2020 is a year of change in the rep community. And the change is creating new opportunities.
There have been
- Many lines that have changed agencies which, considering the circumstances, was surprising.
- Some are being forced to make changes due to manufacturer consolidation.
- Agencies moving into new, contiguous, markets either by plan or at the request of a manufacturer.
- There have been some start-ups due to distributors, manufacturers and agencies downsizing personnel who decided to start an agency.
- And there have been acquisitions.
In August Hossley Lighting Associates, a lighting agency, merged with Lighting & Power Solutions, which was a lighting and electrical material agency.
Acquisitions = Expansion
This trend has continued with Foley Group merging with Convergence. Here’s a link to a video with the announcement. The underlying theme of the merger is an end-user focus. In watching the video there is one word you won’t see (we won’t ruin the surprise, feel free to reveal it in the comments section!)
According to a press release:
Foley Group, Inc. and Convergence Partners, Inc., announced today the completion of the merger of their companies to offer the electrical industry a unified resource for virtually all their products, services, and design needs. The merged business will operate under the Convergence Partners brand.
\”Convergence now represents over 213 manufacturers including Hubbell Lighting, Lutron, and Legrand,\” Convergence president, Peter Kurtz said. \”The availability of Lighting, Electrical Materials, Audio Visual automation, Shades and Furnishings from one resource is unprecedented within the market niche in this territory,\” said Kurtz.
\”Helping customers solve problems more effectively and efficiently is a top priority,\” said executive vice president, Scott Denney, \”and our combined number of account managers and product experts will help ensure streamlined interactions for architects, electrical engineers, lighting designers, electrical contractors, distributors, and end users as well,\” he continued.
Mark Denney, vice president projects and quotations stated, \”Our industry partners will realize the convenience of accessing high-quality, technologically-advanced products, and appreciate the specialized proven expertise that ensures customers at all levels are well-equipped to readily implement the best possible solutions so the goals of everyone involved come to fruition.\”
According to Inside.Lighting, “The new business has a lighting line card highlighted by Hubbell Lighting, Cree Lighting and Lutron. It also has an electrical supply line card that includes GE lamps, Legrand, and Fulham. In addition to electrical and lighting, the company offers A/V, shading and furnishing solutions.
The Kansas City lighting landscape recently shifted in 2018 when Acuity Brands moved from Foley Group to Premier Lighting & Controls. Shortly thereafter, Foley started representing Hubbell Lighting.” And “the one potential conflict to watch is to see how Hubbell Lighting and Cree Lighting coexist with one agent. History tells us that those brands usually don\’t prefer to share a line card with one another.”
And yes, you did read right … over 210 lines for a 30+ person agency! Should be interesting to manage and, from a third party perspective, wouldn’t be surprised to see other line changes occur if there are viable marketplace opportunities.
And now there is another start-up with a unique multi-channel approach.
Start-up = New Model, Multiple Channels
As many know, Panduit undertook a significant change in the structure of its sales organization this year. Through that process, Dan Murphy and V.J. Ladd, both formerly with Panduit got the entrepreneurial bug and decided to form an agency. One of their observations in surveying the market was that the electrical and electronic channels were beginning to overlap.
This gave them the idea to start an agency focused on the customer where the customer selects which distributor and channel to support. Manufacturers can retain them to serve both channels or solely one. The reality is that a small subsegment overlaps, depending upon the product offering. The customer (either end-user or installer (contractor)) will make the choice. The benefit is that a manufacturer can have one rep who can balance the channel challenges of both channels.
Dan shared their thought process on why they started Apogee Solutions Group.:
WHY I DECIDED TO START A REP AGENCY
After almost 25 years, my former employer made changes that created an opportunity for me to explore the next chapter of my career. After discussing many options with my long-time friend and co-worker, V.J. Ladd, we partnered together and founded Apogee Solutions Group, a manufacturers’ rep agency focused on filling a cross-industry need we identified as a result of our combined 50 years’ experience.
Our background provides us with extensive knowledge of the electrical, electronic, and industrial segments, understanding the channels and seeing how and where they play within the vertical markets. With advances in technology, automation, complexity in design and network needs, the spectrum of products used is constantly increasing, making it more difficult for an account to be serviced by a single channel segment. Due to these advances there has been an emerging trend of distributors from different segments being pushed, by customer demand, into accounts they normally do not service. For manufacturers, specifically those whose products can cross many verticals, aligning with more than one channel segment can open an entirely new account base, create a great opportunity for vertical market expansion and increase overall access to market.
There are not many options for manufacturers when it comes to rep agencies providing coverage across market segments. Many manufacturers hire rep firms who service a specific segment and then have difficulties expanding into other areas, sometimes areas of strategic growth. Apogee Solutions Group, is truly a cross-functional agency supporting manufacturers in all relevant channel segments and vertical markets. Even in cases where a manufacturer may already have representation in one segment, we can expand that to other segments and to other verticals independently.
So, the rep world is going through change. A couple of commonalities:
- Focus on the end-user market, so demand generation.
- The need to innovate while being flexible (due to manufacturer changes).
- The need for more agency options for manufacturers (and consolidation occurs due to succession planning.)
Distributors, what are you observing about agencies in your market?