Last month I shared my surprise and frustration at the lack of stone industry standards. You read as I lamented about the lack of accepted tests regarding tools and supplies in our industry – especially diamond tooling.     

This was not acceptable to me. That’s why I searched for another way to research the market place. And again, I was caught by surprise. You see, I discovered through my extensive research that the best-known brands in the stone industry, the brands that were supported by the largest advertising budgets, were not actually manufacturers of the products. Instead, the best-known brands were either store brands such as Viper® from Braxton-Bragg or The Pro Series from GranQuartz. Or they were brands created by importers. It’s very much like when Publix, Kroger, Safeway, Wal-Mart, Target or Costco (or whoever your local grocer happens to be) sells their “Private Label” brand.

However, in the stone industry the BIGGEST brands were the private label brands – NOT the manufacturer brands. In the rest of the distribution world the model is much different. In most industries, the manufacturer’s brand (think Charmin by Proctor & Gamble) is the largest brand in the marketplace. Yet in the stone industry, this just isn’t so.

How is this possible?

Simple. Large distributors are able to purchase directly from the manufacturers, who are for the most part foreign. The foreign manufacturer is happy to put any brand on the product as long as purchase quantities are high enough and the bills are paid. Plus, it takes the pressure off manufacturers since they don’t have their own name on the product. At the same time, and to make things a bit more complicated, importers are often purchasing from the same factories as the distributors and then offering their “brand” to the distributors for sale.

So instead of one efficient retail model of:

Manufacturer > Retailer > End Customer

You have three competing models of:

Manufacturer > Retailer > End user, and 

Manufacturer > Importer > Retailer selling importer brand > End user, and also

Manufacturer > Importer > Retailer selling the retailer’s brand > End user.

Nearly every day we are asked by importers to sell products that we are already buying directly from the manufacturer. We’ve also discovered in our research of the industry that importers are doing local silkscreen printing and hot stamping to provide private label products to small distributors. In other words, anyone and everyone can have as many brands as they want without the work or the investment necessary to actually manufacture a product.  

Needless to say, it is a very confusing market and it is very difficult for the end user to figure out which products offer value and which are just hype. Now, you might think that price is a somewhat reliable indicator of product quality. Not always so. And here’s why…

The addition of importers, added cost layers, and multiple profit layers, make it impossible for the customer to rely on price alone for making decisions. The flip side of the coin is that the existence of importer brands is seen as a good thing by some large distributors. 

Why? Because the importer creates an artificially high price for products and allows the distributor to offer products of equal quality at a lower price while making more margin.  However, these importers are also seen as a bad thing in that they provide product to small distributors and vans that are not capable of buying large enough volumes to go directly to the manufacturers.

Personally, I’m neither threatened nor discouraged by these added layers. There is nothing “wrong” with this environment, except that it cannot last. Middlemen always get squeezed out.  The efficient will always drive out the inefficient over time.  

But my quest is not over. I had learned that you could not count on laboratory testing. I also learned that “Brands” in our industry often don’t mean what you might think they mean – after all, the manufacturer had no real skin in the game since his name wasn’t on most of the products.  

But there is still one more method to explore. I will outline the results of what I discovered next month. I’ll also reveal an important announcement. An announcement brought about by all this research. An announcement that directly affects you as a buyer in the stone industry. 

Have a good read.

Rich Hassert

Email responses to: publisher@slipperyrockgazette.net