What are Importers, Dealers, and Distributors

by | Oct 4, 1998 | Articles

Originally Published in 1998
Until the late 1970’s in North America, there was a distinction between importers, dealers, and distributors. There were channels of distribution. The number of stone dealers in the 1970’s were small compared to today’s numbers.

THE IMPORTER

Most all importers in the marketplace knew each other. The importers traveled the world in search of stone that they felt would sell in the market place. Perhaps the stone was new like Violetta from Saudi Arabia or Taiwan Green Marble. The importer would take the risk and bring in some tiles and slabs and try them out in the market in hopes they would sell. The importer many times stocked the material by the container/truck load and sold through the local outlets in a specified territory either through established distributors, dealers, or contractors for specific jobs, by the pallet or box or bundle.

The importer would have to get this new material out to the customers and in turn develop a market need for this stone in the design/architectural marketplace. If there was no demand for the stone, then the distributor or dealer did not want to handle the stone in most cases. The importer took great risks and in most cases stones they brought in for sale that were new did not work out in the long run. Probably 10 to 20 percent actually had selling power.

The importer would also finance everything from the Letter of Credit to the supplier to selling the buyer on open account and collecting the money. An implied warranty was on the stone, which gave the buyer a sense of safety and security. If the stone was not what the buyer thought it should be or there were some quality problems, he sent it back or didn’t pay the importer. The importer would work out a credit for such problems and take care of it.

This all changed around 1980 when the demand for stone rose. Distributors, contractors, and even dealers or owners/architects started to import directly. The importer then had to change his strategy of buying and selling stone. The risk of importing became a nightmare to many in the market place. Even the producers overseas found new headaches and problems with the buyers who did not know what they were buying or how to buy from overseas.

 

THE DISTRIBUTOR

The distributors’ most important role was warehousing stone, and secondly to have a showroom and or sales representative go out and show and sell stone to the dealers, fabricators, and contractors. Before 1980 most distributors were just this, warehouse sales companies. After 1980 distributors became importers.

To control stocks of tile, slab, and other stone products became a real challenge. New computer systems came about just to try and handle this. Mixing and matching shipments of stone became a challenge as well. Predicting and having the right stock, color, size and quantity a buyer might want is the challenge all distributors face and will always face. Pricing this stock for the marketplace became increasingly difficult. Exchange rates were constantly changing in the foreign market and the replacement costs of inventory affected the sales. Competition with new companies stocking was on the increase. This also affected the price of stock. The quality or selection of stone changed the level of prices. Since many buyers did not know various selections of a stone were available, they too were not familiar with price differential. When new stones of similar color entered the market from Greece, Turkey and other countries not well known in the market place before, the pricing of stone again became difficult and more competitive.

The market opened up wide and started swallowing all these new companies. The channels of distribution from factory to importer, to distributor to retailer/dealer all started to change. Importers started distributing and retailing stone. Retailers started to import. Factory agents or representatives started selling commercial jobs direct to the owners of buildings or at least direct to the contractors. Prices again were up in the air.

The favorite comment by many distributors and contractors in the 1980’s was “I did not know that Nero Impala had three selections, light-medium-dark.” Or another comment was “Did you know that Crema Marfil could be selected by grades such as Extra, First Choice, First Commercial, and Second Commercial?” Each selection affected the price and most new buyers who never traveled to the quarries and factories or had long term experience with the stone knew of these issues. Information on stone was and is still limited in its availability. Today more information is available then ever before but still lacking in depth as far as architects, designers, and serious stone people are concerned.

 

THE DEALER/RETAILER

Dealers prior to 1980 were not available in large numbers as they are today. Dealers would try and support the importer or distributor by showing their samples, and when a job came available, they would buy from the company whose samples they used. Most dealers were in ceramic tile or stone fabricating yards. The ceramic dealers would show small percentages of stone in comparison to ceramic in vignettes, which were not always of central focus in the showroom. The knowledge that most dealers had of stone was very limited, which caused them to not promote and sell the stone well. This lack of knowledge just promoted insecurity. They were insecure on how to sell the variation of natural stone, how to install it, and how to maintain it. Even today, some of these insecurities still appear, but are quickly becoming addressed.

