Price. Voltage, amperage or wattage. Size. Perhaps color. Just some basic information you need to buy the right electrical products, right? Not if you live and breathe electrical data and your livelihood depends on providing it in a usable format for electrical distributors, electrical manufacturers, electrical contractors and other end users.
Trade Service has been in the data business for 77 years, and there probably isn't a company whose products or service have been a more ubiquitous fixture at electrical distributorships. When Bill Gudie founded Trade Service in 1931 as Biddle Trade Bureau, the company's pricing and product service first came in the form of mimeograph sheets. Those sheets grew into the massive printed catalogs that eventually sat on the desks of thousands of electrical salespeople throughout the land. You still see these print catalogs at the distributorships that rely on them as a backup reference tool, but most Trade Service data now comes in the form of a massive 2.7 million stock-keeping unit (SKU) database that more than 1,000 distributors with 7,500 total locations download onto their computers or access remotely via the Web. Downstream, 20,000 employees at electrical contractors use Trade Service's TRA-SER database to estimate jobs, specify and procure parts. In the not-too-distant future, contractors will pull down customized pricing and product data from pre-selected distributors into their estimating systems when they are estimating bids. Not much further down the road, Trade Service executives envision an online community where they will provide a broad range of content far outside their current portfolios of data products and services to electrical distributors, manufacturers and electrical contractors.
Pretty simple story, right? Not exactly. A two-minute elevator speech describing the company's role in the electrical market and its vision for the future might do an alright job of covering the basics of Trade Service's current and future data and service offerings, but it wouldn't explain how some major events in the company's relatively recent history and some market misconceptions have colored its role in the market and have helped form the foundation for its future. Take the sometimes painful memories of the i2 Technologies era from 2001 to 2005, when Trade Service was owned by a high-flying dot-com that at one time had a market cap of nearly $50 billion and had big ideas about using the Trade Service content to construct one of those online procurement websites that were all the rage in the dot-com era. After i2's stock plummeted, the ensuing layoffs throughout i2 hit Trade Service, too, although company executives say Trade Service was spared the full brunt of the cutbacks because it was operating as a stand-alone company in the i2 hierarchy.
More recently, there has been the controversial end of its data-sharing agreement with IDEA and the aborted joint venture between the two companies. And throughout much of the company's history, there have been misconceptions about exactly where Trade Service gets its product data from and how it edits that information.
On the flip side, there's the sky's-the-limit optimism so apparent when anyone on the Trade Service executive team starts talking about several new products and services that will draw from an electrical database fast approaching 3 million SKUs for electrical contractors and distributors. Add in the financial weight of a $55 million investment from GF Capital, a New York-based investment firm, and you start to see why the data dudes and dudettes from San Diego are passionate about their products and optimistic about their future.
At the helm of the 135-employee company is Tony Dubreville, a 24-year Trade Service veteran appointed president, CEO and chairman in 1999. He has the quiet confidence of a manager who has survived the data wars, believes in his company and employees and is excited about what the future holds. Dubreville is a native Southern Californian who graduated from San Diego State University with a bachelor's degree in business. A devoted family man, he, his wife and two children are rebuilding the home they lost in last year's San Diego fires. Compared to that experience, the challenges that await Trade Service as he and his management team reposition the company in the post-IDEA era are quite minor in the big picture.
It's somehow appropriate that when an editor from Electrical Wholesaling recently visited Trade Service for this article, the company's offices in a quiet, palm-lined San Diego office park were in the midst of major renovations. Dubreville checks on the progress of the company's remodeling project frequently, but he is looking at blueprints of a different sort when he and his employees discuss Trade Service's expansion plans, now that they are past the i2 and IDEA eras and can devote all of their energies to expanding the company's portfolio of data services to distributors, contractors and manufacturers.
