ALLPRO Independent Magazine November/December 2022 by ALLPRO Corporation

November/December 2022

pa in te r s alle y

Collaborat ion & Communication are key for this booming Washington business

C AS H I S KI N G

COLOR OF T HE Y E A R

N E T WOR K IN G W IT H NE X TG E N

ALLPRO members share strategies for managing cash flow

Benjamin Moore & PPG unveil hot new hues for 2023

Get to know goal getter, amateur golfer, and NextGen retail member Sean Paul

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AT THE MIKE | F U TU R E

@ ALLPR OCOR P

A YEAR OF TRANSITION

MI CHA EL B E AUDOIN Executive Vice President ALLPRO Corporation | 813.690.7985

ooking back, 2022 has been a transitional year. It started out with an Omicron surge that made putting on the spring show very challenging, to finishing the year with COVID-19 no longer impacting day-to-day decision making. Another example would be the transition of the housing market – in the beginning of the year, it was a sellers’ market and prices were rising as a result, to the end of the year, where it is becoming a buyers’ market and prices are dropping. The paint industry is transitioning into a new business cycle as well. A cycle where suppliers will again have to work to sell their products and compete for your business. A cycle where there is inventory again, and in some cases over inventory, creating buying opportunities. This was

evident when planning the stockholders meeting, as we were able to secure show-only promotions from all 80 attending suppliers more than a month before the show. This was radically different than the previous year when planning the Nashville show, where some suppliers were not allowed to attend simply because they could not offer a deal and, in some cases, we had to finalize a promotion days before the show. I would expect this trend to continue in the spring. Suppliers will be creative when putting together promotions and enthusiastically using the shows to gain market share. The past three years have been transformational for the group. We have grown by more than 50% over that time which represents over half a billion dollars. It was a testament to our model of entrepreneur owners that

knew how to navigate the challenges. It was also because of the suppliers that supported the group and gave us a disproportionate amount of their limited products to ensure that we could win. For the past three years we leveraged our partnerships to compete. Most of our supplier partners very much led with ALLPRO. In the coming years, it will be our turn to partner with them and help them compete in different times. Times where suppliers that traditionally focus on other channels will look to gain market share within the group. Times when suppliers will be challenged with competitive market pressure and high demands to grow sales. What makes ALLPRO a unique group is how it partners with its suppliers. The loyalty the members have for the group and the loyalty that

S P O T L I G H T:

(Continued on page 5) 6 PRESERVE PAINTS

16 ALLPRO TALKS

22 COLOR OF THE YEAR

Trust & teamwork are paramount for the success of this Alabama paint store

Catching up with the managing director of ALLPRO's Canadian affiliate, Canpro

Benjamin Moore & PPG unveil hot new hues for 2023

18 CROSS-BORDER COLLABORATION

Inflation challenges for paint retailers

42 FINAL COAT

34 CASH IS KING

Annette Smith joins the ALLPRO family as new systems analyst

10 PAINTERS ALLEY Collaboration & communication are key for this booming Washington bussiness

Canpro & ALLPRO's partnership is a perfect paint match

26 PRICE INCREASES

ALLPRO members share strategies for managing cash flow

November/December 2022

40 NETWORKING WITH NEXTGEN Get to know goal getter & NextGen retail member Sean Paul

| ALLPRO INDEPENDENT | 3

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INDEPENDENT | ON TH E B LO C K

SHARE YOUR NEWS!

Congratulations to the new additions to our ALLPRO family!

Welcome to our ALLPRO family! Please join us in welcoming NAL’S PAINT CENTER to the ALLPRO family of independent retailers! NAL’S Paint Center has six locations in the Worcester, MA, area!

If you are involved in a community event, special project, charity, or are celebrating a milestone, please share your news with Susie Fontana at susie.fontana@allprocorp.com

Congratulations to the following members on their recent expansions:

VOLUME 5 ISSUE 6

CANPRO DECORATING PRODUCTS COOPERATIVE has added new member POLAR PAINT INC. in La Crete, Alberta, and new store Garrison Village Paint & Decorating Centre in Chilliwack, British Columbia; JC LICHT, LLC has added three new stores, one in Mokena, IL, another in Homer Glen, IL, and the third in New Lenox, IL; MILLER PAINT COMPANY opened a new store in Salem, OR; and SPECTRUM PAINT COMPANY has added three new stores, one in Spring Hill, FL, another in Landrum, SC, and the third in Savannah, GA.

