Starnet started with a simple idea: to build a collaborative network of the best professional flooring contractors in North America. The rallying idea was always to enable other businesses to thrive. These ‘other businesses’ include end users and all of the stakeholders linked in the effort to execute the finest interior spaces in the world. Starnet members activate connections across the industry with scale. They act as the conduit between the vision of creative professionals in manufacturing and interior design and the reality of what it takes to perform on schedule to a budget. Included in the other businesses, but often overlooked, is the supportive network of wholesale distribution companies supporting the Starnet cooperative. Distribution works closely with the professional flooring contractors that make up the Starnet cooperative to move the industry forward in brave and interesting new ways.
Much like the evolution of the trade from carpet workrooms and tile shops to the multi-surface and multi-service Starnet professional flooring contractors of today, wholesale distribution has continued to evolve and improve. The industry has been predicting the demise of wholesale distribution for a few decades, but like most entrepreneurs, they continue to adapt and evolve to meet the industry challenges. There are many regional distributors that are now much larger than the manufacturers who served the network only a decade ago. The wholesale distributors are an important part of the network of relationships and capabilities Starnet members rely on to enhance their business and bring flexibility in their approach to the market.
Evaluate, Introduce and Promote New Products Together
The flooring industry is starved for revolutionary product innovation. Incumbents protect the standard specifications and much of the annual development is related to styling or internal cost control effort. The predictable series of manufacturer product launches timed through the year generally keep programs visually refreshed, adjust for regulatory compliance related to raw materials, or reduce the inputs necessary to produce each finished unit. That effort benefits the industry and keeps it stable, but it does not excite the imagination of the stakeholders to expand demand for commercial flooring.
Distribution has been the most disruptive force in the industry over the last few decades. To continue to provide value, distributors scour the world for new products and innovative companies that will allow them to break through the incumbent flooring manufacturers hold on the status quo. When they find potential innovation, they immediately pivot to share their discoveries with designers and the professional flooring contractors associated with Starnet. Some recent examples include rigid core products, loose lay LVT, sound and moisture managing underlayment, alternative chemistry polymer sheet, and new compounds replacing traditional Portland based subfloor preparation.
This effort by distribution is healthy for the industry. Distributors balance the need to be innovative and disruptive with the products they represent. They must manage reputational risk and the financial risk associated with bringing these disruptive products to market. The Starnet members count on their relationship with distributors to manage the collective responsibility of bringing true innovation to the marketplace. New products require collaborative effort with all stakeholders. No manufacturer can possibly think through the series of downstream channel concerns required to have a successful product launch and market scale. The complexities of packaging and logistics alone require this collaborative effort between all stakeholders. Distribution plays a vital role and enables the ongoing success of Starnet.
“We are constantly searching for innovation in products. The quality of our people and the depth of our relationships allow us represent product lines that may not fit a traditional distributor model. We often pioneer products that most companies won’t take on because they can’t tell that story. We connect end users looking for innovation with our best Starnet partners. There is a level of trust between Spartan Surfaces and the membership at Starnet. We work together to expand opportunity, not just take a cut from what is already there. We have relationships with developers and designers that are always looking for innovation. They trust our brand to resolve the risk and allow them to confidently plan projects with millions at stake. We take that seriously, but we do not think it serves the market to recycle old solutions with new colors. We take the role of disruptor – positive disruptor!”
– Kevin Jablon, president and CEO, Spartan Surfaces.
Link Multiple Manufacturers for Value Added Project Execution
Another role distribution plays in the market is to collect a diverse group of manufacturers and manage access to those capabilities. There used to be very clear models around distribution offerings. Full line distributors associated with an anchor resilient brand; supply distributors that served the installers with tools, adhesives, and accessories; tile distributors that focused on ceramic, stone, and related tools and setting materials. In the 1990’s another distribution model emerged which was a hybrid between the full line and supply distribution models. Many of the largest and most successful distributors in the North America today are evolutions of that hybrid model.
