stopped in a company that sells to dsitributors and they said their phones have really been busier for the last two weeks.  This company supplies a lot of special parts so I think that is a good sign.  I want to hear what others have to say in Chicago.

Any readers out there planning to attend the show??  What is your take on the show?  Busy, not busy??

As far as I can see, we might be near the economic lows.  Problem is...we seem to be staying right about there.  Back in March I kind of felt like there was more quoting activity and I think I was almost optimistic that we were getting into period of greater economic activity.  I would not say that things keep going lower...but they do not seem to be going any better yet either.  It really seems stagnant out in the fastener world.

June and July are historically pretty slow.  That should make the next few months that much more interesting.  It seems that government and military business is going pretty well as is business connected to the energy industry.  Medical equipment is OK.  Automotive and truck related business??  Nothing.  Flat as a pancake.  The only positive news is if your local plant is not closing.  Even then, many plants are on temporary shutdown.  So, we keep the doors of our businesses open, we scratch and claw and fight to make sure we are still standing when a recovery finally comes.  Cannot imagine we will see anything much until the fall.

OK, I'm not going to lie.  I'm pretty amused.  A couple months ago I was approached by ThomasNet and asked a few questions about the fastener industry.  I'm not saying that this site is some great contribution to the Fastener Industry but it is the first fastener related blog, to my knowledge.  And, I am sure there are plenty of people that might be more qualified to answer these questions but....they asked and I answered and now you can read the interview by clicking on the site below.

http://www.thomasnet.com/articles/hardware/fastener-blog-interview

I really would like to thank ThomasNet for recognizing Fastener Talk and giving the site some publicity.  I often praise the thomasnet.com site so I am grateful for the acknowledgement.

I was lucky enough to attend the North Coast Fastener Association's Distributor Social and am happy to report that it was a great success.  There were approximately 200 people in attendance - a mix of distributor employees an employees of many of the suppliers who sponsored the event.  Beer and appetizers were complimentary to any distributor employee who attended and by all accounts everyone had a good time.

One of the comments that was frequently repeated was that it was good to get together with others from the industry just to hear that other companies were going through similar challenges during these economic times.  There was a strong sentiment expressed by many attendees that they would like to see this type of gathering repeated.

The NCFA Social was not a trade show or a table-top show.  The gathering was held in a big, open room with an attached outdoor patio area.  Attendees mingled freely networking with everyone else in the room.  There was plenty of space for people to have some privacy if they needed it. 

A great job by NCFA President George Hunt and the board of the NCFA.

I always like to search the web to see what is new in the fastener cyber-world.  And, there always is something new.

ThomasNet.com has always been invaluable to search out fastener companies and they have recently started publishing more news and links to the fastener industry.  Click on the following site to check it out.

http://www.thomasnet.com/articles/hardware/fastener-conventions

I also noticed there is a new site specifically designed to assist those people looking for jobs in the fastener industry.  You might want to check out:
 
www.fastenerjobs.com

I would like a little feedback from the field on any other sites that you readers find interesting or helpful.  In the past, I have mentioned the sites from Kanbridge and Brighton as one that I hear good things about from distributors.   In just the past few weeks both the American Fastener Journal and FIN have mentioned Richard Manno'Co.'s new site.  You can now get real time inventory from their site at www.richardmanno.com. 

Please feel free to send back to me other sites that you find useful and please tell me why you think the site is unique or worthy of note.   It is not that I am against anyone self-promoting on this site but, just because the site is YOUR site does not necessarily make it interesting or unique.

Fire away.

I just read the last comment from Andy and it brought to mind something I have been thinking a lot about lately.  I think that today might be one of the very best times to start a new fastener business.  Go out, get yourself a van and start peddling.  I know what you are thinking -- business really blows and the economy is a mess, so why start now?  Let me tell you why...

Right now, the company that carries no inventory has a distinct advantage over the ones that do carry inventory.  If I started today, I could go online, shop till I drop, buy materials at really, really low prices, get a 5% discount for buying online and there would be a very good chance that I would have lower prices than any distributor that has been holding on to inventory to service their exisiting customers.  That is right...the customer that you have been painstakingly taking care of for years would probably still throw you out when you try to explain that you have been carrying inventory to keep them afloat.  And yes, it would be a complete and total shame...but my prices would be so much lower that they'd still be tempted to buy from me.

And you'd go back to your suppliers and wonder why they are letting me buy at such great prices.  After all the business you've given them and all the years you have been supportive....how can they do this to you now???  Gotta move inventory.  And once one company sets the price level...well, the competition has to respond. 

In truth, this was a story that was told to me today by a medium sized distributor.  The inventory on his shelf is like a weight around his neck.  He'd be better off with empty shelves.  And, the pity is that he felt like he had been keeping his customer's prices steady and he thought they would be appreciative. 

 

 

I think people are very interested in hearing what other people have to say about the economic climate, especially how it pertains to the fastener industry.  There seems to be an increased interest in the fastener shows lately.  On LinkedIn, there is now a group you can join that is specifically for getting information on the National Industrial Fastener Shows.  Susan Hurley, on behalf of the shows, has even announced that you can get continuous updated information on Twitter.  When recently speaking with Lisa Graham of the North Coast Fastener Assocaiation, she indicated that the response from suppliers who are attending the show is much greater than originally expected.  And distributor response has also been very strong with a large number of distributors bringing several purchasing, quoting and sourcing personnel.  This NCFA Distributor Social is taking place on Tuesday, May 19.

And recenlty, I have been getting several calls asking me if I will be attending the Midwest Fastener Show in June.  Suppliers are looking for opportunites to get in front of their customers and distributors are curious to hear how their peers are doing.  I would be curious to hear from anyone associated with the Midwest Fastener Show as how many people have pre-registered for the show and how that compares to last year.

I think people are starved for news.  No one wants to hear bad news - other than the occasional comment from someone hoping they lose a competitor or two.  But it does stress people out to hear when a factory closes or a long standing distributor shuts its doors.  It kind of spooks people.  But to some degree, hearing nothing is also spooky.  I continually get asked, "so, what are you hearing out there"?

