Affiliated Distributors (AD) is the largest contractor and industrial products wholesale buying group in North America, operating in 3 countries, the U.S., Canada and Mexico, and nine industries including bearings & power transmission, decorative brands, electrical, gypsum supply, HVAC, industrial, plumbing, pipe, valves & fittings, and safety.
AD’s mission is to bring together growth-oriented distributors with best-in-class suppliers to leverage the distributors’ combined buying power, outperform the market, and stay ahead of larger competitors.
With a membership of over 850 distributors generating more than $45bn in annual sales, the group has the major task of negotiating, calculating, paying, and reporting on rebates due from its 800+ suppliers to individual members.
The challenges that led AD to look for a rebate management solution
With thousands of individual rebate elements to manage—from product-specific incentives to volume-based rebate—ensuring every member receives the right rebate at the right time is a highly complex task.
The challenge has been compounded by the fact that, since 2010, AD has grown at a rate far outstripping U.S. GDP—adding new distributor groups in Mexico and Canada, and creating new divisions including Decorative Brands and Bearings and Power Transmission.
A small team with a massive responsibility
In 2013, responsibility for calculating and paying member rebates lay with AD’s divisional operations (DivOps) team, which consisted of just four people. This team managed the relationship with all of the group’s supplier partners—tracking, claiming and collecting rebate from them to distribute to AD’s members.
This involved setting up each individual agreement in Excel and collecting each distributor’s purchases figures in order to calculate rebate due in from the supplier and out to the distributor. This information was then manually inputted into AD’s Lawson (now Infor) financial management software.
By 2013, this manual approach was no longer viable. If the group was to continue to grow, it needed an automated rebate management solution that could scale as the group’s membership and supplier base continued to expand.
Choosing Enable to revolutionize their rebate management
After comparing multiple software vendors, AD chose to implement Enable’s cloud-based rebate management platform to automate its rebate management processes. AD worked with Enable to configure the platform and the buying group went live with the platform in 2014.
Enable stood out to AD because of their ability to customize and enhance the product to meet their business needs. AD had many complex deal structures with many components that could go into a rebate calculation and Enable was able to accommodate those. The custom branded Supplier Portal also added value as AD could now receive data consistently across all suppliers.
Throughout the implementation and configuration process, AD was able to work with the same analysts through the whole build process. This allowed them to build relationships and Enable could understand our business model much better than if several different resources were rolling on and off throughout the build and implementation.
How does AD use Enable today?
Today, AD uses Enable to negotiate, calculate, pay and report on supplier rebates totaling hundreds of millions of dollars annually. Their data is organized in a centralized database, which allows them to perform analysis on trended purchases, deal comparison, rebate review etc. without the use of word, excel of PDF documents.
Enable has allowed AD to transform its approach to rebate management with features including:
– Supplier portal enabling suppliers to submit monthly sales rebate information detailing purchases from AD’s members
– Automatic calculation of rebate revenue due to AD members at specific payment milestones
– Approval workflow for staff with review and approval processes for member rebate calculations
– Integration with Infor for reconciling supplier rebate receipts and compiling into payments to members
– Integration with Oracle Business Intelligence, for analysis and reporting on distributor purchases and rebate earnings as part of AD’s wider financial analysis and reporting activity
A rebate management system that supports further growth
By automating processes that were previously manual, Enable has allowed AD’s team to focus on more strategic activities. Due to AD’s substantial growth since 2013, the DivOps team became the Financial Programs team and now consists of 6 associates dedicated to developing closer relationships with supplier partners.
It has also empowered AD to grow without adding admin headcount or incurring higher admin costs, allowing the group to maintain its record of returning 100% of rebate to its members. With Enable in place to automate rebate management, AD has been able to scale from $31bn to $45bn in collective revenue while remaining operationally efficient.
In 2019, AD renewed its Enable subscription for another three years, ensuring the group’s rebate management processes can continue to scale to support AD’s further growth.