Tyler Mills joins the podcast to help customers forecast chemical consumption and purchase more proactively from distributors. Too often products are not stocked in the sizes or quantities needed, so we need to think ahead of what we will purchase so distributors have time to stock it.
00:00 - Introduction
01:38 - Does your local distributor stock ALL the products you need?
05:56 - Freight minimums and group purchasing
12:28 - How to forecast chemical usage
14:51 - Distributors can forecast better than any of us
17:09 - Seasonal demands
23:00 - Summary. Thanks for listening!
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113. Chemical Forecasting (w/ Tyler Mills)
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[00:00:00] Eric Knight: Welcome back to the Rule Your Pool podcast. This is episode 113, and in this episode, we actually have a new guest who has never been on the podcast. But apparently, he has been listening to the podcast, so right out of the gate, he has definitely got an advantage over Jarred. And beyond that, he actually wrote show notes for this show. So, please welcome Tyler Mills, our Arizona and West Coast guy. Tyler, thanks for being here.
[00:00:23] Tyler Mills: Yep. Thanks for having me.
[00:00:24] Eric Knight: And I just want to make a note that we're recording this early in the morning and it's pretty early my time, but it's not even 6:00 AM your time. Kudos to you for being up this early.
[00:00:33] Tyler Mills: I'm just trying to be the new co-host. Okay.
[00:00:35] Eric Knight: Well, you're making a pretty solid case so far, right out of the gate. Not only with the show notes, but with that attitude. So that's going to be doing big things for you. So, uh, I actually don't know what we're talking about. You said you wanted to speak to the audience because something was on your mind that you continued to run into things when you were at wholesalers speaking with customers. So, real quick, go ahead and tell the audience what we're doing.
[00:00:58] Tyler Mills: Yeah, there's been a couple instances where customers are looking for products at certain sizes to help them get through a season or at least part of the season. And those distributors don't have that product or product size within their distribution location.
[00:01:12] So I just want to talk about if you're a business out there and you know you're going to use a lot of Orenda product, for example, and your distributor doesn't have that, how to go about that, how to forecast your inventory and your sales for the season you're about to get into.
[00:01:27] Eric Knight: I love it. So how to forecast correctly, because most of our customers, you're right, they don't forecast or they don't know how. So let's get into it. Episode 113.
Does your local distributor stock ALL the products you need?
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[00:01:38] Eric Knight: Tyler, I remember you called me a couple weeks ago. You were in a distributor that they weren't stocking the product that the customer was asking for. So tell me a little bit about that. Let's not get specific of where you were. What was the situation and what can we do about it?
[00:02:14] Tyler Mills: The situation was there were several companies in this market that wanted to buy five gallons of PR-10,000. Maybe multiple five gallons of PR-10,000. So I was working with the branch as far as, hey, I have these companies, they're wanting to put these PO's in. Um, they haven't yet, but can we bring in these five gallons so it's there right now, and maybe bring in a couple extra. And that was shut down.
[00:02:37] Basically they told me there was no proof of PO at the moment, and they don't want to keep that on the floor or in their warehouse because there wasn't previous sales of that.
[00:02:45] Eric Knight: Mm-hmm. Well, we run into that a lot because distributors have to monitor their inventory. They don't want to have dead inventory. In order for us to bridge that gap so that they bring in what the customers actually want, you really have to have customers reliably pulling those products in those sizes. And when that doesn't happen, that really hurts the distributor. So that's a problem.
[00:03:07] And it hasn't happened very often, but if it does, it doesn't look good on us as a manufacturer asking them to bring something in. And it really doesn't look good on a customer, specifically if you ask for something and say, oh, I really want five gallons of this product. And then you don't buy it, or you go across the street and you buy it somewhere else that really hurts you, and it hurts the distributor. Hurts everybody.