What I am hearing is that distributor sales seem to be off from about 25% to 40% on average.  And companies that are doing better than that are generally those that have stolen some business or a saleperson away from another company.  I think companies are more aggressively trying to market their products and many companies are looking for ways to increase internal communications so that they do not miss business opportunities.

I would like to hear feedback on any of the other upcoming regional shows from other fastener associations.  Please chime in if there are other shows coming up.

A lot of people I talk to tell me "We're not going to make any money this year but we're surviving".    Now, things could turn upwards in the 2nd half of the year to change that.   Or, automotive business could plummet even more and further drag things down.  But survival is the name of the game right now.  And, as I have said for months, the companies who are doing a little bit better than average seem to be the ones hiring away salespeople from the competition or else they are wrestling away business from the competition.  Be diligent.

A few months back, when the Dow was down down significantly, one investment newsletter I get encouraged the readers to invest.  The newsletter thought the stock market had bottomed.  If I had invested at that moment  would have made a bunch of money as the stock market has increased over the last few months.  Yeah, I know.  And if my parents had invested in Coca Cola when I was born ... and if my Auntie had certain physical characteristics she'd be my Uncle, etc., etc., etc.

So, what about fasteners?  We know this economy isn't going to last forever.  And, if business picks up across several different sectors at the same time, where will the parts come from?  Everyone is reducing inventory.  Will we run out of product?  I have heard that some of the large, nationally known catalog houses have reduced their safety stock from six months to three months.  So, if their business picks up they would not only need to buy for current business needs but also for the rebuilding ot their safety stock.  Multiply that out by the number of end users and distributors and suppliers who all have depleted their inventory and things could get very interesting.   Wouldn't you just love to go out and buy containers of really inexpensive hex nuts or cap screws right now while they can be purchased inexpensively and just wait to sell them when the economy turns?  I don't know.  Might be a little risky.  But I do wish I'd had the money to buy up some more stocks a few months ago.  And the nerve to do it.

President Obama is spending part of his day in Iowa visiting Trinity Structural Towers, a company that builds towers that support wind turbines.  We can all recall the President's visit to Cardinal Fastener earlier in the year.  That was a visit that we, as fastener people, could relate to.  Just last week I finished reading the book "Hot, Flat and Crowded" written by Thomas Friedman who also wrote "The World is Flat".  It was a really good book and very interesting.  In a nutshell, Friedman explains that heavily populated, rapidly growing countries like China and India want to enjoy many of the modern conveniences and developments already enjoyed in the United States and Europe.  He also points out that it China and India try to accomplish this using "dirty" fossil fuels, the outlook will be very, very grim.  Very, very, very grim.  The amount of energy that would need to be generated for something as simple as air conditioning, when multiplied by the number of people in those countries, is astounding.  Friedman concludes that these countries need to take a different route to accomplish these develoments because using coal and oil will not work.  Too many people and it's too dirty.

Friedman makes another very interesting point.  Most of the states that are "swing states' in any election have a great stake in the coal industry.  So, if you want to get elected, you'd better not talk bad about coal.  You'd better talk about "clean coal".

The part of the book that I found really interesting was when he discussed the huge economic opportunities that exist for the companies that get involved in new energy development.  Can you imagine how much alternative energy we would need to produce if , in fact, we really did find out that we were on a 50 year collision course with destiny.  If we did find out that we were rapidly destroying the polar caps and we were causing our earth to be uninhabitable --if that were the case-- think of how much energy we would need -- and we'd need it quick.  Don't even try to get me in a discussion as to whether or not global warming is real or any of those discussions.  I watch the same Nature Channel specials and hear the same arguments you do - from both sides.  But, you cannot deny this -- as China and India develop and more and more people use more and more electricty - there are going to be issues.

China is already trying to develop new energy sources.  It talks a lot about it in the book.  Friedman thinks that the United States needs to take a leadership role in new energy development - not because he is some tree hugger but, more importantly because the economic payoff for being the leader will be huge.  HUGE.  And, that is where fasteners fit in.

A couple weeks ago I questioned which industries use the most fasteners.   Is it still automotive?  One day, altenative energy development might be a huge fastener market.  Much bigger than what we see today. 

Read the book if this subject interests you at all.  It is very good.  Interesing, but this year I also read books by Ted Turner and by T. Boone Pickens.  Both of these guys were pretty good businessmen and both have a wealth of knowledge and expereience.  These books were both recently written and each one included many chapters on our need for alternate energy development.  Knowing these guys, I'd bet they are going to make some money on alternative energy development - and more power to them if they do.  It's not just an Earth Day discussion anymore and it is not just some "Green" discussion.  It is economics.  And where there is economics, there are fasteners.

I know many distributors are reducing their "safety stock" in an effort to reduce inventory and their purchases.  And many distributors and suppliers tell me that they are seeing orders from customers -- it's just that they are much smaller orders.   Suppliers (in particular, importers) are trying to move inventory so they can bring in some lower cost invetory.  Makes sense.  But, then just yesterday I was speaking with a domestic manufacturer who told me that he thinks scrap prices might have bottomed and maybe steel costs will start to turn again (although he did say he did not expect anything like the craziness we saw last year).

So, how much has the price of different types of fasteners changed from quarter to quarter -- from year to year?  Certainly, Socket Head Cap Screws, Flatwashers, Grade 5 Hex Heads don't all chage at thesame rate at the same time -- and not the sames as would a nylon washer or a U-Nut.  So, what factors do we take into account when we hear that our costs are going up?  Do we have any kind of Fastener Price Index??  And, what information would you use if you were creating a Fastener Price Index??

Last year the price increases were fast and furious.  This year, end user customers are writing "love letters" to the distributors telling them "we demand a 10% decrease because we just read in some report that steel prices have gone down".  Needless to say, several distributors attempted to cross out the names and re-send those same letters to suppliers.  Wouldn't it be valuable to have some kind of Fastener Price Index to use to help fight price increases and decreases or to at least have a basis upon which to determine what the market is actually doing.