It was expensive and time-consuming dealing with the consumer on stone. Luckily most consumers were not well educated about stone and did not ask difficult questions or shop for the stone as they do today. The fabricator would try and show larger quantities of stone to the buyers and work with them on a more educated basis. The ceramic dealer would show a much more limited sample range of the stone and not know as much about the stone itself. Both dealers were competing with each other. The stone fabricators did not want the ceramic dealer entering their domain. Only stone setters should handle stone. During the 1980’s it became evident that the ceramic dealers handling stone were here to stay. Specifications for the thin setting of stone by ceramic installers became normal. It was also known that ceramic installers could set stone tiles more cheaply. This did not mean the quality of such installation was better, only the price.

In the 1980’s many of the dealers started to sway from the supplier of the sample boards and shop the price on each and every sell. The architect/designer in many cases did not give a lock specification for the supplier and thus entered the term “and or equal”. This is still being defined today. The lack of support for the supplier of the stone also caused many suppliers to put fictitious names on the stones to protect themselves and give themselves and better chance of obtaining the sale. Today the dealers have found that stone is and can be a serious percentage of their business and are devoting much more prime space in their showrooms to display stone. They are searching for stones that fit their clients demands like buff colors, rustic stones, patterns and designs, trim pieces, etc. Dealers are educating their salespeople about the do’s and don’ts of stone. The consumers today are more educated then ever about stone, and are asking more questions and shopping the stone purchases.

 

SUMMARY

Many changes have occurred in the last 25 years in the stone business. Let us hope that in the next 25 years we all expand our knowledge and appreciation for the stone we sell, and reduce the problems everyone has that are a natural part of the stone industry.

Since the main aspect of selling thin stone tiles came about in the 1970’s new outlets for selling of the stone have had to develop like the ceramic tile dealers. New installation also had to be established. Adhesive companies started promoting new adhesives for thin setting stone. Until 1970 the honed floor tile was more normal then polished marble thin tiles. Now came about the need for another new market, maintenance companies. “How to maintain this polished marble?” became the leading question since 1980. The debate still continues.

The dealers have expanded and now there are ceramic dealers, carpet dealers, wood flooring dealers, do-it-your self-dealers, and fireplace dealers, just to name a few, are all selling or showing stone. The fabricating dealer is today mostly concerned with wavy type granites and kitchen countertops. These dealers have had to put in new machinery to handle this product and produce the edge works and production levels the market demands. With the introduction of water jet cutting machines new designs in stone are available thus expanding the uses of stone and the types of dealers of stone. With all this growth has come hundreds or thousands of new stones and finishes from over 34 countries. The types of stones being sold has also increased to travertine, granite, limestone, marble, gabbros, sandstones, slates, onyx, quartzite’s, and many more increasing the challenges of the importer, distributor, dealer and maintenance company to handle the various finishes and types of stones now on the market place.

Today it is even more difficult to differentiate between the dealer, importer, and distributor. The distributor was considered originally as the wholesaler of stone. Many of these wholesalers are selling direct to the dealers and to the owners/architects. Most major distributors are importing directly. It has become increasingly easier for anyone to import, as it has been for most producers overseas to sell directly in the market place. With the advent of computers, homepages and internet, more and more people are learning about stone and able to communicate directly with the factories then ever before and do so inexpensively. Stone trade shows have increased to the extent that one can go to a stone show every month. They normally are opened to the market place allowing anyone to go and see stone. The stone business is well and alive. The residential market is carrying most of the sales presently. The importer, dealer, and distributor are all waiting for a strong upturn of sales in the commercial market. The transition that the stone industry is in will continue for many years. It is hard to foresee the future and who will survive. Stone and ceramic tile will increase in sales yearly benefiting dealers the most. The natural growth will be for the importer/distributor to become one and in turn combine with the producers. Only time will tell if this actually occurs.