At the center of all of the company's operations is the product database, which resides in several aisles of servers in a secure data room in the San Diego headquarters. The size of this database is truly mind-boggling. The electrical database alone contains 2.7 million SKUs from 631 manufacturers and 1,300 brands from those vendors; Trade Service also provides similar product and pricing services for several other market verticals, including the plumbing, HVAC, industrial, office supply and automotive aftermarket (see sidebar). While Trade Service's electrical database is actually a little smaller than its database for the automotive market, the electrical business accounts for 70 percent of its total revenues. The electrical database is growing by 50,000 SKUs per month. In addition, the company's electrical product specialists update an average of 500,000 SKUs per month and add attributed data such as images and catalog pages to 75,000 SKUs per month. Trade Service also provides cross references for 150,000 items and offers 16,000 SKUs cross-referenced with the Department of Energy's EnergyStar designation, because customers sometimes need to find energy-efficient electrical products with the EnergyStar label.
Despite the size and complexity of this database, a few steps away from the servers that store it are several reminders about realities of how the customers use this data: a set of the company's famed humongous pricing books stand testament to fact that some companies still like their data in print. And not much further away on that same floor of the company's headquarters is a room filled with computers that copy this data onto CD-ROMs and even floppy disks for those customers who aren't interested in pulling the data via online downloads. The same floor of the building offers another clue to how Trade Service does business — it's the work-hours home for dozens of product specialists and editors who live, breathe and manage electrical data. These Trade Service employees spend much of their time talking, e-mailing and otherwise communicating with electrical manufacturers about their data as they prepare to load it into the Trade Service database.
While the care, handling and investment in electrical data is obvious to any visitor to the Trade Service headquarters, it hasn't always been as apparent to what has been a vocal minority in the electrical industry who aren't happy with how Trade Service manages manufacturers' data. Dubreville is quick to correct several misconceptions about how Trade Service sources and handles this data. He is emphatic that today Trade Service gets its data directly from manufacturers and not from any other sources. Years ago, the company did occasionally develop suggested resale pricing in its pricing books when it was unable to obtain that pricing information from manufacturers or if that information was in a format that the distributor couldn't use, according to a 1984 Electrical Wholesaling interview with company founder Bill Gudie.
That process has changed. Once Trade Service gets pricing data and related product information from manufacturers, 100 product specialists in San Diego compare all new electrical data that manufacturers submit with what's in the Trade Service database and contacts them with any questions or changes. “Our data specialists know if something looks unusual,” says Shirley Vaughn, director of operations.
These product specialists perform an extensive quality check, says Dubreville. “If they have a price for a widget of a dollar and the price went up to $2, we call them and ask, ‘Did you really intend for it go from a buck to $2 bucks?’ We make sure the manufacturers' data is what they say it is before we publish it. We review each submission, carefully integrate it into our system and format it so the distributor's computer system can easily import the data. Whenever we discover a potential issue, we work hand-in-hand with the supplier until the issue is clarified. We can enhance it with several added data fields but we don't change it.”
Dubreville says the company's content specialists continually amaze him with their passion for electrical product data. Many of them have worked with electrical product data for years and are company veterans who often top the Trade Service's average employee tenure of 19 years. “They live and breathe content in a way that's hard to imagine,” he says. “I will get calls in the morning, night and on weekends about content.”
A related misconception about Trade Service is that an offshore workforce in India with no electrical expertise inputs some or all of the pricing and product data. Dubreville says all updates and maintenance of its pricing and product data are done at the San Diego headquarters, but that the company does utilize a small employee base in India for digital image conversions. Along with running Trade Service during the i2 era, Dubreville managed a large content operation in India for i2. Back in those days he had up to 1,000 employees reporting to him.
One of the biggest developments in the company's proud history was the recently announced decision to end its decade-old data sharing agreement with IDEA, which operates the Industry Data Warehouse (IDW) and is owned jointly by the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., and National Association of Electrical Distributors (NAED), St. Louis. The two companies ended that data-sharing agreement on July 20, and prior to that discontinued discussions about a proposed joint venture between the two companies. Dubreville says Trade Service and IDEA are going forward as “friendly competitors” with distinctly different operating models and data offerings, and that he respects new IDEA president Bob Gaylord and IDEA. (Editor's note: An upcoming Electrical Wholesaling feature article will focus on Gaylord's plans for IDEA's future growth).