I know several distributors look at raw material prices and metal prices to guage some of this.  But what should go into this kind of index?  I would think that this is something that might be tackled by an industry group like the NFDA or IFI.  Usually, when I read anything in the trade magazines it is a spokesperson for one of the importers who is sharing this kind of information.  Maybe the importers would be the place to start to gather this information.

Each year, in the magazine "Industrial Distribution", they list the BIG 50 - which is a list of the largest industrial distributors.  In 2008 the top 5 were:

1.  Wolseley
2.  HD Supply
3.  Wurth Group of North America
4.  W.W. Grainger
5.  Airgas

Some of the other fastener distributors in the top 50 included Fastenal (#9), Barnes (#17), Lawson (#19) ,Bossard (#21), Kimball Midwest (#46) and State Industrial Products (#47).  There are several other companies listed that do a good amount of fastener business.  Also, some of the companies just mentioned are on the list for a lot of reasons other than their fastener sales.  There is another list of the "Top 10 Electrical Distributors" and Anixter appears on that list.

Who would be in the BIG 50 of Fastener Distributors?  Does a list like that exist?  Certainly, Wurth and Fastenal would make that list.  Anixter has really grown through acquisition and they'd have to be on that list.  Supply Technologies would be on the list I would imagine.  Who else would be on that list?

Another interesting component of this list comes from another question -- Who Are The Biggest Fastener Users?  Historically, the automotive industry has been thought to be the largest consumer of fasteners.  And, historically, I think the automotive industry has bought directly from manufacturers of fasteners.  Or, maybe from a combination of manufacturers and distributors.  The truck market has always been served by distributors.  And, the Japanese auto manufactureres have been served by companies set up in the U.S. solely for the purpose of supplying the Japanese auto manufacturers.

So, does a distributor supplying parts to Honda or Toyota even show up on our radar screen??  Do we consider them in the same catagory of "Fastener Distributor" as we do the Wurths and Fastenals an Bossards??

I'd like to hear from anyone who has this kind of data or knows where I might be able to find it in a report or on the internet.

Dear Traveling Salesman,

I received quite a bit of feedback from your readers...most of it related to my name, not our work.  Well, for those of you who got a chuckle out of that, my proper name is John and that's what my family calls me.

In any event, I'm curious if you're seeing the following procurement trend;  while our clients usually ask us to identify and qualify vendors for specialized fasteners, machined parts, castings, etc., of late we are fielding more requests for low to mid quantities of "no name" parts.

Specifically, some of our clients want fast turnaround on parts that have limited specifications, certifications and no brand identifications.  Often the quantities are below what manufacturers are willing to supply directly, so our buyers source what is needed in the vast open air hardware markets found in every city in Greater China.  Recently we procured 250 six piece needle file kits for a client in Toronto.  All that he wanted was files, and we delivered them via UPS in three days.

Perhaps this trend is related to a lack of inventory on the shelves or end users that don't place value on knowing the origin of the parts they use.  I'd like to hear what you are seeing on this front.

Cheers,

Jack Daniels
1-617-401-7373
www.Buyers-Bridge.com

Call # 1 - "How's your business?"  "Down about 40%

Call #2  - "How is your business these days?"  "Ugly.  Real ugly.  Down at least 30%"

Call #3  -  "How's business?"   "At the end of February we were up 5% over last year.  After March we re down 25% from last year.  March was terrible".

Call #4 - "How is your business?"  "I need to add people. We have picked up some huge pieces of business.  We could be up 50% or more over last year".            ---Follow up question ---  "Is this new business you took from another company or business you developed with existing customers?"   "A little bit of both.  We are picking up some things other than fasteners with our exisiting customers and landing some new fastener business."

Call #5 -  "How is your business?"  "I have never seen it quite like this in my 30 years in the industry.  Last year I wrote off $6,000 as uncollectable.  Already, this year I am looking at $28,000.  But we are surviving.  We'll still make some money this year because we are small.  My salesman are getting out there every day beating on doors looking for anything to sell."

Still on the slow side out in the marketplace but there seems to be more quoting and a bit more activity.  Some people hoping the weather helps.  Stock market crawling up. 

For anyone logging on to this site for the first time, WELCOME!  I want to sincerely thank Mike McGuire and the American Fastener Journal team for including an article on this blog site in their most recent publication.  MIke has supported this site since the beginning and publishing that article was a generous gesture.  I think Mike and I agree that the promotion of communication within our industry is a good thing -- a necessary thing -  and I think that is why he has always been supportive of this site.  Mike has been a pioneer with the fastener shows and many of his publications and I am thankful for his support.

Like I was saying, if this is your fist time here, welcome.  I hope you will subscribe so that you will be updated each time I post a story or when someone comments on something posted.  I have had many postive comments from people, many of them sent privately.  Down the road I would like to have "guest bloggers" on this site.  If there is a subject you would like to discuss or an opinion you would like to express, please send me your "article" or thoughts  as a comment and I can post it as a new subject, not as just a comment to existing post. 

As a "Traveling Salesman" it seems like I post a lot about subjects dealing with sales, marketing, networking, etc.  I think sometimes I negelct to view things through the eyes of a manufacturer or from an operations point of view and I welcome comments from that perspective.  My vision for this site is that, someday, I will regulary see contributors discussing fastener industry issues from all parts of the world.  For instance -- not long ago some Grade 5 bolts were found that did not meet industry standards.  Several people commented on this situation but I hope that some day I will have people from China or Thailand or wherever these bolts came from commenting on the situation from their side of the world.  If enough people find this site and decide to participate in the fastener industry dialogue, this could get very interesing.  And, it is not so much that I want this particular site to become famous.  I think in this day and age it is stunning that we already do not have a site where fastener industry people can come to discuss industry information in "real time" -- as it is happening.  So, that is what I envision for this site - we'll see if it happens.

As I said, I often seem to look at the sales end of our industry.  In the last month I have heard more and more people who say that they are starting to see more activity.  More quotes for sure.  Some are seeing a slight increase in sales.  This is all good news.  I know that a lot of companies are anxious to move some of their older, higher priced inventory.  In th lastest American Fastener Journal there are several articles about internet sites where you can try to sell your excess inventory.  Good timing for those articles.  There is plenty of inventory to get rid of.