[00:03:29] So let's talk about forecasting, because the way around that is you actually plan ahead of what you're actually going to use. And our products don't expire. Now, that's not the same as HASA, right? Because HASA makes liquid chlorine. That actually has a shelf life. But Orenda products do not. So what we sort of advocate for is forecasting what you're going to need for the season and buying correctly so that it doesn't sit on the shelf too long, that you can work with your distributor so that everybody wins. They get the product moved off, you get the product and the sizes that you need. So how would you do it, Tyler?
[00:04:09] Tyler Mills: So let's say I'm whoever pools and I have a hundred pools. Mm-hmm. And for this year, I'm going to purge with CV-600. Well, that takes a lot of product to do that. So assuming that my distributor even has an enough product to do that, even if you have more pools, is probably unlikely. So, it really is key to one, work with your local Orenda rep, whoever that is, and the distributor you want to purchase from. And if they don't have proper inventory going into that season, work with them.
[00:04:41] You know, go to the branch manager, the sales, the rep, whoever it is, and say, this is the the amount I need for my purge, and also this is the amount I need to do the maintenance dose for the entire season.
[00:04:51] Eric Knight: Mm-hmm.
[00:04:51] Tyler Mills: And I think they'll be more willing once you go to them and prove to them that you're serious about this. This is not just a maybe. They will put that order in and have that product for you. And on top of that, they'll be happy because they're not sitting on it. They know that you're going to be taking that pretty quickly.
[00:05:06] Eric Knight: Yeah. Distributors get hurt when the product sits on the shelf too long. If you're going to go in and order, make sure that you pick it up because otherwise they're going to remember you for having them sit on that inventory for too long. So don't be that guy. Don't do that.
[00:05:23] Um, and that kind of segues into something else that I've heard before where people will ask for a whole bunch of stuff. Just stock, stock, stock, stock all this stuff, and then they use different products. They're like, oh, well I thought I wanted CV 700, but I really wanted CV 600.
[00:05:40] Okay, well now the distributor has it. Hopefully they'll move it elsewhere, but that really puts them in a tough position too. I mean, you're right if you're purging all your pools on the Orenda program, and we have many companies that do this, they order that product weeks in advance.
[00:05:55] Tyler Mills: Mm-hmm.
Freight minimums, Group purchasing
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[00:05:56] Eric Knight: Because what you don't see, customers listening to this, what you don't see on the manufacturing side is freight. When we ship products, if we're shipping small quantities, freight has to be paid by somebody. Whereas if you ship in bulk, we eat the freight. There's freight minimums that the distributors know about. What we're trying to do is get that distributor over that threshold of a freight minimum so that they can bring it in so that you don't get charged for freight.
[00:06:24] That's what we want as a manufacturer. We do not want any of our customers paying for freight. Make it easier on us so that we can actually ship full pallet's worth of stuff. Not necessarily for you. But who else do you know in your area that uses Orenda? Why not buy together? Why not say, Hey, I've got four of my local IPSSA chapter members, or UPA chapter members or buddies. We all want to go in on this freight qualifying order so that it's for us. That way we don't pay the freight. Boom, much better deal. Pick it up as soon as it arrives, and I think distributors be happy to work with you for that. At least I've never seen them not be happy to work with you on that.
[00:07:01] Tyler Mills: Yeah, absolutely. And I will make a quick note where we're not sitting here saying all distributors need to listen to us at all times. Because there has been instances where we have this grand plan and it doesn't work out, and then they have a black eye and so do we. Um, and if you are a distributor listening, we're not sitting there pointing the finger at you. We get it.
[00:07:19] Eric Knight: No, no, we're not blaming distribution at all. What we're saying is
[00:07:22] Tyler Mills: just wanted to make a note of that
[00:07:23] Eric Knight: we, yeah, that's good to say. Uh, it's really not on the distributor because they are doing what they need to do to run their business. We need to be thinking how does the distributor operate in order to buy better, to buy correctly so that we're not buying onesie twosies and spending more money on these smaller quantities when you can actually save a substantial amount of money by buying more in bulk and grouping up with other people to do so.
[00:07:50] And that helps the distributor too, because they move the inventory faster.