ALLPRO Leadership board president Mike Weber Executive Vice President Mike Beaudoin Vice President of Merchandising Scott Morath Chief Financial Officer Jonathan Garrett Marketing manager Susie Fontana

About ALLPRO Independent

How to Reach Us

We are a bimonthly publication dedicated to strengthening the ALLPRO community with relevant stories and news. Your suggestions, opinions, and feedback are encouraged.

Write to us at ALLPRO Corporation 4946 Joanne Kearney Blvd., Tampa, FL 33619 Or contact us at 813.628.4800 or by email at allpro@allprocorp.com All publishing services provided by Gallon Creative www.galloncreative.com

on the cover: Painters Alley's Melissa Mong (store manager)

(Continued from page 3)

long-standing suppliers also have for the group. It was born over decades of working together in all times to help each other. For as many stories of members doing amazing things in their communities during COVID-19 times, there were quieter stories of the group also helping suppliers. Helping them navigate the most unique times

to ensure that they are profitable and can continue calling on the members and offer them great products. It is what separates us from other channels. We are tied to the suppliers on many levels and their success matters just as ours does. As we transition to a new year where the pendulum will change, let’s

continue our trend of working together and helping each other navigate. Let’s partner with the suppliers who partnered with us and support them, just as they supported ALLPRO. I look forward to finishing 2022 strong and meeting the demands and making 2023 an incredible year.

Pictured: Will Atkins (manager of Homewood, AL location), Daryl Carr (owner) 6

November/December 2022 | ALLPRO INDEPENDENT

SPOTLIGHT | PRE SE RVE PA IN TS

preserve paints aryl Carr has been involved with the paint industry in some capacity for nearly his entire life. When his father retired from the family paint business, New Look Decorating Center, Carr took on the responsibility of managing one of the two locations before they consolidated. Alongside his brother Brian, he co-managed the remaining New Look Decorating Center location— which Brian still runs today—before deciding to take a self-proclaimed leap of faith and leave the business. Fifteen years ago, he purchased a business in an entirely different industry—in power equipment—and bid adieu to paint before eventually returning and opening the first Preserve Paints location in Alabama. “We opened our first two stores in our first year, and then two years ago, opened our third location,” he says. “A lot of the timing in opening new locations has been around opportunities - in particular, as markets became available.” When he returned to the industry, he took advantage of previous contacts and hired people he knew he could trust to manage his stores. Trust, he says, is paramount to success in this business. “I’m guilty of wanting to do everything myself, but a lot of times, I simply give the managers the direction they need, and they know it’s their job to see it through,” he says. “I’m very fortunate to have a lot of experienced people. I try to make sure that everyone is knowledgeable - and likes working here - so they can convey all of that to the customers.”

Images: Amanda Dyer Photography

With that trust comes a supportive work environment that includes bonuses and perks like traveling to conferences, including the fall 2022 ALLPRO stockholder meeting in San Antonio. “I let my staff know our bottom line and sales volumes, so they know where they stand,” he says of his transparency. “I set a range of profits they can play with, and they have some flexibility and freedom there.” In addition to his team, he attributes the company’s success to the support of their main supplier, Benjamin Moore. “Without their Branching Out program, it wouldn’t make any sense for us to grow - that’s been key.” The discounts they receive through their ALLPRO membership are also beneficial. “We’ve bought some different items - like sandpaper, for example - that we otherwise wouldn’t have taken on. Small items like that may not be our best-selling products, but when people come in, they’re truly in a one-stop paint store.”