So, let me ask this.  What makes a good sales manager??  What is your sales manager doing during these economically challenging times?  If you are a sales manager, what are you trying to do to stimulate business at your company?  Do you drop prices, make more sales calls, add more salespeople, do more training, reduce minimum orders?  What is working?  If you are a salesperson, what is working for you and what is not?

Dear Traveling Salesman,

Our VP of sales came across your blog and passed along the link to me.  What you wrote about connected with both of us immediately as one of our major verticals is the MRO segment.  We serve many of the large catalog houses as well as specialist fastener distributors in North America and Europe.

Our business provides contract management services on the ground in the Asia-Pacific region.  We research and qualify vendors, obtain samples, audit manufacturing and quality systyems, negotiate pricing and terms and manage logistics.

In you posts, you have asked for feedback on domestic and international markets.  I share my thoughts about trends in procurement and source development through our monthly newsletter called "From the Frontlines".  It is pasted in below.  You and your readers might find it interesting.

Cheers,

Jack

---------------------------------------
Dear Reader,

Here is our sixth edition of From the Frontlines (Trademarked).  This month I'm focusing on some of the changes we're seeing in the Chinese manufacturing sector.  As I'm sure you've heard, in January and February of this year, exports from Chian were down 28%.  Imports were down an astounding 43% during the same period.  Factories are going out of business left and right, especially in southeast China.

The central governement in China has initiated an economic stimulus package valued at $585 billion US dollars to prop up the manufacturing sector.

While you might think that the weakest companies will benefit from this move, that's not the case.  The government is quite happy to see low end manufacturers going bankrupt.  These companies specialized in poorly made products for the export market.  Their niche was being the cheapest and they survived by paying their employees for forty hour weeks when they worked sixty, substituting inferior raw materials, poisoning the environment and cheating on their taxes.

Stimulus funding is being dedicated to companies that manufacture good products for higher end markets.  They are making investments in training, quality systems, human resources and environmental protection.  Companies that are building solid businesses.

This is good news for buyers and procurement professionals.  Purchasing reliable products from reliable people at a fair price will help all of us establish sustainable supply chains.  The companies that we identify and manage provide high quality products that are competitively prices,  Please let us know if you'd like our assistance in procuring from this class of company.

Pricing Trends in Mainland China
Vendors around the world are hungry right now.  That's not news.  What is, is that costs are dramatically down on several fronts.  Raw materials pricing has dropped dramatically, freight charges are down approximately 35%, the provincial and regional governements are rebating most of the 17% value added tax (VAT) and many companies have cut salaries 15% or more.

If you have established supply relationships, it's time to renegotiate.  If you're crafting a new vendor relationship it's time to push hard.

Best regards,

Jack Daniels
jdaniels@buyers-bridge.com
www.Buyers-Bridge.com

Hey!!  The stock market went up 497 points today!  YES!!!  Now I have only lost 45% of my retirement money.  But, I'll take it.  I will take any glimmers of hope.  I am seeking any sliver of light at the end of the tunnel.  It is all good by me.  And, let's face it, the stock market was up a bit over the last two weeks.  That is a sign of hope, right?  Well, it is better than nothing.

As I call on my distributor customers I have seen some other signs of hope.  I sense that there is a little bit more activity in the marketplace than in the last few months.  Some customers have told me they expect that their customers will be calling back some employees in April.  Other companies have expressed the optimistic view that their construction business will pick up as the weather improves.  I certainly have seen a lot of bridge and highway jobs underway and that has to be good for somebody.

I was visiting an old friend today who works for a fastener vendor that sells to distributors.  He asked me, "Do you think a lot of little distributors are going to go out of business due to the economy?"   My gut feeling is "NO", there will not be a lot of small distributors that go out of business.  Smaller distributors seem to be able to cut back and are often more resilient that large distributors during these times.  They can cut overhead more quickly and they can tighten their belts.  I have always called on small and medium sized distributors.  When the big guys scale their purchases way back and ask for price concessions or refuse to take deliveries, the little guy just keeps buying what they need.  They need to so they don't close their doors.  They generally do not have the inventory exposure.  I could be wrong and maybe a lot of them will go under but I would bet against it.  This is also one of the reasons I cringe whenever a supplier wants to stop selling to smaller customers when business is strong.  In times like these, any sale can be a good sale.

I can certainly understand why the Columbus Fastener Show was cancelled this year.  I'm sure a lot of companies would have elected to skip it this year to save money.  Still, it would have been interesting to hear the discussions among the suppliers and distributors that would attend.  I guess I'll have to make plans to attend the Mid-West Fastener Show.  (By the way, if you are new to this blog, I am a huge fan of all the fastener shows and networking opportunities).  In an earlier blog I printed a note from the North Coast Fastener Association president announcing their "Distributor Social" on May 12.  As it was described, this will be a one evening event where distributors and vendors from Ohio and the surrounding states will be able to network.  I guess you might call it the NCFA's version of the post-Columbus show gathering on the second floor of the Hyatt, minus the daytime show.  It will take place at the Cleveland Airport Sheraton Inn. 

Like I said, I am a trade show junkie and an eternal optimist.  So, I hope the rumbling of things getting a little bit better are true.  Some areas will see it before others.  I was glad to see General Motors refuse additional stimulus money in February.  I was happy today that home sales were up.  I was happy last month that retail sales were better than expected.  As long as we see some progress I think we will be able to muddle along until we finally pull ourselves out of this mess.

Recently, on LinkedIn, I joined a few groups.  There is a group for the Fastener Industry.  There is also a STAFDA group.  Through the STAFDA group I saw an article posted with the title "Sales Managers May Cry But I Like A Recession".  I have tried to attach a link to the article below for anyone intersted in checking out an article with such an intriguing title.

http://www.customerthink.com/article/sales_managers_may_cry_but_i_like_a_recession

In a nutshell, the article talks about how we need to move a way from the same old way of doing things during economic times like a recession.  When things are not working and sales are not flowing, sometimes it is time to shake things up.  Now, this can mean a whole lot of things to a whole lot of different people.  I believe it was Einstein who was credited with the quote "The definition of insanity is doing the same thing over and over and expecting a different result".   When the economy is strong it seems like a whole lot of different tactics work for bringing in sales.  During a recession, some don't work as well.

