Prochem pissing on the little guys

[Chads]

I have meant to post his for some time now. Prochem took away a dealers right to buy straight from them because they are to small of a supplier, but they had been doing business with them for quite a while. Our local janitorial supply where I have been buying chemicals from was targeted by Proline out of sacramento , because a customer was up there getting some work done and opened his mouth that he buys the same chemical almost 50 miles away cheaper than they have it. Proline threw a fit and a guy who has a very honest business was told that he could not buy from them no more, because he was to small of a distibuter. and there would have to buy all of prochem products from Proline to resale to us at set higher price, not what he thought was a fair profit but what the punks wanted it at. Proline prices everything way high and treats people like crap if your not buying one of there 20k truckmounts from them. what a joke of a company that treats people like this. I have talked to plenty of other carpet cleaners and they feel the same way. Why a big company in a monster size city would worry about a small town local janitorial shop is beyond me.

 

[John Olson]

There are two sides to every story...I don't know this story but I can assure you Prochem doesn't bow down to anyone. Proline couldn't get Prochem to do anything. How do I know? Because I'm a Prochem Distributor and just who do you think is the biggest or was the biggest Prochem distributor in the world when I was approched to be a Prochem Distributor? Trust me on this one if Interlink/Hydro-Force couldn't stop Prochem from giving little old me a distributorship why would you think Proline would have any weight?

Distribution is a two way street. If they were not keeping their end of the agreement then yes they should have it yanked. Letting just anyone sell your stuff isn't always the best thing ask several of the manufactuers on this board how it's been letting the guy selling out of his garage or rented storage shed sell their goods. I know many are re-thinking that trend and putting a stop to most of it.


You do know that you don't have to buy from proline if you don't want to right? I like Steve and Noel. They have been nothing but gentlemen when dealing with them on many issues including mutual customers but if you don't want to buy from them you can shoot me an email I have your card on file

 

[steve frasier]

some companies expect their product to be sold at a certain price (bose, temperpetic) they don't want it discounted

 

[Ryan]

Its in any company's best interest to keep the MSRP.

How do you feel when you see $9.95 a room signs? Thats how they feel when they see someone selling their product below the MSRP.

 

[Desk Jockey]

Manufactures want to see product moving, that doesn't mean squeeze out the little guy, but it does mean the little guy has to work just as hard as the big guy to move product or they will move the line to someone who will.

It's mean, but it's like that with all businesses.

 

[curt johnson]

I can see both sides of this....but if we try to charge a premium for our own service to our customers its hard to complain when we have to pay a little more for our supplies. Chemicals cost a fraction of what we make.....hell, even our truckmounts cost a fraction of what we make when you think long term.

I haven't broken costs down in a long time for a gallon of chemicals but about 5 years ago a $50 container of Oxyblaster would gross me about $2k in tile cleaning.....and for a while I actually bitch about the price!

 

[Chads]

The guy who owns the janitorial store is one of the nicest person I have ever met , I think he is even nicer than John Labera from Mytee and that saying something. and to see something like this really gets you ticked. I guess he will just have to sell more CTI chemicals.
And do you think nothing happened if Proline hadn't bitched and complained. John I will never buy anything that I dont have to from Proline those guys must have the wool pulled over your eyes.

 

[John Olson]

Chad they violated the distributor agreement. I just checked. You need to be mad at your friend not Prochem.

 

[Chads]

What in the agreement did the break?

 

[cucu]

John is a great guy both to buy from and to hang out with , but there is no way i would do either with steve from proline he fights hard to hold on to his customers and in the few dealings iv had with his company only ever found them to over charge and try to get deeper into my pocket.(he even called Les a shadetree tm builder)

now that been said im sure the rents on both his places is high, payroll etc and he does carry a lot of stuff on the floor.
but i find CMS (who are just down the road) to be more honest , and on a par with John and Les when it comes to spending money on equipment and supplies or just to hang out with

 

[John Olson]

What in the agreement did the break?

That would be a nunya....so I didn't ask.