November/December 2022

| ALLPRO INDEPENDENT | 7

Like many retailers in the industry, when the COVID-19 pandemic hit, Carr feared for the future of his business, but was pleasantly surprised by the impacts. “I first thought I would be out of business, but then weeks later, I thought I couldn’t keep up! Everyone was doing projects at home. Even supply chain issues felt like a stress test to see if we could survive, and we did. Hopefully we’ll retain all of this new business.” Growing up in the industry, Carr continues to learn new lessons through its ebbs and flows. “There have been times when there has been stress, but it hasn’t really been my personal stress,” he says. “Challenges like staffing shortages, new competitors, and the economy drop have made it easier for me to not overreact when things happen.” As for the future of Preserve Paints, he says opening additional locations is a definite possibility, with his son planning to take over the family business once he retires. That growth, however, hinges on finding the appropriate staffing resources. “I’d like to continue to grow, but finding people may kill those aspirations,” he says. “This business takes quite a bit of training to get people up to speed.” His advice for those hoping to enter the industry: “You need to be capitalized. If you start upside down, you can’t play the game. Know there will be highs and lows and press on every day.” Q: E arly ri se r o r n i gh t owl? A: The older I get, the earlier the riser! Q: W h e n you ’re n o t a t wo r k, wh a t c a n w e f i nd you d o i n g? A: I’m a pilot so I spend a lot of time flying – or thinking about flying. Q: I f we came to your city, we shouldn’t leave without doing what? A: Going to a baseball game. We have a beautiful city with rolling hills and trees, and lots of history with the steel mill. Q: What’s your favorite paint color and why? A: White Dove. I’ve flipped a lot of homes, but I’m not a professional painter and that color is very popular. Q: C raziest paint spill you’ve had to clean up? A: An 18-wheeler load that dropped down a foot before all the paint fell off.

November/December 2022 | ALLPRO INDEPENDENT

Pictured L to R: Will Atkins (manager of Homewood, AL location), Jim Carra (sales team), Ash Atkins (sales team), Daryl Carr (owner), Cody Foster (assistant manager).

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November/December 2022 | ALLPRO INDEPENDENT

SPOTLIGHT | PAI NTE R S A L L E Y

painters alley atthew Lambert has been involved with Painters Alley since the day his parents purchased the store in 2005. Several years ago, he took over ownership and has since grown the sole location to five. “I always tell people, ‘With the second store, I learned everything NOT to do,’” he laughs. “That was a huge learning curve for me, learning how to manage multiple people and businesses.” Now with locations in Oak Harbor, Freeland, Anacortes, Stanwood, and Arlington, Painters Alley helps people across Washington with their painting and staining projects. “We typically carry the same stock across all of our stores, but we will diversify based on customer demand. If we find the volume is there, we’ll special order and test out a product to see if we stock it.” A painting contractor, Lambert’s father taught him the paint side of the business, such as selling, matching, etc. Support through ALLPRO was essential as Lambert learned how to run the back end. “I’ve learned so much from the other members who have helped me make my business more profitable and run more efficiently,” he says. “That’s really benefited me as I haven’t been around as long as some of the other members.” He also cites the discounts available to ALLPRO members as a bonus, in terms of impacting his bottom line and profitability.

Images: Cynthia Woerner Photography

Benjamin Moore has also proven to be a supporter through the years. “They have helped me a tremendous amount in growing my business through all of the bumps and hurdles over the years,” says Lambert. “I don’t know if I would be here if it wasn’t for them.” Teamwork is a cornerstone of Painters Alley’s success. Finding the right employees has been integral, particularly given the stores’ unique geography - three of the five locations are situated on an island. “We have a very captive audience, so we need staff who really want to be all in. You can’t grow unless you have a team behind you,” he says. “As a leader, I stay out of my staff’s way and let them run their stores under our expectations, and that has made a big difference in morale and the success of each store.” Most of their staff came into the business with strong backgrounds in customer service, with Lambert and suppliers teaching them everything they need to know about the paint industry. “We’re very tightknit, like a family, at Painters Alley. Everyone gets along and works well together. There’s a lot of friendly bantering between the stores as to who’s doing better each day.” November/December 2022