In other posts I have commented on companies that have "stolen" business from other companies.  A nicer way to say this might have been to say they were awarded business they did not previously have.  But, how do you develop the new business?  How do you prospect? 

Sometimes it is as simple as out-hustling your competition.  Maybe you are making more sales calls than the next guy or lady.  Sometimes it is through training or doing seminars.  It can be technical presentations or maybe informational meetings about your product lines.  Technology offers unlimited possibilities.  There are many distributors that have set up web stores on E-bay or Thomas Register.  Many companies have sites that allow you to order right from their site.  Many salespeople use the internet for prospecting whether on Yellow Pages sites or, again, Thomas Register or some other directory.  There are many good sources for construction suppliers to search for construction projects.  Heck, some guys even go out and start their own blogs!  (but I wouldn't suggest that route).  One thing that I strongly believe to be important in a weak economy is increased communication between vendors and their sales force and also between the salesperson and their customers.  You have to stay close to the customer in difficult times.

Some companies add salespeople in difficult times.  Some companies fire salespeople and reps during difficult times.  There is an article in the most recent MANA publication that is titled "A Down Economy Can Be A Good Time For Reps" as some companies prefer to outsource their sales force and reduce their staffing.  Depends on the company. 

The good news is that the stock market has been up several days over the last week.  There is no doubt that the mood of the nation improves when the stock market goes up.  There is a little more optimism.  And there is more talk from our financial leaders suggesting that we could pull out of this recession by the end of the year.  This kind of talk also helps consumer confidence.  I know many distributors I call on have at least seen SOME positive days in the last month.  It is not all gloom and doom out there.  There have been a lot of layoffs for sure.  I suspect many of these were not just because of the business climate from the last few months.  I suspect some of these layoffs were attributed to the current recession but, in fact, it was a case of  "trimming fat" that should have been done long ago.  Hopefully things will improve and some people will be rehired or find new jobs with other companies.  But as I stated earlier in this note, you cannot sit around and do what you have been doing if it not producing the results you want.  You've got to shake the tree.

Hey, where are all my international fastener friends.  Daniel, what is happening in France?  Where is my friend in New Zealand?  Also, I had some folks check in from India and even one person who started his own blog there.  How about a little news on what you are seeing in your corner of the world.  China...where are you?

I think you can get a pretty good idea of what is going on here in the States just by checking on this blog.  Or you can watch CNN and other news stations and then want to go jump off a cliff or go live in a cave.  Not that the news in inaccurate...it is just that the news people have a way of beating a story into the ground to the point where you hope you never hear a report on the subject again.  Case in point....the mom with 14 kids.  Or the lady who got mauled by a chimp (though that is a really sad, terrible story).  The news folk have a way of bringing up the same bad news over and over and over.  I have reverted back to listening to 24 hour sports talk.  And really, I have my fantasy baseball draft coming up so the timing is really good.  But, back to fasteners.

I would like to hear more about the fastener industry in other countries.  I imagine things are tough all over although I did hear about a stimulus plan in China that has breathed a bit of new life into that economy.   China expects something like 8% economic growth this year.  That is amazing.

Another reason I am out begging for news is that I think we fastener people see trends coming before the rest of the working people see these trends.  We can tell when people are starting to buy again because usually they buy fasteners in anticipation of coming work.  We also see things slowing down before the general public.  I actually had a company tell me that they really and truly think they have seen a slight rise in their business since the stimulus money was announced.  I swear, I am not making this up and the type of products sold at this compnay would cause me to believe them. 

One last thing.  In a recent post I asked about the "untold story" regarding what is actually going on in the industry.  I received several personal e-mails from people who know me by a name other than Traveling Salesman.  The note was like this...."company A cut 30 employees, company B has eliminated 15 people..."   They did not write this information on this blog so I have not posted it.  Still, there is no place where this type of information is out there in the public where it can be discussed.  I really hesistate to post that kind of information because I have never had dreams of this site being a gossip column.  Still, it is a little odd to me that this kind of information has not shown up in trade publication.  I guess it is just senesitive information and who really wants to dwell on the negative anyways?

Again, I visited an account yesterday that told me their business was down but the general manager quickly added, "But we are not down as much as a lot of people around here".  In this particular area, most people have been telling me they are down about 40% from last year.  So, I asked, "Why is it you are doing better than others?"    The reply --- "We are taking business away from other people.  You've got to in this business climate".

Today, in another city two hours away from the first customer,  I stumbled upon another customer that is writing new business.  "We are really busy" said the inside sales contact.  "Sure, some of our accounts are down but we have one salesman that picked up some new accounts and they are really just starting to take off.  We are slammed!"

Don't hate your salespeople folks.  If they are out there beating on doors and looking under rocks, I think that is your best bet in this economy.  Do not consider them an expense (though I guarantee you...that is happening a lot!)  I wrote a note very similar to this about a month ago and the message was very similar.  If you want to grow or at least stay somewhat steady, steal business. 

I swear to you I am still mystified by how some companies can analyze the hell out of a situation to where they are almost paralyzed.  I also cannot believe when I hear of companies that do not return quotes promptly because of insufficient (or bad) inside sales help.  The majority of distributors I call on need answers quick.  Real quick.  And if they get their answers quick, they buy.  They get it off their desk and get the materials ordered.  If your competition responds in 2 hours, then you do not have 8 hours to respond.  The order is placed already.  It is gone. 

