With every merchant buying group designed to enable businesses to perform to a level greater than the sum of its parts, democracy will often be positioned as a key feature. Yet when the aim is to maximise their Partners’ profitability, make decisions on Supplier deals and recruit qualified merchants, these will generally need to be made swiftly. This month, BMN spoke to the directors of three independents which have recently joined National Buying Group (NBG), to find out what buying group democracy really looks like on a day-to-day basis.

This year may have been a year of change for many merchants but for three independents in particular, 2023 will be remembered as the year they joined a new buying group.

Adrian Shelley, Managing Director at Henshaws Roofing & Building Supplies in Greater Manchester; Ash Hunt, Sales Office Manager at Northamptonshire-based LMR Building Supplies; and Scott Aldridge, Director at Woodstock Plumbing & Heating in Hampshire may have each had their own reasons for wanting to join NBG, but underpinning each of their motives was a desire to be part of a collaborative network capable of solving key challenges in a democratic way. But how exactly has that democracy played out day-to-day?

For Adrian, democracy goes hand-in-hand with openness and honesty, but also takes a lot of commitment and hard work. “I made the decision to move to NBG from another buying group, largely because I felt I wanted to be actively involved in the decisions that would affect my business just as much as they might affect some of the bigger players within the Group,” said Adrian.

He continued: “Before I joined, I was told the Group is very involved and that there is an expectation that Partners play their part in Category Management Teams and the various working groups which are in place to solve specific business challenges. Even despite that forewarning, the increased volume of emails, meetings and calls still surprised me, but that for me is a mark of how involved, accountable, and supportive every Partner – new and longstanding – is expected to be. The level of involvement from the central team only serves to enhance that by handling a lot of administrative work so we can apply our skills to strengthen deals.”

For Scott, that context was quite different. No prior experience of being part of a buying group meant that, by Scott’s own admission, certain preconceptions had to be challenged after something of a leap of faith. “We actually had to overcome quite a lot of scepticism during our discussions with NBG prior to joining the group in that we were worried about how insular and self-serving a buying group might prove to be,” said Scott. “Ultimately though, we’d seen very little strategic change within our business for years under its previous ownership and knew we needed to change to ensure we were no longer a little island.

“I know it’s a cliché, but we really haven’t looked back since, and that’s largely down to the volume of information that gets shared via the online Hub, the Category Management Teams and even the WhatsApp group we’re all part of. It actually feels like we’ve expanded our business without having to give away any of its ownership, which has been a real plus.”

Setting the tone quickly

For Ash, the instant embracing of new Partners’ views and insights was felt immediately as the team at LMR realised the opportunity they had to bring some of their own Supplier deals to the table. “While we were already a member of a buying group, we felt joining NBG was more aligned with our growth plans. We also held a belief that we might be able to add some value at Category Management level,” Ash said. “It wasn’t long before we realised one of our block paving deals was more competitive than the existing NBG deal, so worked with the team and the Supplier in question to bring that into the group. Everyone recognises the need to support the Supplier deals that are in place, so we’re all working for the benefit of each other.”

The speed at which new Partners are welcomed to the Group and invited to share their opinions is also an important exercise in setting the tone for those new additions. According to Adrian, that tone can be set within a matter of a few hours: “By pure coincidence, the day we joined NBG was also the day of a Roofing and Insulation Category Management Team meeting. I’d only been a Partner for a matter of hours when I was sat in a meeting being asked for my views on the category, my opinion on some of the Supplier deals in place, and whether there were certain projects or tasks I could lend a hand to. The approach couldn’t be much more collaborative and made it immediately clear to me that every single voice is listened to. Granted, there are, and will continue to be, times when disagreements will happen, but the fact remains that everybody is given the space and respect to air their views.”

Data-led decisions

Independents are generally known for being lean businesses without the spare time to explore new systems or technology investments, so joining a buying group has also been known to improve these merchants’ access to critical Supplier data, housed in a convenient location. Adrian comments: “Arguably one of the main benefits of joining a buying group is the sheer scale of the data you can access from across that network. The NBG Hub is more advanced in terms of functionality and the provision of key information than anything I’ve come across previously. While this might not be something I’d have naturally associated with democracy within a buying group, the way this enables each Partner to make astute business decisions based on the wealth of data they have access to is really empowering.”

NBG’s ongoing investment in technology has also seen its Product Information Management (PIM) system develop into an important tool Suppliers can use to ensure their products are available to view and be sold correctly at the trade counter, with Partners benefiting from up-to-the-minute pricing and product information.

Adrian’s view is echoed by Scott, who sees transparency around that business-critical data as a powerful asset for business development. Scott continues: “For me, democracy is synonymous with transparency and that’s exactly what I see most days. Early notifications of Supplier price changes has minimised the risk of my margins slipping, while visibility of other merchants’ spend with certain Suppliers has led to conversations around what we could do differently to experience similar levels of growth. It has all really eased my workload. And that’s before we consider the data used to inform decisions made by each Category Management Team.”

Mentorship that matters

“As a business joining a buying group, you have to be comfortable with the idea that there are likely to be others who know a lot more about certain product categories, Supplier agreements, or even technical challenges than you do,” says Ash. “Buddy schemes like the one we were set up with when we first joined NBG can be a really useful way of quickly learning whose knowledge can be tapped into for what. In our case, Tim Jerrard Dinn, one of the directors at County Building Supplies, was instrumental in introducing us to Wienerberger, which allowed us to get an account with them much more easily than it might have been otherwise. Similarly, Bob Fleetwood, Purchasing Director at Kellaway Building Supplies has been a great mentor for us and has really aided our understanding of cement deal negotiations.”

Scott is another advocate of that support network that such a democratic structure lends itself to, with something as basic as an active and inclusive WhatsApp group having proven to be an invaluable resource. “I probably ask a question within the WhatsApp group three or four times a week,” Scott says. “The group is a constant source of best practice and information sharing where you can get answers to a question or a second opinion on a decision within minutes, if not seconds, and nobody thinks twice about helping one of their peers. As the director of a business which had flown solo for so long, that extra support has genuinely been transformative.”

The difference is in the ‘how’

So how exactly does that democracy lend itself to buying better? As Adrian testifies, better buying isn’t simply a case of which deals can be struck, but how business is conducted. Adrian concludes: “For me, switching from one buying group to another wasn’t a decision driven by a desperate need to make a lot more money or to transform the profitability of my business. I knew there was a good chance that the deals in place with one buying group would be similar to those with the next, save for a few subtle differences. Where the real difference is made is in the ‘how’ business is conducted collaboratively across the network, which is generally a philosophy driven down from the board. Putting it simply, it creates a healthy environment in which we can all conduct business.”