The end of a decade has hit us! Can you believe it? I am still writing 2019 on all my checks. Yes, young folks, I still write checks. I also have an AOL account. Resin dropped unexpectedly in December. It took a lot of folks by surprise. Then we had some of the hostilities in the middle east causing energy and the chemical sectors to surge only to come back down again, pretty much like the hopes and aspirations of all those Patriots fans as they watched their geriatric QB continue to look befuddled as if he was saying over and over again, “they are so fast!”.
So prediction time – just to let you know, I am not a licensed psychologist nor a counselor, so the views by me for me are not necessarily those of this broadcast. I think pricing will be flat. Expect more of a push to make the prices move higher as this winter ends and spring starts to peek its head out from the horizon.
I hung up with a paper broker for outside liner who told me last week he had plenty of supply and now it’s all gone. He told me in his southern drawl, “you just weren’t fast enough on the draw”. I told him that we have this thing called a process and everything has to be ordered with a PO or we may lose track of important things like paying his bill. “Well, your friend Darrell gave me a verbal PO”.
So, we spin again on the merry go round with Darrell and his other brother Darrell just as the market on paper is spinning. Not much to write about but to tell you that over and over again, people want to sell me. They want to sell me really bad. But, when it comes to getting me intrigued by offering me price deviations, well, they can’t do that. It’s like that old Meatloaf song, “I would do anything for love, but I won’t do that…” That by the way in the world of paper is deviating on pricing.
I am what you might call an old stretch veteran. I remember when stretch film was color-coded so you would know what gauge it is. I remember when a popular oil company actually was the #1 film in the world with a slogan, “the big red O gets it there”. I have seen the world of 2 pounds for a dollar, the dwindling down of over 20 manufacturers down to an industry dominated by so few large soulless enterprises.
Now as we roll into 2020, where are we today? One thing I missed and I am sure you all feel the same way, was that feeling of being “SPECIAL” to a vendor. They still tell me I’m special, but it’s the equivalent of someone telling me I’m not getting grey or that my fat doesn’t make me look fat! It’s the normal flattery as I look at the corner of my eye for a bolt of lightning to strike them down. The world is awash with overcapacity both in resin and in machinery. This has brought us to a grim realization. We have zero loyalty from any of our film vendors today. Having some expertise in selling film, to investing in a service department and having a highly trained sales force reverts to basically a checklist of the following two criteria to get credit set up with the other guys:
A PULSE _____
A CHECKBOOK ____
The difference between someone buying truckloads versus as I used to say, TRUNK-LOADS is evaporating in thin air. The spread as we would call it, that pricing that made someone who bought 5 skids versus 5 trucks is becoming replaced by some type of eBay model where mills are bidding on how low they can go. It’s the fault of these captains of industries who are out for one thing, pounds. When I was a young man working for one of these companies, I was told that the machine only knows one thing, “It’s hungry and it must eat! The appetite is insatiable and is 24 hours a day, 7 days a week. It cares little about what that price per pound is, so long as it’s fed.
“It’s just business, Ron”, I tire of hearing this every time I ask, “what is going on? why are they eroding my margin by setting up everyone?” We used to mean something to vendors but as we continue to fight for market space, the vendors continue to sell everyone with, remember, the above criteria. They used to have discipline and were content in making deep partnerships with their distributors and would defend them until the end. Now, that is pushed aside because their master’s have become those heartless and fleckless machines pushing them to bring them more food.
I want to feel special again. I want to stop being boring and being told to sell the same ole’ stuff that everyone else has. Anyone who calls these manufacturers will get the line. “You can buy it if you have a pulse and a checkbook”. I joke that the college I went to if you could spell your name correctly, you were accepted. The acceptance rate for your credit application to these firms is almost 100%. So, even though it took me seven years to get out of community college, I am smart enough to know that if I have a line of film, soon, every competitor will have the same line.
Alliance Plastics is changing the game again, not only with our new product line, STEELFLEX XTREME 2.0, but with all our product lines. When we introduced EdgeGuard DX, we changed the world in corner protection. When we introduced our superior lines of Airforce Max and Airforce Lite, we overwhelmed the vented film world with innovation. We also plan on bringing loyalty back to this world, which is why I am creating the ELITE ALLIANCE program. Simply put, we are offering regionally to those lucky members who sign up, 15% savings from anyone else we sell in any given area. You will have an exclusive at this pricing level. Imagine buying the world’s best films and getting a discount from this and all our value-added product offerings, over and beyond anyone else in your market. This program will only be available to a select few. It’s time to jump on board. Together, we will be elite and all the competition will wonder how to fight us.
Stop being told you are special when you are not treated that way. We all know that feeling when we lose an account to someone who doesn’t buy nearly as much in volume as we do the competitor who didn’t go out there and conduct the stretch testing we did. When the only weapon our competition has is to pick up the phone to get exactly what we are buying from your current vendor and your vendor allows this tactic to work. You can’t allow everyone to be set up to only have the very same thing you thought you had an advantage on, that product line that made you “SPECIAL” be constantly used against you. Bring something to the market that’s a super weapon with another equally powerful weapon called loyalty. No one will be able to match you and we will be there as your partner to support you. With us by your side, imagine what we can do together. You will find no better partner than Alliance Plastics.
Ron Grubbs, Jr.