Finally, if you are an owner or a sales manager, you really need to ask the question "What do we need to do to write this business?"  I know that sounds ridiculous and simple but I know many frustrated sales people who keep telling their bosses what is happening in "the real world" only to have them say they do not believe it.  Case in point.  Everyone brought in overpriced stock last year to keep the customers happy.  Then the faucet turned off and everyone is sitting on a lot of inventory.  And now, the $1.00 inventory on your shelf is worth about $.65 -- at least for the moment.  If you need cash to flow then you are not going to get your normal mark up.  You will in some cases, of course, but in a lot of instances your not going to get it.  Not now. And not if you want to turn the inventory and get in new, lower priced inventory.  I just read a note online about how Taiwan is slow and they are lowering prices more to move inventory.   The feedback you are getting from your sales force or your reps --- a lot of it is true.  Don't say "I cannot believe that" unless you plan to pick up the phone and check out the situation yourself.

The customers I find who are doing OK or are even a little bit up are an inspiration.  It tells me to get back on the road tomorrow and keep knocking on doors and dragging in inquiries.  Eventually, I will hit on some of these.

Like a grocery store tabloid, I wish their was a fastener industry site that told "The Untold Story".  I'm not talking about all the stories about Brad and Jen and Angelina.  I'm not talking about made up gossip.  I would like to go to a place that actually tells the kind of information I hear as I go out and make sales calls.

A few weeks ago I heard of one national company laying off 5o employees.  Then last week I hear about another company laying off 30 employees.  Just today I was visiting a sourcing manager at his new company when he told me another one of his ex-collegues had just left their old company and moved to a distributor down the road.  None of this is rumor or gossip.  It is factual stuff.  I wish there was a place I could log in to see who is gone from what company and who has gone where.

And, it is not just personnel moves that interest me.  I think we will see companies add to thier product offerings as they try to increase sales during these difficult economic times.  Then again, there will be companies that drop products that are not part of their core business.  I want a roster of these moves.  This information should be instantaneous.  I am a hard core fantasy baseball junkie and I tell you there are sites that send me daily information regarding any of the players on my roster.  If I need to know, I can find out how many times A-Rod sneezed this week while training in a particular climate.  So, where can I get this kind of information on the fastener industry?

I also want to hear more international news.  I was checking out LinkedIn again yesterday and I saw a note from someone in the fastener industry in Egypt.  I do not know the person but I might ask to link up just so I can ask questions about what is selling (or not selling) in Egypt.  Tell me where I can find that kind of information?  I am still looking for that.

As you readers already know, I am quick to point out any good news I find in the marketplace.  If I find a city doing well or a particular distributor doing well, I like to point that out.  But, I've gotta tell you...I have heard more news about layoffs in our industry than I have ever heard before.  It is a real shame.  Reduction in work hours too.  I only hope that as the year progresses that we see some glimpses of light.  My real hope is that, for whatever reason ,business increases and that all the end users (being served by all the fine distributors) out there sudenly need material and we are all frantically trying to refill the pipeline.  That kind of stress is so much more fun than the stress of low sales.  It is a bloodbath out there and I feel for everyone being hurt by the slowdown.

Please feel free to share any positive news that you have because I am sure we could all use a dose!!

I made four sales calls in a particular city today.  Quick trip and a conference call kind of limited the number of stops I could make.  I kid you not...3 of the 4 companies are having excellent business years.  One told me about how their largest customers have large projects going on and that this customer is also adding new products.  The next was a smaller distributor that was so busy they had to add a new employee to assist with inside sales and purchasing.  The third company with positive news is a large company with a lot of ties to the energy industry.  The only call I made in this town where business was slow was a call on a branch of a multi-branch company that offers VMI programs to select customers.  I was just really surprised to find an area that seems to be defying the odds.  More often as I make calls I am still finding that most people are down from about 15% TO UP TO 30%.   I guess I'll just have to schedule more time over in that area this year.

I would be inspired to hear from any of you out there who are also enjoying strong sales this year.  Our economy and our industry could use some inspiration right now.

I have been told in the field that three of the major suppliers of import fasteners have acknowledged that they had inventory and shipped cap screws that were mismarked as Grade 5's.  Something to do with the chemical make up of the steel. 

Many years ago the threat of the Fastener Quality Act caused the industry to unite and address the issue of mismarked fasteners, mostly because the alternative was to have the govenment jump in and to the policing.  There were to be "fastener police" who could swoop down like a swat team and invade your company to inspect product if there was reason to think a company was selling the mismarked fasteners.  If you think about it, probably 90% of all Fastenal employees do not even remember this.  The Fastenal work force is so young they probably cannot recall when this all happened.  But it was a big deal  A HUGE deal.  I know these mismarked fasteners are being discussed through the fasener grapvine but I do not yet sense such a cause for panic.  One person told me (wrong or right) that the physical characteristics of these parts will behave as though they are Grade 5's...but something must be different.

Please shed some light on this situation if you are able.

I'm kind of intrigued by another internet based tool called LinkedIn.  Basically, it is a networking website that allows you to connect with other business associates.  You can find it at www.linkedin.com.  I have been invited by some fastener people to get "linked in" to their network.  When I did join in I saw a lot of my customers and a lot of suppliers also linked in.  Some people leave schedules of what they will be doing or where they will be traveling in the upcoming week.  There are also groups you can join and even one for people in the fastener industry.  There are some discussion groups availabel too.   I really have only started to get used to the site but already I have tracked down two former customers who have changed jobs and moved to other states.  They worked for distributors and the change came so fast I lost track of them...till I got linked in!

Another good networking tool that I recommend you check out.

Who knows what will be the result of the new stimulus package? It could be a long time before we see any results and then it will be hard to determine what caused what.  Still, as I hear about the infrastructure expenditures, I would have to think that distributors that deal in the construction industry have got to be upbeat.  Many of these companies are members of STAFDA and they sell tools, abrasives, concrete supplies, fasteners, extension cords, etc.  Certainly fastener distributors will participate with structural bolts, tension control bolts, cap screws, threaded rod, etc.  And, if the economy picks up some then the benfits could overflow because of the general rise in the business climate.  But the companies that sell to the job sites...it just seems to me that they stand the best chance of seeing the early benefits of the government spending.  It reminds me of the Governor from the state of South Carolina.  He was on the news saying he did not agree with the stimulus package but he would still consider taking the money because he represented 5 million people in the state and he had to consider what was best for them, even if he disagreed with the approach.  You may or may not like that the government is going to go out and spend your money but it still seems prudent to pay attention where it is going to be spent.