| ALLPRO INDEPENDENT | 11

His passion for the industry shines through when giving advice to those interested in entering the business. “I would tell them that they must have their heart in it. You’ve got to be willing to help people and put the effort in because it comes back around. It may not be instantaneous, but this isn’t an instantgratification type of business,” he says. “You have to be patient, and it’s very rewarding if you are.” In terms of the future, he looks forward to continuing to grow, opening more stores, and expanding their product offerings - plus, further exploring the benefits of his ALLPRO membership. “I’d recommend this group to anybody that I can.” Q : ear ly r is er or n ight owl ? A: Early riser. Q: W h en you ' r e n ot at wo rk, what can we f in d you d oin g? A: Spending time with my three kids. Q : What' s you r favor it e paint co lo r? A: Benjamin Moore Hale Navy. Q: W h at t ype of mu s ic is typical ly playin g in you r s howro o m/o ffice? A: Sports radio. Q: C r az ies t pain t s pill y o u've had t o clean u p? A: Someone dropped a pallet of paint off his truck, that wasn’t for us, in our parking lot and refused to clean it up. I had to clean up 100 gallons!

Pictured: Matt Lambert (president), Melissa Mong (store manager). 12

November/December 2022 | ALLPRO INDEPENDENT

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DAILY MIX | A LLP R O TA LKS

ALLPRO

TALKS With Ken Morton, Canpro Decorating Products Cooperative

After starting in the paint industry at only 16 years of age, successfully owning his own independent paint store for 15 years, combined with his close connections in the industry, it’s no wonder Ken Morton came out of retirement to

ALLP R O I N DEPENDENT : w h at wa s yo u r f i r s t j o b ?

KEN MOR TO N: My first job was as a 16-year-old kid working in a hardware store that coincidentally sold Benjamin Moore paint. I was just a kid looking for a job. I stayed working there through university.

AI : Di d you st ay i n t h e p a i n t i n d u s t r y aft er uni v e rsi t y? KM: I graduated as an accounting major with my Bachelor of Commerce, and I was looking for a job. I was actually working in the hardware store and Ed Makarenko, who owned Fargeys at that time, happened to come into the store, [found out I was looking for a job] and hired me as an accountant. After probably six months or so, I decided that I didn’t like doing accounting all day every day. They were happy enough with me that they [offered me] a position where I did accounting for part of a day and then helped with running the paint side of things. So, that’s really where I started in the industry. AI : H ow d i d you ge t i n vo lv e d i n C a n p r o? KM: Ed was one of the original founders of Canpro, so I was exposed to Canpro since its inception. And through the accounting 16

November/December 2022 | ALLPRO INDEPENDENT

run Canpro Decorating Products Cooperative. We sit down with the managing director to hear all about his history in the retail paint market and his goals for the future of the business-to-business buying cooperative. side, I saw what Canpro was and what they were doing and kind of grew up with being part of the business. I worked with Ed for probably 12 or 13 years, and at that point, I progressed to where I was helping with managing the store and accounting and decided if I was going to do that, I should be doing it for myself and not for somebody else. So, I decided to open my own store just outside Edmonton, in Sherwood Park. We were looking at about a year’s time for the building to be ready and to get everything set up. Bob Pringle, who was another founding member of Canpro said, ‘If you move up here and you need work, come work for me for a year until your store is ready.’ So, I went and worked for Bob for a year and then ran my own store for about 15 years. And it was very successful and did very well for me. After 15 years or so, somebody offered me a significant amount of money [to purchase my store], so I sold my store and kind of retired for a few years. I got a little bored, because I retired at 50 years old, and decided that’s a little young to do nothing and decided I wanted to go back to work. And that coincided with Canpro deciding that they wanted a different direction for the group as well. So [three years ago] I was brought in because I knew Canpro and had grown up around it.

