Orgill show: Private label and brands can live together

CHICAGO —When Willie Hudson, owner of Mineral Wells Hardware & Rental in Mineral Wells, Texas, attended the Orgill fall market earlier this month in Chicago, he devoted about 40 percent of his market purchases to globally sourced products. This was a 20 percent increase over 2007 and an indication that these products are going over well with his customers.

“The price and selection have been good. The quality has been good,” Hudson said. “It supplements the brands we have very well and increases the bottom line margin. People are looking for brands, but people also have budgets.”

William Millar, manager of D. D. McColl, a 30,000-square-foot Orgill store in Saint Pauls, N.C., said private labels now make up about 25 percent of his product mix. “I buy more every year,” he said as he browsed the 28,000 square feet of imported products at the market, held at McCormick Place Aug. 14 to 16. “The margins are higher, and it allows me to be more competitive with big-box stores. And fewer people are set on brand. They want the best price and a decent quality product.”

Orgill’s global sourcing department has been growing steadily each year, going from about 1,000 products in 2001 to 7,000 skus at this market. But while imports are an important and growing part of Orgill’s business, the Memphis, Tenn.-based distributor is first and foremost about brands, said president and CEO Ron Beal.

“These globally sourced products are complementary from a price point standpoint, but we have not made an effort to replace categories of products with private labels because brand names are important,” he said. “Almost with out exception, where we have a worldwide sourced line, we have a brand name alternative.”

According to Gary Clayton, owner of Jamesburg Hardware in Jamesburg, N.J., brand names are more important in some categories than others. For example, when he switched from GE light bulbs to Sylvania a couple of years ago, his customers didn’t flinch. But in the area of appliances, Jamesburg shoppers prefer the GE Monogram series; in grills, they prefer Weber; and in tools, Makita, DeWalt and other national brands.

Timm Dillon, owner of the Hardware Store in Sparta, N.J., a greed that it’s important to pick your spots when bringing in private labels. “if it’s a generic item, we use it,” he said, pointing to product categories like chisels, sockets and wrenches. “Nobody really knows who makes these products, so they’re more likely to shop price. And the margins are better, so you can make more money on them.”

According to Jim Wilson, Orgill’s vp-worldwide sourcing, the program has grown based on customer demand for value-priced products across categories. In the area of decorative hardware, Orgill’s Mintcraft Signature series has been expanded to include not only a range of faucets, but towel rings, towel bars, doorknobs, hinges and other products. It continues to add alternatives, including polished brass, satin nickel and oil-rubbed bronze.

“Our customers understand the opportunity for them to be more competitive and make better margins,” he said. “When products are manufactured outside the United States, we cut out the middle man and cut the process down, which affords our retailers the opportunity to compete with the big boxes.”

New at this market was an expanded outdoor furniture program through which Orgill customers commit to a certain number of orders for next spring, allowing the sourcing department to bring in containers of products at a reduced cost and compete with larger retailers.