The Company

Hardlines Distribution Alliance (HDA) was established in October 2021 to provide management services for the merger of two other buying groups. HDA owns a company called PRO Group, which operates as a buying group. At the same time, Distribution America, a competitor in the same space, was looking for management support as their CEO was retiring. This led to the creation of HDA as an alliance and partnership between the two entities.  

HDA now manages the buying group activities for the former Pro Group members and former Distribution America members. The alliance includes approximately 80 members, with over $7 billion in annual purchasing power. In addition to managing buying group activities, HDA offers advertising services, organizes two large industry conferences annually, and negotiates rebate and incentive programs for its members.

As part of their overall incentive structure, HDA's incentives include key categories such as rebates, growth programs, and other incentives  

HDA is responsible for negotiating programs with suppliers, including various incentives tied to those programs. The organization operates a central pay system where members upload invoices, which HDA consolidates into a single payment for each supplier. “When members participate in our central pay system, we can deduct any earned incentives directly from the invoice before processing payment,” explains Heidi Wodark, CFO of HDA. For members not using the central pay system, HDA relies on suppliers to provide purchase data and the related earned incentives. Suppliers then submit payments to HDA, which tracks those incentives on behalf of its members.

“When HDA negotiates new programs, the focus is on identifying suppliers and products that members would be interested in stocking, benefiting everyone involved,” says Wodark. “By securing valuable supplier programs and new products that members are likely to purchase, they can earn incentives on those products. As HDA sometimes receives a portion of these incentives, we also stand to gain. Our goal is always to find programs that align with the products our members want to stock, ensuring mutual benefit for everyone.”

The Challenge

Outdated Legacy System

According to Wodark, HDA faced significant challenges with their previous rebate management system before transitioning to Enable. "Our previous system was quite sophisticated and met our needs for rebate tracking," Wodark explains. "However, it was built on outdated technology." One of the biggest hurdles HDA encountered when taking over Distribution America's activities was managing variable rebates. Pro Group had always dealt with consistent rebates across all members, but Distribution America had around 30 programs with variable rebates, which HDA's legacy system was not equipped to handle. This lack of flexibility in managing diverse rebate structures highlighted the need for a more advanced solution.

Continuous Discrepancies

One of HDA's biggest challenges is ensuring that suppliers understand the distinction between members who participate in Central Pay and those who do not. “Suppliers need to report for members who are not in the Central Pay system, but this process is often manual and not conducted in a timely manner,” says Wodark. This can lead to complications such as double dipping. “For example, a supplier might report on a member thinking they are not part of Central Pay when, in fact, they are,” Wodark explains. “As a result, we deduct the incentives for that member, only to discover later that the supplier has also reported on the same incentives, creating discrepancies.”

Outdated Forms

Wodark notes, “The only accuracy issues we face tend to arise when a supplier uses an outdated form that lacks a current list of all our members.” This situation can create complications, as the supplier may inadvertently misreport information or fail to recognize specific members' eligibility for rebates or incentives. “When the documentation isn't up to date, it can lead to discrepancies in the tracking and reporting of rebates, which affects our members' ability to maximize their benefits,” she explains.

The Software

Bespoke vs Enable

When comparing a bespoke system to Enable, one of the standout advantages for HDA was the ability to implement an off-the-shelf solution rather than having to develop something from scratch. “The fact that we didn’t have to create a custom system ourselves was a significant factor,” Wodark explains. “Enable seemed to offer everything we needed without the lengthy development process.”

Initially, HDA considered going down the bespoke route, but the timeline constraints made that option less feasible. “Developing a custom solution would have taken considerably more time and resources, which we simply couldn’t afford,” she adds. Choosing Enable allowed HDA to quickly and effectively address their needs without the delays typically associated with custom development, ensuring a smooth transition and implementation.

Comprehensive Solution

Wodark explains, “Our legacy system lacked the capability to track variable rebates, and it also didn’t provide a means to manage defective allowances, Member co-op, or advertising. This meant we would have had to develop all those functionalities from scratch.” The absence of these essential features in their previous system underscored the need for a more comprehensive solution, leading HDA to seek out a platform that could effectively handle these complexities without requiring extensive custom development.

Why Enable?

Wodark tells us that one of the compelling reasons for choosing Enable was its established use at Affiliated Distributors, which is another large buying group. “Many of our members are familiar with AD and have a high regard for it,” she notes. “I thought, if it works for AD, it should work for us as well.” This familiarity and trust in the platform played a significant role in HDA’s decision to choose Enable.

Exceptional Onboarding and Support

Wodark emphasizes the exceptional onboarding and support HDA has received from Enable, stating, “The crew that brought us on board and continues to assist with configuration has been unbelievable.” She highlights Phil the Customer Success Manager at Enable as unbelievable. He understands our business sometimes better than we do.” Wodark concludes, “Overall, I would say that the entire onboarding process was flawless.”

Advanced Reporting

Wodark notes that while HDA utilizes some of Enable’s reporting features, the majority of their reporting is conducted through Advanced Reports. “We’ve had Enable create specific downloads for us, which we then pull back and use for our onsite reporting,” she explains. This approach allows HDA to leverage Enable’s capabilities while tailoring the data to meet their specific reporting needs.

Wodark expresses her optimism for the future, stating, “I am hopeful that our next phase with Enable will include more sophisticated reporting, enhanced portal reporting, and the ability to extract metrics. This will help us identify programs where members could potentially utilize the program more effectively and maximize their rebate incentives.”

Helping Members to Reach Their Tiers

Wodark emphasizes the importance of assisting members in reaching their incentive tiers, stating, “I hope we can provide more visibility to our members regarding their progress, particularly in relation to the Incentive for Growth programs.” By implementing more robust reporting capabilities, HDA aims to help members identify programs that are nearing threshold levels, enabling them to maximize their rebate incentives.

“Strategic reporting will allow us to analyze data collectively and identify opportunities where the group can collaborate,” she explains. For instance, if multiple members are close to reaching a specific threshold, HDA could encourage them to place a coordinated order that pushes everyone over that limit. This collaborative approach not only enhances individual member benefits but also strengthens the overall purchasing power of the group.

Alleviating Complexity

Wodark emphasizes, “If your vendor programs involve any level of complexity, Enable has proven to be capable of managing that complexity effectively.” She highlights the importance of the onboarding process, noting that the team’s ability to dive deep and truly understand HDA's intricate operations has been invaluable. “We operate a complex business, and the Enable team has been able to grasp that complexity and adapt their approach accordingly,” she explains. This understanding has facilitated a smoother transition and ensured that Enable’s solutions align well with HDA's specific needs, ultimately driving success in their vendor program management.

Tracking Variable Rebates and Deducting Costs

Wodark highlights the immediate benefits HDA has experienced since implementing a combined central pay system with Enable. “We are already seeing value in the fact that our central pay system now allows us to track variable rebates and effectively deduct Member co-op, allowances, and advertising costs. It’s working perfectly,” she states.

Looking ahead, Wodark expresses her desire to enhance their capabilities further. “The next area I would like to focus on is setting up all of our incentive for growth programs within Enable, allowing us to track and manage them effectively,” she explains. “I want to provide detailed reporting to our members so they can take advantage of programs that offer incentives, especially when they are close to hitting a threshold. That’s where I envision our next push will be.” This forward-looking approach reflects HDA’s commitment to maximizing member benefits and driving collective success through enhanced data insights and rebate management.