Starnet members depend on those partnerships with the hybrid model distributors for daily use items like adhesives and tools as well as specified product systems related to subfloor preparation and finished flooring products. The bulk of Starnet member purchases flow through these significant organizations, and they play a key role in driving regional trends in product usage. In addition, the distributors enhance the capabilities of both the Starnet members and the manufacturers. It is still true, after many decades, that major product categories such as resilient sheet material and extruded accessories cannot be shipped common carrier logistics without damage or destruction. Those products must be handled by the manufacturer logistics employees or through experienced distributors that understand how to protect and manage these flooring materials.
That is only one example (astounding as it is) of the value experienced distributors bring to assembling and managing different flooring product types and get them to a Starnet member’s truck dock. From there, the professional flooring contractor has additional challenges to navigate. This article could go on unnecessarily describing the massive challenge Starnet members have getting 48” wide pallets of material through 42” doorways. Starnet members benefit every day from the enhanced services provided by distribution managing multiple product types and servicing logistics, inventory, technical support, pricing, credit, and product knowledge requirements.
“The size and scale of projects Starnet member companies take on commonly exposes the gaps between the practical requirements of the job site and what appears in the specifications. Each Starnet member has to make some decisions to execute the projects, or they would be paralyzed by the lack of detail. Every member knows that if something goes wrong on the job we will be held responsible. Our goal at Fishman Flooring Solutions for these projects is to collect the best capabilities in our manufacturer portfolio and make sure there are no conflicts in the system. Most of the warranties are limited, and the limitations often refer directly to conditions that must be resolved by another product or managed site conditions. What we do is build enough levels of assurance in product systems that our Starnet professional flooring contractors can actually perform the work. They partner with us to reduce risk as much as possible. The professional risk Starnet members face every day is something we at Fishman Flooring Solutions respect and admire. Our job is to help them navigate those challenges with solutions that make sense.”
– Rob Hoffman, regional sales leader, Fishman Flooring Solutions.
Big Data Supporting Practical Scale
One of the challenges the commercial flooring contractors have faced over the years is the lack of industry standards related to day to day standard operating procedures. The bidding market continues to evolve, but some of the promises related to digitalization and document management continue to underwhelm. Despite the past, the future is bright. There are some significant advances related to technology associated with submittals and close out documents, as well as standards related to safety and materials management.
We have a long way to go as an industry, but Starnet members continue to search for rally points. The rally points of interest focus the enthusiasm of the cooperative to benefit the industry. Sales metrics, well managed by other industries such as grocers and hardware groups, continue to generate enthusiasm. Starnet members surpass $3 Billion in total sales across all products and services offered. Despite that massive scale, the coop continues to work with incomplete purchase data and long-term history. Although the numbers are directionally accurate, the coop is beginning to see real progress in partnering with distribution partners to manage purchase data to enhance insight and make partnerships more effective.
A false narrative from the past was that unless products were purchased directly, purchase data would always be late, inaccurate, or incomplete. The “distributor is the problem” was an urban myth that was pervasive in the industry. The bulk of Starnet member purchases flow through distribution, and many of the sophisticated organizations regularly provide members with business intelligence and purchase trends that benefit their companies. In addition, Starnet is uncovering significant trends in our member purchase patterns related to regional and super regional distribution.
“Our experience as the largest paint sundry supplier under the Lancaster brand has informed our entry into the flooring distribution business with E.J. Welch Company. We see data management related to an endless number of SKU’s across our entire offering has great value. We can help to provide our Starnet member customers excellent visibility on their business as well as a bridge to other opportunities in interior contracting. The synergies we have seen in our business across paint sundries and flooring foreshadow the ongoing evolution of the industry. We are well positioned to continue to be part of the value chain between the manufacturers and the outstanding work in the field performed by professional contractors. The commercial interiors business continues to be a vibrant and entrepreneurial market with a great balance between companies of significant scale in each part of the value chain. We believe that there will continue to be excellent partnering opportunities between national and regional distribution in support of cooperative organizations like Starnet. Our goal is to use our broad offering supported by high level analytics to continue to add value beyond product.”
– Mitch Jolley, CEO, Merit Distribution Group.
The Starnet cooperative continues to partner with manufacturers and their channel partners in distribution to serve the marketplace. Each part of the channel continues to find ways to work together and enable other businesses to thrive.