[00:07:54] Tyler Mills: Correct.
[00:07:55] Eric Knight: Now a lot of stores do not stock enough. So let's say I'm a customer, I walk in there and I've decided, hey, I need to purge 20 of my pools. Well, they don't have enough.
[00:08:06] So what do you think that customer does? I mean, in your experience, you're in a mature market, you're in Phoenix. We're stocked pretty much everywhere in Phoenix. But if you're not in Phoenix, That's not really a thing, but what happens if that's the case in Phoenix? What happens if I walk into a distributor and there's not enough Orenda in there?
[00:08:22] Tyler Mills: Well, a couple things need to happen or that do happen. One, the branch might look at a branch transfer from elsewhere. To see if that makes sense to ship it from a different branch and maybe in a different market or a different part of, let's say Phoenix. If it's still not a possibility, then the counter staff, the branch manager, whoever you're working with, needs to put a PO in to the manufacturer. Now I'm in Phoenix, Arizona. One of our bottling plants is in Chandler. So the turnaround time out's pretty quick. So customers can see that pretty quickly. But if that's not the case, then that can take up to a week a little bit more.
[00:08:55] So that's why we're, I think we're having this podcast is start thinking about what you need and plan weeks in advance.
[00:09:03] Eric Knight: Yes.
[00:09:03] Tyler Mills: Um, and don't just expect it's going to be there in two or three days, because things happen as we learned the last couple years. So I guess over prepare or give yourself more time than you think you need, just to be safe.
[00:09:16] Eric Knight: Most of our orders get out within 48 hours of receiving them. I mean, if you put it in Friday night, it's going to probably ship out Monday most likely. But then you have freight, right? You have shipping, and it depends on where you are. It may take time to get there.
[00:09:29] And we have had lost shipments that are not our fault, you know, they're on FedEx or whatever. But things happen is the point. Branches do run low on product. You're not the only person buying Orenda at that branch. So communicate with your salesperson or your branch manager or whatever, plan ahead.
[00:09:46] And there's two scenarios that stick out for me. And I don't know if you agree with these. Where people fall short on product and then it's always a 911. Right? And that's startups and green pool cleanups. In the springtime, there's just never enough product because so many people have green pools that they're cleaning up.
[00:10:04] You just can't get enough enzyme and phosphate remover. We get so many calls about that. I mean, every spring, well, my, my distributor doesn't have enough. Oh, I went in there and I really needed it, but they don't have it. What do I do? Well, how about you plan ahead and expect that there are going to be green pool cleanups?
[00:10:18] And get some stock and inventory in your garage or wherever you run your business out of. The products won't expire. As long as they don't freeze, they're not going to expire. Then you at least have that reserve inventory for an emergency, right? You have it ready to go when the green pools show up.
[00:10:35] And if you do startups, again, our products don't expire. Just have a whole bunch of it ready to go. Just like you have bags of calcium chloride. If you're going to do a startup, you have it, you're ready to go. And the successful people that do our startup, they have a bank of CV 600 and SC 1000, just like they have calcium chloride and acid. They know what they're doing. They have it, and they don't have to ever rush to distribution because they know what's going to be required.
[00:11:00] Those are the two because they're so urgent, right? If it's just a pool that you're maintaining every week and nothing's really 911, well you can maybe wait a week or two. But if it's a startup and the pool's getting filled tomorrow, what do you do?
[00:11:14] Or if it's a green pool cleanup and you just found out about it, because you're taking it on service, you need product today. Well what if the distributor doesn't have it? Well, what if they only have a 55 gallon drum of it? And you can't use that because you don't have a forklift? These things happen. So Tyler, I'm glad you're bringing this up man, because I, I didn't realize, uh, we hadn't talked about this on the podcast, but this is something that a lot of people call us about.
[00:11:36] Tyler Mills: I'll add one more scenario for us Phoenix people, we have these things called haboobs, which is a dust storm, Eric.
[00:11:43] Eric Knight: Oh yeah. The dust storms, right?