 

[Chads]

John I dont have all the info but sure sounds pretty shady to me, and right low down that they would throw a hissy fit over a little janitorial shop, becuase they were being told what kind of crappy business they do, and yeah on a small we make money off these chemicals but that dosent mean to charge the hell out of us. and where is the free market left in this country to let one set a price for what they are selling. just so every Tom, Dick and Harry can feel equal on the internet knowing someone cant do any different selling something cheaper with a set price. There has to be room for someone who likes to be thrifty out there, to be able to do the leg work and find a better deal if the want to save a buck. If you havent noticed its not good buisness. Its only good for the money hungry distibutors. John nothing against you, I will always buy crap from you, just pissed me off that people screw with the little guy. All I know is my price for each 6 pound jar of cleaner went up 10 bucks, thats 40 bucks a case. And my guy has to buy his from Proline now, so the get some type of profit. tell me where thats fair.

 

[John Olson]

I don't know what happened I do know as a distributor we agree to abide by basic agreements for the good of everyone. it sounds like your guy was selling way below list. This does nothing for anyone including him. there is only a 40% margin on chems. That is BEFORE shipping. My cost to handle a product from generating a PO to storing it to paying for it is about 18% so that means we net 22% so if we discount a product by 10% or offerign shippinmg discounts etc just how much do you think we greedy distributors are making? If there is someone out there that cannot do math that thinks they can buy something for $2 and sell it for $1.75 but make up for it in volume they need to be culled fro, the flock. More manufactuers HINT HINT need to do this. It might be goods for you for a minute but I can assure you that a distributor slowly dying and dragging the products he sells with him is not good for anyone

 

[TimP]

Sounds better than I thought John. Look at wal-mart I think they clear 2-3% profit. Retail margins are around 20-25% that's not counting the cost of doing business. 20% profit sounds very very good to me. Look at new car dealers, I believe they run on the lowest margins around.

Shipping discounts and volume discounts are par for the course. Look at Jondon and Interlink. As you buy more the price goes down and when you meet a certain total, of certain items, freight is free. I don't see how that violates any agreements. My family runs a floor covering business. Shaw/Mohawk etc, don't care what you sell rug for as long as you pay your bill and there is no MSRP what so ever. I don't think anyone should be told what they can or can't sell stuff for. I can understand advertising requirements but other than that this is a capitalistic country. I understand that you feel you run your business with high standards for customer service and Jelly Beans, but you charge a premium for it. But don't put down the companies that like to be competitive and sell in volume. People who buy from them know what they are getting and not getting.

 

[John Olson]

Tim I wasn't putting anyone down. 2-3% on 3-4 million a month is very good money 2-3% on 50k a month won't pay squat.

I don't think anyone should be told what they can or can't sell stuff for.

So you think anyone and everyone should be allowed to sell whatever they want? Everyone should allow me to sell their items and allow me to sell it for whatever I want? Think about that for a minute.

I made real and true statemets. I shared pretty close to exact what it cost us to carry a prodcut. The margins are not high $4 gross on $10 is very low return. Equipment and tools are much less. Do you know a Truckmount only gross's about $300 per year when amoritzed out over the life of the truckmount? They are the absolute least profitable item we sell. I have 80k worth of machines on my floor at any given time. I have 80k worth of chems. I have 100k in restoration equipment. I havbe 60-70k in accesorie. This is out of pocket money, not list price, that is here on my floor so you guys don't have to wait for me to order or drop ship an item and i'm just a little guy. One slow month and me and Lora don't take a paycheck 2 slow months and I have to cut my guys times 3 slow months and I have to lay people off.

Trust me we are NOT getting rich and I have alot of distributor friends and I know damn well they are not getting rich either. The rich distributors all have cleaning and resoration companies. We do not and will not. We are here for one reason and one reason only and that is "Our Only Buisness is Your Buisness""

 

[TimP]

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Tim I wasn't putting anyone down. 2-3% on 3-4 million a month is very good money 2-3% on 50k a month won't pay squat.

I don't think anyone should be told what they can or can't sell stuff for.

So you think anyone and everyone should be allowed to sell whatever they want? Everyone should allow me to sell their items and allow me to sell it for whatever I want? Think about that for a minute.

Anyone can buy and sell whatever they want. How did you become a distributor??? If only established companies were allowed you wouldn't be able to do what you're doing. Often times it comes down to buying a certain volume to get certain pricing. When we bought from whirlpool they demanded 30-40,000 of floor inventory to get the lowest pricing. That's what keeps people from buying whatever and selling whatever. Not to mention a building payment, insurance, electricity, taxes, paper work etc.