AI: What has been the key to your career success? KM: I think it’s treating everybody as fairly and equally as I can. It doesn’t matter whether you’re a small store, doing smaller volumes or you’re the largest member, I want everybody to get the same treatment and the same benefits from our group. I don’t think that one of our members is more important in any way than another member. They’re all important. They’re all shareholders. They’ve all committed to the group. And I think even going back to the days when I ran my own store - every customer is important. And to me, every shareholder is important. And I think that’s a big part of why I’ve had success throughout my career is that’s really what my outlook is. AI : Do you h av e a b u s i n e s s go a l t h a t y ou ’ r e c ur r e ntly work i n g t owa r d s ? KM: I want $200 million in purchases. That is my short-term goal - I want to go over $200 million with ALLPRO in 2023. AI : H ow h as you r i n vo lv e m e n t i n C a n p ro an d AL L P RO i mp ac t e d y o u p e r s o n a lly ? KM: It gives me purpose every day. I love my job. A big part of my job is talking to members and talking to vendors and just trying to make our programs work for everybody. This industry is a great industry. We have fantastic shareholders and fantastic vendors. I love what I do, that’s why I’m back doing it. AI : C an you t e l l m e a b o u t t h e c o n n e c t ion s or r elati onsh i p s t h a t y o u h a v e c r e a t e d ? KM: With ALLPRO, I work to make our partnership better all the time. I’m constantly talking with Mike [Beaudoin] about various aspects of the business and just growing our two businesses. I think that’s a huge thing - working together for the better of all of us. I know most of the store owners across the country because I was one of them for many years. More and more, I’m getting to know our members personally, and of course they’re all fantastic people. We’re really a big family up here.

AI: D o you at t en d t h e ALLPR O events? Any high ligh t s fr om an y pas t even t s? KM: I attend all ALLPRO events that I can get to. I have missed significant meetings that I wanted to go to over the last couple of years, including the Bahamas, of course. And Nashville. I cannot believe that COVID-19 caused me to miss those meetings. Now we’re back. I’m going to the ALLPRO meeting in San Antonio this fall, I’ll definitely be at Phoenix in the spring, and I refuse to miss Dublin in a couple of years. AI: D o you have a favor it e ALLPR O-branded pr od u ct ? KM: I wouldn’t say one particular favorite, but I am the biggest fan of the ALLPRO label. I truly believe that the ALLPRO label will continue to give our retailers an advantage in the marketplace. I talk to my members constantly about the advantage the ALLPRO label can give them because they cannot buy the ALLPRO label anywhere else. Canpro buys the ALLPRO brand better than anywhere else. We support the ALLPRO brand hugely. AI: What d o you lik e t o d o in you r free time? KM: I am at home in the bush and the mountains. I grew up in the West Country of Alberta. I spend a ton of time in the mountains and the foothills of Alberta and for me that is where I’m at peace in this world. I love to be out there. We do substantial hiking; we go to Jasper all the time to do hikes. I just went on a 25-kilometer hike in Jasper this summer. I intend to do a 45-kilometer two-day hike in Jasper next summer - 25 kilometers will be above the tree line. It’ll be an entertaining one. AI: What wou ld ot her Can pr o an d AL L PRO memb er s b e s u r pr is ed t o lear n abo ut yo u? KM: I opened up my leg with a chainsaw about three weeks ago. I got extremely lucky and did no significant damage anywhere, but definitely have a war wound and gross pictures to show people. AI: What is you r f avor it e pain t co lo r? KM: Blue.

F ast as t F i v e :

T ALKS SK Po ol or b ea c h ? C oke or P e ps i ?

b e ac h

pepsi

Base b all o r f o o t b a l l ?

hockey

E ar ly b i r d o r nig h t ow l ?

n i g h t ow l

n e u tr als o r b o l d c o lo r s?