As reported recently in Electrical Marketing newsletter, the decision to part ways was the latest chapter in the story of an interesting partnership of two competitors that includes different philosophies on populating and updating massive databases that contain millions of electrical product SKUs and a proposed joint venture of the two businesses. After the joint venture was turned down by the NAED board of directors last year, IDEA and Trade Service attempted to extend the data-sharing agreement, according to sources close to the negotiations. Trade Service's Dubreville said that while he and Bob Gaylord, IDEA's president, have a good working relationship and negotiated for many months trying to strike a deal, they were unable to find a mutually acceptable solution.
“I have a lot of respect for Bob,” said Dubreville. “He and I talked for many, many months about how to put a deal back together. We (Trade Service) remained very open-minded, and I believe he was as well. But at the end of the day, we couldn't come up with a fair and equitable deal that both sides felt good about. It was that simple. The joint venture was not acceptable to IDEA, and anything short of that didn't work for us. We just couldn't afford to give them all of our data again. We agreed not to renew the agreement and let it expire, and to become friendly competitors.”
Dubreville said that over the past 10 years Trade Service and IDEA had many discussions about their relationship and product offerings. He said that in the recent attempt to form a joint venture, IDEA and Trade Service mutually hired independent consultants, “to come in and see if there was a deal, and if there was a deal, help us put it together in a fair and equitable way. We both invested a lot of time and a lot of money in that venture.”
“We came up with a scenario that both sides felt very good about and felt was fair and equitable,” he said. “It was supported by Trade Service and it was supported by IDEA's executive committee. To be honest, for reasons we still don't quite understand today, when it got to the larger IDEA board, it was not supported. As a result, all discussion ended.”
Dubreville says one of the biggest challenges of the IDEA era for Trade Service was that the company was “competing against itself” by providing its core pricing and product data to the IDW. Although the data that Trade Service provided to electrical contractors and the attributed product data (product images, catalog pages and other forms of extended content) it developed during the i2 years weren't included in the arrangement, the massive amount of data that it supplied to IDEA made it tough for users to differentiate between the two companies. As part of the initial agreement, Trade Service contributed a whopping 1.3 million SKUs from 350 manufacturers to the IDW. “The agreement called for us to share data equally,” says Dubreville. “What that meant was that as Trade Service added manufacturers, we would share them with IDEA. We would continue to update our database and share those updates with IDEA. As IDEA gained traction, they would share with us those manufacturers that went directly to them. Because that would be done electronically, that was supposed to save a lot of time and money.
“The agreement called for them to only disseminate information to distributors in an EDI format. We said, ‘That's only a segment of the market. That sounds fair. We went ahead and did that for 10 years, so for the last 10 years we basically had the same content. We invested a lot of money and kept our head down.”
Adds Tod Moore, the company's vice president of sales and marketing, “We really took a back seat to IDEA and we did that by design. We didn't want to look like two organizations bashing it out. We were a partner, and we tried to be the best partner we could while competing. Now that we are separating, we have to reinvigorate our brand and our image. We grew a lot as a company in the last 10 years.”
While Trade Service had a relatively low profile during the past 10 years in the distributor side of its business due to its IDEA partnership, it was investing heavily in its TRA-SER database for electrical contractors and invested millions to augment thousands of SKUs in its core electrical pricing and product information with attributed data.
Today, Trade Service's key products for distributors include its eDataFlex electronic pricing and product information, which contains 2.7 million items from 631 manufacturers; the 700,000 SKUs of rich content in eDataFlex CatalogConnect that distributors can use for Web-based catalogs; the Comparator Web cross-referencing tool and its 150,000 SKUs; and the soon-to-be officially released Supplier Xchange, which links to electrical contractors through their estimating systems to selected electrical distributors and enables them to get custom pricing they can use in their estimating bids. This gives their distributor partner an early heads-up on upcoming construction projects in their market areas. For electrical contractors, the company offers its TRA-SER product and pricing service, a 2.7-million SKU database with items from 631 manufacturers that offers “column three” (suggested resale) pricing, product information and images.
