STAFDA looks abroad

NASHVILLE, TENN. —A concert of tack hammers, air compressors and nail guns played to a packed house here at the Gaylord Opryland convention center for the 31st annual Specialty Tools and Fasteners Distributors Association (STAFDA) trade show.

Larry Wegman was one of the more than 5,300 attendees walking the show floor in pursuit of new products or new opportunities. Like many distributors here, his focus at the show was influenced by the possibility of higher tariffs on nails and fasteners imported from China and the United Arab Emirates.

“We’re looking for new suppliers, any kind of new technology, especially in the fastener end of it,” said Wegmen, head buyer of Morgan Wholesale Building Materials in Dunmore, Pa. “Because of the impending tariff out of China there’s a lot of new technology and a lot of new countries manufacturing the materials.”

Currently, the industry awaits word from the U.S. International Trade Commission regarding the anti-dumping petitions that could lead to significant duties on nails. He said a lot of other distributors are looking around to cover their bases and are following the anti-dumping issue closely. “Everybody is,” he said. “If they’re not, they really have their head buried in the sand.”

Tariffs and sourcing from China were among the many topics to generate discussion at the Nov. 4 to 6 event. Competition and the costs of doing business were big themes at the convention, while the current housing downturn and the increase in industrial construction provided the framework for industry outlooks.

Greg Drouillard, president of STAFDA, encouraged members to “welcome the competition” during his state of the industry report.

“News in construction isn’t all bad,” said Drouillard, owner of Target Building Materials, of Windsor, Ontario. Case in point: During the first eight months of the year, non-residential building in the United States was running 3 percent ahead of last year.

“The market for renovation is strong,” he said. “There are still plenty of opportunities for STAFDA members, although you may need to shift your sales emphasis. That won’t be the first time for most of us, and we are fortunate to have that flexibility.”

Still, these are competitive times for STAFDA distributors, and controlling costs will play a major role in success—especially delivery costs. STAFDA’s 2007 distributor profile report showed only 27 percent of distributors enforce a minimum delivery charge, and the average is just $25. Meanwhile, it’s taking longer to reach customers.

“It’s no longer possible for distributors to absorb freight costs, so we need to seriously consider controlling some or all of these costs with pricing strategies,” said Drouillard. Options include a “real” minimum delivery charge, he said, a fuel surcharge or some offsetting savings the customer can earn by picking up his order.

On the showroom floor, distributors and manufacturers voiced concerns about the housing downturn, the strength of the Canadian dollar and impending tariffs on Chinese imports.

“The Northwest hasn’t been hit by the [housing] downturn as bad,” said Rick Thomas, president of Edge Construction Supply in Spokane, Wash. Thomas was president of STAFDA in 1981 and continues to support the mission of the organization. “STAFDA’s brought a lot of distributors and manufacturers together,” he said. “That’s been the important part of it. One of the most important things is you get to talk to the top echelon of manufacturers while you’re here.”

He described business as strong. “We haven’t been hit by the housing crunch as bad. Commercial construction is going really well,” including major investments in the nuclear power industry. And several high-tech companies are building data centers in his area in the Pacific Northwest.

He expects business to be affected by tariffs, but an even bigger question mark is the devaluation of the dollar. “A lot of the Europeans are coming over here and buying up companies.”

The U.S. dollar is also a big question mark for Pierre Cartier, president of Fixations Premier in Quebec City, Canada, where the Canadian dollar is stronger than it has been in about 40 years.

“We’re trying to figure out how [tariffs] could affect us,” he said. “What is affecting us now is the U.S. dollar situation because we buy in the U.S. It’s a challenge to manage.” Also, the company feels a drain on sales as some customers buy in the United States or go to the Web for their purchases.

Fixations Premier is also trying to add new suppliers and products to the company’s repertoire. “We’ve been very specialized for so many years, now we’re trying to add new products,” he said. “That’s probably the same answer you received from everyone else.”

There was no shortage of new products at the show. At the Kapro Tools booth, company reps were dropping heavy weights on the new Zeus 990 level to show its resistance to damage. (The Zeus also featured a horizontal vial that illuminates at the touch of a button and an easy to read Plumb Site Dual-View vial.) PrimeSource Building Products promoted its new Grip-Rite PrimeGuard Plus pneumatic fasteners with proprietary coatings and cobranding with Rust-Oleum. At the Isaberg R a p i d booth, distributors gathered around demonstrations of the R211 hammer tacker, which promoted the concept of “no loose parts.”

The convention included several educational sessions. Dr. Al Bates, president of Profit Planning Group and STAFDA’s financial consultant, told a room full of STAFDA attendees that the key to making money in the current housing downturn is to take a tighter control over payroll and expenses. Bates said that it’s easy to make a profit when sales are up, but when they are down salaries still go up, and employers need to manage that growth much tighter in order to make a profit in a tougher market.

Attendance was another storyline here in Nashville. There were 968 booths at the STAFDA show, up from 933 last year. About 21 percent of those booths are new companies, “plenty of new vendors and new products,” said Georgia Foley, STAFDA executive director.

Because of fewer attendees per company, the overall attendance figure of 5,300 pre-registered attendees was down from the previous year’s record showing in Las Vegas. “Still this will easily be our second largest convention,” said Foley.

Next year the STAFDA convention and trade show is heading to Denver. The organization changed gears for 2009—moving to Atlanta, instead of New Orleans, which carried concerns about a slower than expected recovery, including high crime rate, according to Foley. The dates for the 2009 Atlanta show will not change from the previously scheduled Nov. 8 to 10.