bold

Nove mbe r/De ce mbe r 2022

| ALLPRO INDEPENDENT

INDEPENDENT | C A N P R O

Cross-Border Collaboration Canpro and ALLPRO’s partnership is a perfect paint match

wo is truly better than one - especially when it comes to paint cooperatives. For the past 20 years, ALLPRO and its Canadian affiliate, Canpro, have been proving this point, leveraging their partnership to grow their groups and meet new goals. Canpro, like ALLPRO, is a member-owned cooperative, formed to compete with large retail chains and to provide independent paint and decorating dealers with additional buying power - better prices, preferred terms, and volume rebates that would have been unobtainable by an independent retailer. “Canpro is a member of ALLPRO as they are a group within a group,” explains Michael Beaudoin, executive vice president of ALLPRO. “They are focused exclusively in Canada and specialize in helping us offer competitive Canadian programs that benefit all members in Canada.” “We have members across the country - from Vancouver Island right through to Quebec,” explains Ken Morton, managing director of Canpro Decorating Products Cooperative. “And we’re really the leaders in the independent paint channel across the country. Our stores tend to be the largest stores in Canada, larger groups of stores as well. That’s really what fits our model - the more progressive stores. That’s really who our shareholders are.” According to Morton, when Canpro was formed 25 years ago, it was very much modeled after ALLPRO, with the five original founding members of Canpro gleaning information from ALLPRO representatives to form their own group. It wasn’t until five years later that the two groups combined efforts and established a partnership. Canpro started looking at U.S. vendors with interest in buying direct from manufacturers operating south of the Canadian border. “There’s a lot of products produced in the U.S. or a lot of companies in the U.S. that may import from other areas and then ship out to all the stores in the U.S.,” Morton explains. Conveniently for Canpro, ALLPRO was interested in expanding its membership base and acquiring new members across North America, specifically in Canada. A partnership was the clear course forward. And while the two groups share similar mandates, there are still a few differences. “We definitely have our large members as well, but overall, our member stores are smaller stores than U.S. stores,” explains Morton.

November/December 2022 | ALLPRO INDEPENDENT

But that doesn’t mean Canpro Decorating Products Cooperative is all small potatoes. Since its inception in 1996, ALLPRO’s Canadian affiliate has grown to more than 200 leading retailer store fronts from across Canada with sales in excess of $160 million dollars, making it the largest decorating products buying group in Canada. And since joining forces with ALLPRO? “Since 2002, we have really grown,” Morton emphasizes, adding that the year after Canpro joined ALLPRO, they reached a million dollars in purchases and joined the ALLPRO million-dollar club. After a few years, the Benjamin Moore program was added to ALLPRO’s offerings, which significantly enhanced Canpro’s sales. And then recently, Canpro’s sales skyrocketed. “Three years ago, we hit a big milestone,” he details. “We hit $100 million [in sales] with ALLPRO - with the pandemic and everything else. We’re projecting this year we’re going to hit about $188 million in purchases through ALLPRO.” The growth in the buying group has been beyond Morton’s expectations, with membership numbers also climbing and shareholders experiencing phenomenal growth through the pandemic. “We’ve expanded hugely, and our member stores are becoming stronger and stronger in the market,” says Morton. “We’ve taken a lot of market share away from our competitors. Had somebody told me we would see a doubling of volume in a three-year span, I would have told them that’s not possible in our industry. But yet here we are.” The partnership between ALLPRO and Canpro continues to be win-win. “The partnership allows Canpro access to many additional programs and combines their volume with the rest of ALLPRO, enhancing our ability to offer all members more value,” explains Beaudoin. “They also have access to the ALLPRO billing system (SAP) and all of the resources dedicated to invoicing, ALLPRO shows, warehouses, publications, and more.” “ALLPRO provides our members with a lot of access to a lot of products that we would have trouble generating ourselves,” Morton adds. “What’s good for us is good for ALLPRO and what’s good for ALLPRO is good for us. And I really view them as a partner in this, not another buying group that we deal with. They’re our partner in all of it.

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INTRODUCING: BENJAMIN MOORE’S COLOR OF THE YEAR

RASPBERRY BLUSH 2008-30

BENJAMIN MOORE’S COLOR OF THE YEAR IS MUSIC TO OUR EARS! A rich, vivacious shade of coral tinged with pink, Raspberry Blush 2008-30 is sure to shake things up in the paint world. Like music, color plays a dynamic role in self-expression. This showstopping red-orange makes a bold statement and encourages everyone to bring a little color into their homes, along with the company’s full Color Trends 2023 palette. Striking a chord: To commemorate Raspberry Blush, Benjamin Moore enlisted electro-funk duo Chromeo to create a song that celebrates the positivity and enjoyment of life that both color and music influence. Check out the uplifting ‘Raspberry Blush’ by Chromeo, and eight curated playlists dedicated to the new palette, on Spotify.