Supplier Xchange and the updated TRA-SER SX database with a Web-based interface are major elements of the company's Trade Service Online project, which the company's executives say will create an online community where distributors, electrical contractors and electrical manufacturers can connect with each other, and get information such as copper pricing, industry news, new product announcements, online training modules from BlueVolt, formulas and links to associations and other industry groups.
The Supplier Xchange effort is an intriguing bet by Trade Service on how it believes electrical contractors will want to select and purchase products in the future. The company's executives don't think most electrical contractors want to shop for electrical products the way a consumer might buy a pair of khaki trousers at www.landsend.com or www.llbean.com. Instead, Trade Service believes they want the purchasing function closer to their business system and estimating package when they do a bid. Supplier Xchange will let them establish a secure, online link with a selected electrical distributor so that the distributor can provide customized pricing instead of the widely used but very generic Column 3 pricing, so that can be imported into the estimating package and used to create more realistic bids.
Dubreville is quick to point out that Trade Service is happy with its role as a data provider and has no intentions of getting into the procurement/e-commerce end of the business. He says Supplier Xchange was created to take cost and time out of the bidding process, to give contractors access to more realistic pricing, and to get electrical distributors into the bidding process earlier than ever. Supplier Xchange will be available in the next few months to distributors using Trade Service data and to electrical contractors using TRA-SER at no additional charge. “It's not a shopping tool or a procurement tool, says Dubreville. “It's a way for a contractor to become closer to a distributor. It drives cost out of the ultimate transaction.”
Bob Stone, Trade Service's director of sales and business development, has been beta testing Supplier Xchange over the past few months. He says Supplier Xchange fits with the future direction of estimating companies like McCormick Systems, Accubid and Maxwell Systems, because they are all developing purchasing modules to add to their estimating software.
“Supplier Xchange prepares the way for an electronic transaction,” he says. “One of our beta customers, a Top 50 electrical contractor, says he is going to tell his distributors if they don't get on Supplier Xchange, then he won't do business with him. They recognize that by being on that and being connected electronically saves them so much time and money. It also helps them win more bids because they are not bidding blind.”
Adds Dubreville, “With Supplier Xchange, a distributor gets more visibility. A distributor can provide product and pricing information instantaneously to assist in a job quote. A distributor then has a solid lead. He knows, for example that XYZ contractor is bidding on a $20 million job. It gets them in early. It's good for the distributor and good for the contractor. It's all about visibility.”
Trade Service's executives believe the Supplier Xchange model will be a natural fit for the electrical market because of the central role that estimating software companies play in the development of projects and because it could eventually lead to the procurement of products though those estimating packages. But customers in some of the other markets in which Trade Service works have different purchasing habits, says Moore. “Office supplies are easy to buy over the Web,” he says. “Our average office supply dealer may be selling 50 percent to 60 percent of his total business through his Web storefront. Those commodity groups lend themselves to being purchased over the Internet, because they are not high-priced items that you need to really look at. In other groups, whether it is electrical or plumbing or something else, buying those types of products on a Web storefront just doesn't feel comfortable to the contractor. They want to search to get the information, and then pick up the phone and call.”
Stone says while Trade Service doesn't see that much commerce across distributors' storefronts, electrical contractors are using them to get the product information they need to make a purchase. “A lot of contractors are hitting distributors' websites at night,” he says. “Even though distributors may not be getting a lot of online orders, they are still fulfilling a very real need for their customers. They are researching, and for that to be a good experience you must have rich data.”
Where is Trade Service headed next? Dubreville won't divulge the company's total sales, but he says Trade Service has been growing 10 percent annually for many years and that he expects it to grow at an even faster pace in the future with the new products it has under development. To help fuel this growth, the company is trying to integrate as much customer feedback as possible early in the product development process and recently established a distributor advisory group monitored by John Henry, director of business development, to get a sense of what distributors want from Trade Service now and in the future.