Just reading my Sunday morning paper and I stumbled upon an article by Thomas L. Friedman.   He talks about the "easiest way to stimulate out economy:  immigration".  In the article, he quotes the editor of the Inian Express newspaper, Shekhur Gupta, who states in a slightly tongue in cheek manner, "All you need to do is grant visas to 2 million Indians, Chinese and Koreans.  We will buy up all the subprime homes.  We will work 18 hours a day to pay for them.  We will immediately improve your savings rate - no Indian bank today has more than 2 percent nonperforming loans, because not paying for your mortgage is considered shameful here.  And we will start new companies to create our own jobs and jobs for more Americans."

Hmm.  Pretty big talk.  A little presumptious but it makes one think a little.

Further in the article, Friedman write another note, supposedly from a non-American's point of view that says:

"Dear America, please remember how you got to be the wealthiest country in history.  It wasn't through protectionism, or state-owned banks or fearing free trade.  No, the formula was very simple:  build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat."

As our unemployment rates hit their highest levels in many years, this idea is probably not a popular one.  Still, we also know that as Baby Boomers grow older and leave the workforce, there will be a several year lag before the "Echo-Boomers" grow up, graduate, get experience and contribute in a way that will replace the aging Baby boomers. 

This article has NOTHING at all to do with our industry.  It is about immigration.  But, I cannot help but think of the many articles I am reading in FIN and the American Fastener Journal regarding the EU anti-dumping duties on steel fasteners from China.  Or, the threaded rod situtaion that came up in 2008.  Fair trade is something that needs to be monitored and addressed.  But, I have noticed that as soon and the tariffs were levied on the Chinese threaded rod many in the industry set their sites on India and have started to import rod from there.  But are we, in fact, protecting domestic industry or are we looking for the next competitive edge?

I admittedly and one of the least knowledgeable people on the subject of free trade, unfair dumping and tariffs.  I sell fasteners but I do not import them myself.  I work with companies that do import them and I sell to people that want to buy them -- if the price is right.  I work with companies that "mix" domestic and import at times.  There are still a lot of domestic manufacturers in the fastener industry that would just love to see customers return to them in support of our domestic industry.  I just do not see that happen very often.  We generally are looking for the next good deal.

Recently I wrote that most distributors I call on are down anywhere from 15% - 50% from last year.  I'd say somewhere around 20% - 25% is the most common answer I hear when I ask how much sales are down.  Every now and then I do get the distributor that tells me they are stable or pretty much keeping up with last year.  In each case the reason they are holding steady is NOT because their current customer base is buying the same amount as last year.  In each of these cases they are taking on new customers.  They are stealing other people's business.

Right now is one of those times where companies would love to see new sales opportunities.  As a sales manager recently said to me "in times like these you need to make 7 sales calls a day if you had been making 5 per day".  Advertising is a great thing, but go pound on some doors and people will talk to you.  They will go over your quotes.  They will let you look at things that are on their desk that they were not intending to send to your company.

Companies that purposely trim their customer base in an effort to run on the 80/20 principal have got to be kicking themselves in times like these.  Now, do not get me wrong.  The 80/20 principal is a great thing.  But, let me tell you how I view the 80/20 rule.  A salesperson looks at the 80/20 rule and they recognize the precious 20% of customers that contribute the most to the growth and vitality of their company.  The salesperson wants that customer to know they are important and will make every attempt to provide them with excellent customer service and quick resolution to any customer service problems (and everybody has problem at least once in a while..how we deal with them is what defines us as suppliers).  Salespeople always want to find a way to treat the other 80% fairly, courteously, and with a win/win attitude.  They just know they want to make sure the 20% never suffer as they take care of the 80%.

My observation is that accountant driven companies look at the 80/20 differently.  They seem to want to drive away the 80% who "just use us for pricing", or "waste our time".   Sometimes they seem to resent and even detest the 80%.  Seriously.  They blame the 80% for problems at their company.  What is more interesting, they want their salespeople to go find them more of the 20%ers.  Sometimes it can be done.  Sometimes, there just are not any more $250,000 or $500,000 customers (pick your magic number) out there to just go swoop up.  So, the Accountant or Owner playing the role of Sales Manager gets aggravated with the sales force bringing them opportunites that do not match their "target account".  Often, they turn away good business opportunites because THEY cannot figure out a way to make them work. 

In economic times like these, suppliers might want to revisit their minimum order amount.  Or possibly be flexible with some pre-paid shipment amount.  Especially if you know that the company you are selling to is financially stable and can pay their bills.  And finally, to those of you looking to reduce your work force.  Go easy on the sales people.  That salesman you get rid of might be bringing some of your business to somebody else before you know it.  Before your get rid of them you might want to let them go through their notes with you just one more time to see if there are any "diamonds in the rough" that could develop into some new business for your company.

Just a couple weeks ago President Obama visited Cardinal Fastener and showered the company with praise suggesting the company was positioned for great growth with the new push towards wind energy and Cardinal's ability to supply bolts for wind turbines.  Two weeks later I read where Cardinal is laying off 7 employees.  Please understand, I am not trying to say anything negative about Cardinal here.  They are doing what they have to do based upon the current economic conditions.  But, c'mon folks, you've got to admit the timing is just a little bit ironic.  I believe that Cardinal will prosper if all the plans for wind energy come to fruition.  But, even a presidential visit cannot make these things happen quickly enough.