[00:11:44] Tyler Mills: Yes. And with those dust storms that sometimes almost black out the sun, there's a lot of junk and crud and crap in that dust and that goes in the pool and that can take a lot of Orenda and other products to clear that up.
[00:11:59] Eric Knight: CE-Clarifier sells a lot during those haboob seasons, I know that.
[00:12:03] Tyler Mills: Yeah. And so does PR 10,000 from the agriculture. You know, everything's kicking up. A lot of phosphate based, whatever it is, is in that dust.
[00:12:10] Eric Knight: Same with wildfires now that you mention it.
[00:12:12] Tyler Mills: Yeah. And there's a lot of PR that flies off the shelf, and I've walked into distributors after the dust storm, and there's not bigger sizes to be had. Like pints is the biggest size you could probably find.
[00:12:23] Eric Knight: Wow.
[00:12:23] Tyler Mills: So even plan ahead for that because we know that's coming at some point here actually pretty quickly.
How to forecast chemical usage
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[00:12:28] Eric Knight: So how can our customers forecast?
[00:12:31] Tyler Mills: Where you start is have a baseline for what you want your inventory to be. Right? Like, this is where I want to be, this is my sweet spot. then off of that baseline, create a maximum of product that you want in inventory and also a minimum. And when you hit the minimum, obviously, hey, it's time to order again.
[00:12:48] Eric Knight: And then that way you have some time, right? I don't it today. I'm going to need it in three weeks. That kind of thing. That's smart. So let's say I'm a one poler. I don't really know, how do I set my minimum and maximum, Tyler?
[00:13:01] Tyler Mills: You have to sit down and assuming, you know, your pool volumes like we talk about...
[00:13:05] Eric Knight: Oh, of course. Yes, of course. Of course we do. Yes, yes. Um, use water meters on all our startups. Yes.
[00:13:11] Tyler Mills: Yeah, exactly. So know rough estimate of the volume of water you're treating on your route.
[00:13:17] For that typical season or time period that you want to treat. That really helps with our products like CV-600, SC-1000, CV-700, things of that nature.
[00:13:27] Eric Knight: Mm-hmm.
[00:13:27] Tyler Mills: And then some of our other products, it's really just based off of what happened the last year and it's kind of an educated guess. Like PR-10,000. Um, some years some people have to use more of it, like this year. In other years maybe it's not so much. So going off previous years or maybe you've grown, you've added 10, 20 pools and just, it's kind of a rough guess at that point.
[00:13:48] Eric Knight: It makes me think of companies that are in seasonal markets. Phoenix is not what I would consider seasonal, even though it does get cold in the winter, your pools are not closing right.
[00:13:57] But in the Northeast and the Midwest, even here in the Carolinas, pools close. And we have many great loyal customers in these markets that are only using our products four or five months a year. What they forecast and they purchase in the fall because they want to be ready to go for openings or they purchase over the wintertime.
[00:14:19] And in those seasonal markets, especially if you're listening to this, you have a much higher probability of negotiating better pricing with your distributor because you would be buying in bulk in a slow time of the year. They have the ability to bring something in, but you have to do your part.
[00:14:35] Do not go to a distributor and say, I need all this Orenda for my next season, and then let it sit on the shelf because you don't want to put it in your garage yet. Or you don't want to take it off their shelf. You have to do your part and help that distributor. Otherwise, they're not going to be willing to negotiate with you.
Distributors can forecast better than any of us
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[00:14:51] Eric Knight: But here's an example of something that has been very effective. Why don't you talk to a distributor and say, Hey, I'm going to need all this Orenda for my spring openings. It's, you know, X cases of this and a bunch of five gallon drums, whatever it is. And I want to pick it up the day it's delivered so it doesn't sit on your shelf.
[00:15:08] Man, that's music to a distributor's ear. I mean, I've never worked in distribution, but we deal with them all the time. You do too, Tyler. That's exactly what you need to do to help them out, move the product off the floor even before it hits the shelf, ideally. That is so good for that distributor, and that builds trust. That builds reliability.