My inlaws have sold all kinds of things. Furniture, appliances, window treatments, flooring, cell phones, fences, electronics, lawn and garden, tools etc. It comes down to what makes you the most money and what your market is willing to buy. If you're only selling 50,000 of product then I can understand why you're pinching for every bit you can. That's a small gross especially for how much money you have sitting around. But if you're clearing 20% that's 10,000 a month after bills, that's way better than me or my inlaws who sell much a good bit more than 50,000 a month (when building was booming they were selling over 2 million a year). You need to increase your volume. I'd buy more from you if buying from you was competitive with Jon-don and Interlink as you're a person I'd be helping compared to a corporation. But it works out to costing me more. You may ship fast but Interlink and Jon-don are faster as I get everything the next day. From you it's at least 3 days. You have the chance to sell much more from the boards and from your e-bay deal than the average interlink dealer.

But anyways in our business everyone and anyone can clean carpet. And there is nobody to stop these 10 buck a room people. Like I said I understand MAP but I doubt they would blatantly do that. I bet it came down to not paying their bill, making a complaints/claims, selling truckmounts outside their area or something like that. I doubt it was pricing. Besides MSRP = manufactures SUGGESTED retail price.

 

[John Olson]

I have no idea why they lost the distribution I was addressing what Chad said. No manufactuer likes to see deep discounts. As for selling not everyone will sell to me. Unsmoke won't sell to me because I don't buy 3000 a month from them.

This thread is drifting. My while point in getting involved was to contradict chads assumption that Prochem was pissing on the little guy as I'm proof the big guys don't tell Prochem how to run their business.

 

[Chads]

Well I talked to the guy a little today and from what I got from it was two things, the main reason seamed to be that they are to close to Proline ,like a 60 mile radius and they dont like the cross compition, the second was just there way of getting rid of the small guy, they had rasied there prices and my guy dosent like to just jump the price way high, so he would bring it up steady, but not fast enough for them. especially when he is a small supplier he isnt buying big orders every month from them he is probally buying every 2 to 6 months. Either way I see as being pissed on if they sell it to him at anyprice he should be able to sell it for what he see's fit.

 

[Able 1]

How do they know what he's selling it for?

 

[Mikey P]

I have known Steve Kaufman for 21 years or more.


Always fair with me and has a real interest and history with this industry.


Proline has a fully loaded BIG show room with lots of employees and tons of over head. He tells me he is the largest Prochem TM mover in the US.
Being on the Peninsula in the SF, area I can assure you the rent is NOT CHEAP compared to rent in Yuba City .

I can only guess that this Janitorial company has a small shop with a employee or two and a full shelf of oven cleaners and floor waxes.
Just like the local Janitorial company we have here in Watsonville that sells a few Chemspec products in it's 200 ft floor space.


Chad, I'm curious how much your rates would go up if you had 6 employees and a shop with 4 trucks on the road?

 

[steve frasier]

when the JonDon store bought the local McDowell supplier, they started selling ProChem products even though the Local Interlink dealer was a couple of miles away selling ProChem

That didn't last very long, JonDon had to stop selling the ProChem line locally.

So you are wrong, he can't just do whatever he wants

 

[Chads]

I have never met Steve, I have only dealt with Noel, in sacramento. I just know how I feel when I am in there store. and knowbody will really step up and say it but there are alot of people I have talked to who dreads going in there store the only reason is for truckmount repairs and them really not knowing that there is a interlink store in the same town. Now only if interlink carried Prochem stuff. there probally would be no reason for people to go to there store and yes there store is very nice in appearance, but I will take the guys over at ccs/interlink anyday of the week.

 

[idreadnought]

I am on board with Chad because this was my supplier too.... For 17 years. Honest hard working supplier that I am very commited to because he will go out of his way to help the cleaner. So if Pro-chem told him to f off I will tell prochem to f off. There are too many options left in this industry to let a company dictate who is worthy of selling their supplies. On a side note the supplier 60 miles away is on my boycott list also. I was at their company bbq 2 years ago. You know the one where the supplier is supposed to put their best foot forward. A warehouse was open with several truckmounts for sell. I asked an employee about a machine and price. He said would get the manager. I was poking around the machine and the manager walked in. He looked at me and said "what are you doing" "get away from there" With a look like I was a hobo or something. I was looking for another machine but don't like some stupid manager talking down to me like I am a piece of crap. So sorry, boycotting them and prochem. I am loyal to companies that treat me good and will badmouth the companies that don't realize where their income really comes from. There is not more to the story, Proline is big, this guy is small, proline complained prochem canceled the vendor agreement. Prochem... Its not waving if I only have one finger up.