I read an article from www.fastenerjournal.com about an economic forecast from the Institute for Trend Research's Alan Beaulieu.  He said that overall 2009 will be a bad year and that the first half of 2010 will be negative with a mild recovery in the second half of 2010.  You can read more of the article yourself if you wish by going to the site.  I also receive the Kiplinger Letter and I think the last forecast they gave suggested that the first half of 2009 would be rough with a little bit of recovery coming in the second half of 2009.  So, that reports sounds a little bit better than that of Mr. Beaulieu.  Then, to really depress (no pun) everyone, I just bought the newest book by Harry S. Dent regarding what he calls the next great depression which he fully expects to see hit near the end of 2009 and into 2010 with the earliest signs of growth coming in 2013 or so.  I have not read it yet, I am just saying what info was on the book sleeve.  And, I'm not trying to be Oprah here but I will absolutely be checking back in and writing a few notes once I complete that book.  I read a lot.  I know that there are at least 2 or 3 of you out there who read this blog and I would like to ask you to please suggest any good business books you might have read lately. 

Most people I call on are down this year anywhere from about 15% to 50%.  A few people have some new customers they are about to land which will help make this a better year than they would otherwise be expecting.  These new accounts seem to be ones that they have been working on since last year.  And again, every OEM is asking every distributor when they are going to start seeing their prices come down now that raw material costs are going down.  And...every distributor is telling every customer that they are sitting on 4 to 6 months of old inventory and until they work that off the end user will not see a price reduction.  With business slow, it is more likely it will take distributors more like 7 to 12 months to work off the old inventory.  There is the occaisional end user that just INSISTS on IMMEDIATE price reductions and those distributors are putting on their negotiating hats and seeing what they can do to share the pain with suppliers and customers.  Now, I 'd just like to point out to all sales reps (independent or direct) that I have just done your call reports for January so feel free to cut and paste and turn this info into your boss.  Problem is, you'd better change a few words so your reports don't all look the same.  To my fellow traveling sales peers -- tell me if anything I just said is innaccurate because I would like to hear if you are hearing anything different than what I just wrote.

I am, by nature, an upbeat kind of guy.  Kind of an optimist, half full sort of person.  But, even I am seeing that the marketplace is slow.  Slower than usual.  A wierd kind of slow.  No one fretted too much when they were slow in November and December.  A lot of people have told me that they were doing just great thru October and then in Novmber it was as if someone hit a switch and turned off the business flow.  Now, it is January.  As is my custom, I like to get out and visit as many customers as possible in January.  You know, get the ball rolling...kick off the new year.  So, as I visit people, I am hearing the news.  And folks, it's not very good.

Some distributors have seen some activity in January.  Some are a little bit busy.  Some are doing half the business they did last January.  If someone tells me there business is off 15%, they seem to be the fortunate ones.  Things are just really, really slow so far.  And people do not seem to be booking many future orders.  At this time, it is not like anyone can say that the first couple months will be slow but they are booking orders for March or April.  No one seems to have a good feel for when their companies will see an upturn in their business.

I would like to hear comments from anyone out there willing to share what they are seeing.  It seems to be a unique market.  Maybe the stimulus package will help...at least certain industries.  Even though the automotive manufacturers have received some financial aid, consumers are not buying cars yet.  So, what will it be that provides us that spark to start pulling out of this dreary market?

I have heard from several distributor customers that they are being asked for price reductions by their end user customers.  The end users see that raw material costs are going down and they are putting significant pressure on distributors to react immediately.  Problem is, we all know that the materials in the "Pipeline" are at the "old" costs -- you know, the cost of purchasing fasteners to make sure your good customers do not run out...at any cost.  I know many distributors are going back to their suppliers for cost breaks and I am sure they are hearing the same thing about old inventory in the pipeline.

Things are tough all over.  Dumping old inventory at a low margin just to turn over the expensive inventory is difficult if end users are buying less.  Will be interesting!

Think big.  Real Big!  No, not LeBron James.  BIGGER.  OK, maybe it is a tie.  President-Elect Obama will be visitng the large diameter bolt manufacturer prior to his Inauguration.  Congratulations to John Grabner and his organization.  It is believed that President-Elect Obama's visit will focus on components used in energy-related projects including wind turbines.  I have had several conversations with Cardinal's Sales Manager, Jeff Grabner regarding the growth opportunity for his company in the Wind Energy Industry.  Apparently, Cardinal's aggressive strides in this industry caught the attention of more than just the Traveling Salesman.   I have been fortunate enough to tour Cardinal and was very imprssed and I am certain your visit from Mr. Obama will be a great success.  I am sure you will serve our industry well by being great ambassadors representing the Fastener Industry.

During the presidential elections, candidate John McCain visited another Cleveland, Ohio based fastener business, Nova Machine.  Two visits to fastener companies in Northeast Ohio in the past few months from some impressive visitors.  Way to go Fastener Industry.  And, as Chrissie Hynde of the Pretenders said, "A,O, Way to go Ohio".

I will take on the role of the "Dummy" doing economic forecasting for the sake of this blog site.  None of you readers has sent me your economic forecasts and I cannot just leave the page blank, so here we go.

Before I begin, let me just tell you what a shock I had earlier this week when I was visitng a customer in Erie, PA.  My customer said, "T.S., I just had a record December.  And November was good too."  Wow, that shocked me.  I thought everyone's sales were in the tank.  Turns out, some of the mold shops are refurbishing molds or something like that.  Eventually, those molds will be used by people molding plastics or rubber or some such product.  So, while my distributor customer is busy today fixing up these molds, the end user will be busy somewhere down the road, in the not too distant future,  when they actually make products with the molds.  Plastic parts.  And hopefully, lots of plastic parts.  And, at that point, business will be good again and the economy will be on the upswing.  You see, pretty much all you really need to know about economic forecasting can be found out with at quick trip to Erie, Pennsylvania!  The fact that molds are currently being refurbished  for future use is...well, it is kind of like a big stimulus package.

Ah....I see I have some skeptics out there.  All right.  Fair enough.  There might be a hole or two in my prognostications.  A few thin slivers of light seeping through what is otherwise a an ironclad, fully sealed thesis.  So, let me fill in the blanks.

On Yahoo! News today, I read where President Elect Obama said "the recession could linger for years unless Congress pumps unprecedented sums from Washington into the economy".  The same report states that the federal deficit will reach an unprecedented $1.2 trillion this year (not even Brighton has that much cash) - so what's the difference if we hand out another $800,000,000,000.    See, it's going to happen folks.  There is going to be "stim