[00:15:28] If you are not large enough to hit a freight minimum, hey, we totally respect it. We want to work with you just the same. But who else can you work with? Who can you work with that you may not even know? Maybe you can go to the branch manager or the sales guy or whatever from that branch and say, who else can I buy with so that we can get a freight qualifying order and get it off your shelves immediately?
[00:15:50] Anybody listening to this who buys from distribution, I'm telling you right now, that's an effective way to work with distributors. Help them out, help them help you out. And any distributor listening to this, not that they would, because we only have 142 listeners approximately now. Um, and there's more distributors than that in the country.
[00:16:10] So, uh, if you have a customer who's trying to come to you, try to work with them. Work with them on who else could be buying that so that they can bring it in and that'll help you move your product faster. I think that's a great thing. And then on the macro level, Tyler, you've got inventory levels for the customers, whether it's in the garage or in your warehouse.
[00:16:30] Think about their inventory levels. Maybe as a customer, you should be asking your distributor, well, what do you have stock of that's not moving fast? How can I help you? Maybe I know somebody that can buy those odd sizes that have been sitting on the shelf for a year because that inventory's hurting that distributor sitting there.
[00:16:48] Maybe you can take one for the team and take a size that's weird to get it off their shelf, to make room for what you need in the future. If you want to get grace, give grace. We talked about this with Harold in a previous episode. Be a partner with your wholesalers and they will treat you the same way back. They have no reason not to.
Seasonal Demands
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[00:17:09] Eric Knight: Now, there's another thing I want to talk to you about Tyler, and that is you said be aware of the season, like you know, the windstorms and winter and all that stuff. How can you forecast the expected demand for different seasons?
[00:17:20] Tyler Mills: Well again it depends on the market. One, know what to expect. Especially if you've been around the block or been servicing pools for a while, you know what's going to happen at certain points. For example, I was talking to a group, and this was about February. And I asked them, how many of you are expecting to get algae blooms in March or April? Everyone raised their hand.
[00:17:41] Eric Knight: That's in Phoenix, right?
[00:17:43] Tyler Mills: Yes.
[00:17:43] Eric Knight: Yeah, that's funny because the pools aren't even open yet in the northeast. Yeah, March and April. Okay.
[00:17:47] Tyler Mills: Yeah. Depending on the, the temperatures and things, mustard algae starts to kind of form. And I said, how many of you do anything to prepare for that? They all put their hands down.
[00:17:58] Eric Knight: Nobody. Oh my gosh.
[00:17:59] Tyler Mills: And my point was, you know certain things are coming. So be prepared for it. Have the product ready to go. Be proactive, don't be reactive. We talk about this all the time, but I'm going to say it again. We as humans waste so much time being reactive instead of being proactive. Yeah.
[00:18:15] So you can put that time elsewhere in your business. So know what's coming. Um, if it's a market where they're closing pools, know when pools are typically about to close. What products you need and the procedures you need to do that instead of a week away being like, I need everything at this moment.
[00:18:31] Eric Knight: Yes, yes. So many calls come in, oh, they don't stock your stuff. Well, when did you ask them for it? Today! And when do you need it? Today! Yeah. Okay. Yeah. It's frustrating they don't stock the stuff, but how did they know you were going to walk in today?
[00:18:45] What's your buying history? Are you there every day buying? Are you there once a week? Is it every Tuesday you come in and buy the same thing? They can forecast based on your behavior. And let me tell you something. Distributors are much better at forecasting than we are.
[00:18:59] Tyler Mills: Yes.
[00:18:59] Eric Knight: They are much better than any of our customers at forecasting what they use. They've got all the algorithms behind their software that is really, really good at telling them buying behaviors. If you are just deciding to walk in their willy-nilly doing something you haven't done before, they're not ready for you, customer. They don't know you're about to come in there and make a purchase. And it's not just Orenda, by the way. This goes for everything.
