International Markets Group: Straight From the Source's Mouth

Distributors at NBMDA's annual convention last year in Dallas may have noticed some new faces in the crowd. Among them were Don Carlson and two additional members of International Markets Group (IMG), a global sourcing company that specializes in matching clients up with qualified and quality offshore sources of supply — namely in the Pacific Rim. While IMG's customers cover a broad range of industries, regional hardware distributors are an integral part of its business.

Unlike many companies that supply distributors — typically by importing product, delivering it to their warehouse, and then re-distributing it — IMG identifies an appropriate factory or manufacturer in Asia for a specific item that the customer wants and then manages the complete supply chain by working with its factories and arranging the cargo shipments from the source directly to the customer's door. The service includes satisfying all of the customs requirements and any other port obligations necessary for bringing in a variety of high quality/high demand hardware products from the Pacific Rim. Because the product does not have to navigate multiple layers of distribution as part of the procurement process before being shipped to its destination, this is the most efficient freight method for both cost and time. In addition to the savings driven by logistics, the Carlsons say that putting clients in direct contact with offshore suppliers lowers the cost of the product in question and generates higher margin structures for the company purchasing it. "We're providing our customers much greater savings on the items that they're buying compared to what they have typically been purchasing them in the past from domestic suppliers," explains Don, who founded IMG. "We're able to save them money, increase their profit margins, and help them to be much more competitive in their region so that they, too, are in a healthy and growing position. So we sell margins, that's what we do." 

And once the value of direct sourcing becomes apparent with a particular product for a customer, Chris – vice president of sales and marketing at IMG — says the customer often then approaches IMG about researching other products. "That leads to additional business and additional savings to our customers on high-volume items that they know they will move large quantities of on a yearly basis."

Within the distribution channel, Don concedes, many large kitchen cabinet and furniture OEMs conduct much of their direct buying independently; so IMG does not do as much business with firms in that segment. However, he continues, "there are a lot of distributors that don't, and we're able to provide that service and be very successful." Specifically, IMG focuses on regional distributors that lack extensive experience in doing direct international business on their own. They are able to help these firms, in particular, to save money and operate more competitively thanks to IMG’s longevity in the hardware business — dating back more than 35 years ago to Don's early days in the international sourcing industry, when his company TFI Corporation started importing with his first customer, Fleetwood Enterprises, to order multiple components for recreational vehicles. "Our company has a lot of relationships with manufacturers that we have a long history with," Don says proudly. "And we have customers in the industry, on the receiving end, that we've known and done business with for a long time. So there's a long history with a lot of experience on both sides of the ocean."

IMG also boasts a great deal of expertise in the geographic region from which it sources hardware products on behalf of distribution customers. That, according to Don, means that although the company is based on the West Coast, it has "boots on the ground" in Asia, including its China sourcing manager and quality control inspectors living and working full-time there. The focus on the Pacific Rim, like the strong presence in the hardware distribution channel, also harkens back to his history with Fleetwood, when he noticed that so many cartons in the warehouse were marked "Made in Taiwan." Don has built his business from its Asian roots since then — first as TFI and now, under, the IMG brand — undeterred and unaffected by the stigma that sometimes — and unfairly, if you ask the Carlsons – is attached to products coming out of the region. "A lot of the items that distributors are buying come from Europe, and they're very qualified and capable companies; but there are a lot of Asian manufacturers that make products that are similar and that are also high quality," Don remarks. Moreover, he adds, many of IMG's distributor clients cater to customers who want products from both ends of the price spectrum. "A lot of the distributors carry a higher end and a lower end because, in their market, some of the customers only want the upscale product and some can accept a lower-cost version," Don says, emphasizing that lower cost does not equate to lower quality but simply means a comparable product at a lower price point. 

Whatever the product, both father and son agree that one of the biggest challenges facing distributors is avoiding a tug-of-war competition with other distribution firms or the manufacturers directly in their territory for the exact same item. Some suppliers "overpopulate" a region with distribution, causing conflict among the firms in that area and squeezing their margins. "In terms of the industry's biggest challenges," Chris says, "we hear consistently that distributors are finding more and more often that their existing product suppliers are not fully loyal to them." The execs say IMG is somewhat unique in that it actively tries to avoid that kind of turmoil by forging exclusive regional relationships when possible, although some crossover is inevitable. "It gives the distributor more control of the different product lines that they are selling in their region," Chris elaborates, "because when their current supplier is aligned with other customers in their market, it becomes competition to them. With IMG, we give them exclusivity to product lines in maybe two, three, or four surrounding states that they cover; and then they control that market. It puts them in a better position overall because they are working through IMG and they are able to go manufacturer direct."

Also instrumental to nurturing IMG's relationships with distributors is the company's recent addition to the NBMDA membership roster. It took only one trip to the association's yearly convention to convince IMG's principals that joining was to their advantage. Don was especially impressed by the spirit of camaraderie at the event as well as the intimate setting and quality face time with existing and new distribution customers. "There's a lot of sharing between distributors, and we're growing because of that. The relationships that exist amongst these distributors, networking with each other has led to additional customers for IMG. NBMDA is a great environment for that," he says, lauding the annual show. 

The Carlsons welcome future opportunities to network with distributors, which they believe can benefit from their service in a variety of ways. "A distributor has to be well-sourced, meaning it has to have good-quality products at excellent pricing in order to be successful," Don comments. "What we do is provide that service with manufacturers in the Pacific Rim. Our skill set is our expertise and experience in doing business in that part of the world for as many years as we have and the ability to vet out good, qualified factories for our distribution partners. We're good at it, and if this interests you, come and talk to Chris or myself about your business as we hope to grow our distribution network at the NBMDA Convention in Orlando this year."

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