VIEW FROM THE TOP
buying group stand to prosper where competitors around them might struggle.”
EXCELLENCE IN BUYING Collective bargaining is, of course, central to what a buying group is. Hughes believes, while price is certainly key, relationships are a huge component of excellence in buying. “If we have the kind of honest, open, professional relationships with a strong rapport, we’ve already got really robust foundations upon which the negotiation of a good price can happen in a mutually beneficial way,” he said. All of this, he explained, has to be underpinned by trust. “Our Partners trust our Suppliers to deliver their best products at competitive prices with great levels of service. The bottom line for those Suppliers is that, as a Partner-oriented buying group, we support our brands. That’s exactly why the phrase ‘building strong brands’ has accompanied the NBG logo as our strapline for so many years.” Hughes explained that buying groups typically go down one of two routes: route one is to do all of its Supplier negotiation via a team of specialist Buyers, as typified by the national chains; route two is to have purely member-led Supplier negotiations. “The real secret sauce within NBG is the fact that we do both,” he said. “This hybrid approach of having Category Management Teams formed through a combination of specialist Buyers and Partners with an in- depth knowledge of the products they sell is what makes us really unique. The constituent parts of NBG are our Executive Board, which is made up of a panel of elected principal Partners; our Trading Board, which comprises the Chair of each Category Team; a central
“The quality of the data NBG makes available has made a lot of the admin of this transition really smooth. On a day-to-day level, we’re grateful for NBG’s support with data creation and data analysis. It helps take a lot off our hands so we can focus on serving our customers and growing the business.” Chris Edwards, Operations Director at MPH
team employed solely by NBG; and, of course, our network of Partners who will typically be structured by region.
“Crucially, at the heart of NBG is seven Category Management Teams – Each of these CMTs is led by its own Chairperson – a senior merchant representative with a vested interest in the performance of NBG as a whole. “The major benefit here is that every one of those categories benefits from the expertise of a committee of Partners with relevant industry experience. That team is led by one Category Chair, with the support of a professional Buyer and backed up by our outstanding Commercial Support Team.”
Hughes said that this means interactions with Suppliers benefit from countless years’ experience of understanding exactly what makes an independent merchant business tick and which decisions are likely to prove the most beneficial to NBG as a whole.
The most recent solus supply deals are a case in point, Hughes explained. “In lintels, we now have a solus deal in place with Keystone, and we also have
the same in place with Siniat for plasterboard and Knauf Insulation for glass products. “In all three of these instances, our CMTs were persuaded that concentrating our spend through one market-leading brand would achieve the best possible balance of price, service and quality.”
ENHANCING PERFORMANCE A group can have the best deals in the world, but if they are not administered appropriately, the benefits to businesses soon disappear, which means that a robust infrastructure is critical to running a sustainable, profitable business. Hughes said: “As independent merchants, we have so many plates spinning at any given time. Whether that’s sourcing a product for a valued customer, communicating delivery lead times or forecasting revenue and profit for the next week, month or quarter, can you imagine tackling those without a reliable central infrastructure?” He pointed out that there were 352,000 changes to Supplier pricing and product details in January 2024 alone. “How on Earth could any business be expected to track that much movement without robust systems?” While central infrastructure is one of the things the national merchants generally excel at, Hughes believes that NBG can compete on the same level thanks to the investment in developing, and maintaining, its own infrastructure.
He said: “I’ve certainly been very lucky to inherit the best systems and processes among any of the buying groups. Nick Oates was outstanding at driving these aspects of the business forward, and I can certainly see why he was so determined to make them work. “So when I say ‘central infrastructure’, what do I mean? We’re essentially looking at three core systems, each of which has been designed to be Partner and Supplier-centric.” The first central system is the NBG Hub.
“NBG’s helped us streamline our Suppliers and made us a lot smarter about buying. We’re going to take on more Suppliers, more product lines, and that means more stock. At the moment, we’re in a fantastic position and NBG has been a significant part of our recent success.”
Scott Aldridge, Director at Woodstock Plumbing & Heating Supplies
6 January 2025
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