[00:19:23] Tyler Mills: Mm-hmm.
[00:19:23] Eric Knight: This goes for equipment: heaters, valves, plumbing. I mean, if you don't have an established history of purchasing that way, they don't know you're coming. Give them time to adapt. Work together as a team. And there are plenty of companies that do this, by the way. Especially in UPA and IPSSA. A these guys know how to do this. Now, if you are listening to this and you are in one of these organizations, ask your chapter, can you buy together?
[00:19:47] And it doesn't have to be just Orenda. Help your distributor help you out. Why not collectively work together to buy more in bulk and help your distributor out? They're a lot more likely to play ball if you are moving product consistently for them and it's not sitting on the shelf. Go in there as a chapter and say, what's sitting on your shelf? What is hurting you right now? What can we take off your shelf that is not moving right? To make room for what we really want? That is helping your distributor. That is being a team player and helping them out, and you are a lot more likely to negotiate further from there.
[00:20:23] This is all good stuff, man. I never thought this would be a podcast episode, but it is a really relevant one. You are making a big push to become the co-host. I can tell. And these show notes make sense.
[00:20:33] Tyler Mills: I will add one thing too. Um, sometimes us, as I guess salespeople, surprise distributors and branches. What I mean by that is maybe we bring an influx of new customers for Orenda product and they're not ready for it. That's why if I know a customer wants a certain amount of a product, I typically call that branch or BDR salesperson, whoever it is, and give them a heads up. Like, this customer is looking for this. Even before that customer might call that distributor and, and explain it to them.
[00:21:06] So that's kind of what's happening on our end. I'd like to communicate an all fronts so there's no surprises, and we can start working on whatever we need to work on to make it as simple as possible for that distributor and customer.
[00:21:17] Eric Knight: And then it comes down to the question. It as a customer, how much do you actually consume? Do you know? Have you actually broken it down by pool? Or maybe it's by week or maybe by month? How much do you fit on your truck versus how much do you keep in your garage or your warehouse? If you don't forecast your actual chemical consumption, again, this is not just Orenda. This is chlorine, this is acid, this is calcium, this is bicarb.
[00:21:44] You're not doing yourself any favors by just continuing to fly by the seat of your pants. You're just going out there and doing what you do. It is worth the few hours to sit down, maybe with a spreadsheet, maybe with a piece of paper, whatever it is, and just think critically about how you actually operate your business.
[00:22:01] And you're going to see some opportunities for profitability within your own business that have nothing to do with raising rates. We want to help you do that. We can see vulnerabilities based on what you're telling us. Things keep getting more expensive because of inflation, but if you can buy something in today's dollars and it's not going to expire, and you know you're going to use it, that's an advantage. That's kind of like a tax free pay increase if you net it out over the year.
[00:22:28] Maybe you can't afford to do the entire season. Hey, no disrespect, most people can't. I mean, unless you're a huge company that has a stockpile of cash, most companies can't afford to buy for their entire season. I get it. But how do you break it up? Do you do monthly purchases? Can you buy certain products? Maybe you can buy all of the calcium you need for the year in one go, but you can't do it for other things. Okay. Just keep track of it. Get into a system where you were a more efficient business and you're going to be able to get products a lot more reliably.
[00:23:00] So, uh, what else would you like to add, Tyler?
[00:23:03] Tyler Mills: I can't really think of much else. What about you?
[00:23:05] Eric Knight: Huh? Not much. Well anyway, this is episode 113 of The Rule Your Pool Podcast. Out of the gate, swinging home runs, Tyler Mills, thank you so much for being on the show. And I hope to have you on in the future.
[00:23:18] Tyler Mills: Yeah, thanks for having me and Jarred, I'm coming for your job.
[00:23:22] Eric Knight: Oh, shots fired. Shots fired,
[00:23:25] Everybody, thank you so much. If you have questions, ask.orendatech.com is the help center. I'm Eric Knight with Orenda. This has been Tyler Mills. Thank you so much, and we will see you next week.