Moore says Supplier Xchange and the new TRA-SER SX product, which allows contractors to access pricing and product data online, will be the cornerstones of its Trade Service Online effort and help the company move from being a “1980s/1990s-style publishing company to being a 2000-style information service company that encompasses all the best of what we have done and take it to the next level.” He sees Trade Service providing distributors, manufacturers and contractors with an online community that's initially based on the pricing data in TRA-SER SX and Supplier Xchange and possibly expanding into providing manufacturers with marketing data.
“We ultimately want a way for manufacturers to communicate directly to that TRA-SER desktop,” he says. “Maybe they just want a specific message to a specific zip code, area code and region. It could be a new product announcement, product training or advertisement. We would give the distributor the same opportunity. This community can grow well beyond just being a communications network. We want to strive to be the Yahoo for the electrical market — all the information that a contractor and distributor needs. It will always be information related. We are always going to be centered on data. But data is taking a lot of different forms today — productivity products, product training videos. Some of it will mean we will create that data, other times we will partner, like what we did with BlueVolt. In the end we will be sitting on lots of information that I am not even sure we know yet how we're going to slice and dice it.”
Trade Service Over the Years
Founded by Bill Gudie in Los Angeles. The company published its first product for electrical contractors, which was eventually named the “Biddle Book.”
Published “The Electrical Trade Book,” which is still a popular reference source to this day.
“The Electrical Sales & Service Manual” is published. Also still in use.
Gets into the air conditioning, refrigeration and heating industries with the purchase of RAC Publishing Co.
Introduction of the Computerized Price File Maintenance Service (PFMS), which gave distributors a method of electronically updating their inventory product and price records.
First published its ever-popular “Electrical Distributor Price Directory” and “Electrical Supplies Price Directories.”
Moves into the plumbing industry with the acquisition of Modern Price Book Service.
Acquired Trade Service of Australia, Pty., Ltd., Brisbane, Australia, publishers of the “Electrical Contractors Pricing Manual” and the “VideoSource Catalog.” Also in 1983, the company began serving the automotive aftermarket through its acquisition of Nu-Way Automotive System Inc., Columbus, Ohio.
TRA-SER (an acronym for TRAde SERvice), first published and quickly became the industry's most used electronic price book.
Acquired the Plumbing & Mechanical Division of Moore Services Inc.
Moore Office Products acquisition provides entree into the office products industry. Trade Service moved into the Canadian market.
Signed data-sharing partnership with IDEA.
EDataFlex family of products takes industry content development to the next level to fuel e-commerce and web storefront applications.
Acquired by i2 Technologies, Dallas.
Management-led buyout took company private. Subsequently, company receives financial investment from GF Capital, New York. Also in 2005, a Web version of one of the company's most popular products, Comparator is launched.
Trade Service acquired O/PUS for its office products segment.
Trade Service acquired the Britannia Updating Service in the office supplies market.
Joint venture discussions with IDEA end. Also in 2007, Trade Service acquired National Pricing Service, a U.K.-based data provider in the office supplies market.
Ends data sharing agreement with IDEA and acquires Atomic Data Management Services, yet another U.K.-based data provider in the office supplies market.
Other Trade Service Markets
While the electrical market accounts for the majority of Trade Service's sales, it also has sizable operations in the plumbing, automotive aftermarket, industrial and office supply markets. It has 3 million items in its automotive database and the plumbing database has more than 2 million items. The industrial database has 1 million SKUs and the HVAC and office databases each have 150,000 SKUs.
Dubreville says each database has its own idiosyncrasies. For instance, a sink in the plumbing database may come in 12 different colors. The automotive database just contains basic product and pricing data and no attributed data, but many of the SKUs have to be cross-referenced by car manufacturer, model and year. He doesn't expect to move into any new vertical markets in the near future, but does look at expanding within the company's existing markets.