The National Marine Distributors Association’s STEP conference started Monday, with an annual gathering of distributors, manufacturers and manufacturers’ representatives. The event, taking place at the Sheraton Chicago O’Hare hotel, is expected to facilitate more than 900 meetings between distributors and manufacturers by the time it wraps up July 27.
The mood at the conference generally seemed upbeat. “Distribution is healthy,” said Michael F. Conners, vice president of national sales for Brunswick’s Marine P&A. “Early on, the weather gave us a late start, but there was a pent-up demand that kicked right in. It has been a good season.”
“This has been a record year for us,” David Karpinsky, president and COO of Taylor Made Products, a division of Lippert Components, told Trade Only Today. “The economy is strong, interest rates are low, and while the tariffs may have a dampening effect, we’re still seeing enthusiasm from consumers. Our business hasn’t tailed off as we head toward the end of July.”
“Business is good,” agreed Don Kirkland, president of MESCO, a New Jersey-based distributor. “Despite the late start because of the weather, we had a strong second quarter. All in all, we remain encouraged.”
The distributors did see some headwinds this year. Kirkland said that competition from e-commerce giants such as Amazon and other online retailers continues to impact business for two-step distributors and their retail customers.
“The disruption in our world is profound,” Kirkland said. “We’ve been fortunate to be strong in boatyard supplies and maintenance items, but retailers selling soft goods, electronics or other aftermarket accessories have been impacted. They often face it head on and price-match when they can, but it puts a lot of pressure on the dealer and manufacturer.”
Richard Wittel, senior director of purchasing and product management at Land ‘N’ Sea, also has seen competition for products rise with the lift in new-boat sales. “We have been competing with the OEM market for the same products,” he said. “Some manufacturers have had difficult times supplying products to both segments.”
Conference attendees heard Eugene F. Zelek — an attorney with Taft, Stettinius and Hollister specializing in commerce — speak about the challenges manufacturers and distributors face from online retailers and unscrupulous resellers. Zelek spoke about “corrosive price competition” and the difficulties manufacturers and distributors face with constant pressure on margins.
“Resale of products is a growing problem, and there are a range of ways to deal with it,” Zelek told Trade Only Today. “We think the best solution is holistic and that allows manufacturers to control distribution better and making sure there’s enough margin for everyone.”
Zelek said that some industries are using business practices and discount structures from 30 years ago. “It’s a moving target,” he said. “But there are ways to mitigate the impact of what is happening today. Manufacturers need distributors and vice versa, and they both need people to sell to the end users. It’s often a matter of finding the approach that works for both.”
STEP continues today with purchasing meetings between distributors and manufacturers.