Suggestions for your color seeking customers: • Step away from neutral hues by adding a bold pop of color to your powder room. • Consider incorporating Raspberry Blush into social spaces like the dining room, pairing the statement color on walls with neutral furnishings. • Paint an arch, accent wall, ceiling, or wainscotting for an unexpected burst of energy in a room. Some neutral hues to pair with Raspberry Blush and the rest of the Color Trends 2023 palette: Etiquette AF-50, White Heron OC-57, Gray Owl OC-52, and Onyx 2133-10.

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November/December 2022 | ALLPRO INDEPENDENT

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INDEPENDENT | COT Y

INTRODUCING: PPG’S COLOR OF THE YEAR

VINING IVY PPG1148-6

AFTER MUCH ANTICIPATION, PPG RECENTLY UNVEILED ITS 2023 COLOR OF THE YEAR. For the second consecutive year, PPG has selected a shade of green, this time a rich and jewel-toned choice the company expects will set the tone for a wide range of consumer and industrial applications. A deep and woodsy forest green with shaded aqua undertones, Vining Ivy PPG1148-6 lends itself to multiple applications for both interior and exterior. Symbolic of deep water, the regal hue takes its inspiration from nature and the idea of connection, lending a calming yet invigorating vibe that perfectly encapsulates a new start after we collectively emerge from a challenging few years. Whether your customer is looking for a contemporary or more traditional look, the versatile blue-green is a captivating color option.

• Pair it with deeper-toned woods or off-white trim. • Use it in rooms where you relax and unwind, like a living room or bedroom. • Try incorporating it into kitchen cabinetry. • Go bold by painting exterior front doors for an unexpected pop of color. PPG recommends Alpaca Wool PPG14-19, a soft, subdued, caramel yellow as a possible accent color.

Suggestions for your color seeking customers:

BUZZWORDS AND PHRASES YOU CAN USE:

• Create a dramatic look by painting it on all four walls of a room or adding it to an accent wall or ceiling.

•

Energizing, yet grounding

•

Calming and restorative, yet modern and vibrant

•

Bolder, more expressive than recent softer neutrals

•

Rejuvenating

November/December 2022 | ALLPRO INDEPENDENT

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Price increases As with most industries, inflation is posing a challenge for paint retailers, with rising prices making a growing impact. While some reasons for price increases may lessen as we continue to emerge from the COVID-19 pandemic, others may be here to stay for a while. Rising merchandise costs are only the beginning. From labor shortages to increases in transportation and fuel costs, retailers are feeling the effects. Understanding the causes behind rising prices is critical before implementing strategies to deal with them.

November/December 2022 | ALLPRO INDEPENDENT

We’ve compiled a few of the reasons behind price increases, as well as some tips to deal with the hurdles.

Labor issues As many in the industry already know, retailers are facing challenges related to attracting, hiring, and retaining staff. “Our wages have also skyrocketed, so we have to encapsulate it in our pricing,” says Jim Mallory, owner of Mallory Paint Store in Washington and Idaho. Investing in staff retention can help combat the effects of the labor shortage. By creating a solid recruitment and talent management strategy, and developing a positive workplace culture, you can help reduce turnover.

Inefficiencies within the business No one likes to think of any aspect of their business as inefficient. But many businesses have inefficient practices or workflows that contribute to killing their profit margin, potentially necessitating price increases to make up the difference. Map out your current processes to identify these inefficiencies and help you look for ways to optimize your resources and operations. (See our piece on profit-killers on page 30.)

Changing consumer demands

“Any vendor will point to raw materials and logistics like transportation [as some of the main causes of price increases],” says Joe Helm, owner of Helm Paint and Decorating in Louisiana. “A price could be X one week and the next week, it’s twice that price, and the material will be more expensive to get to me. Multiply that by every type of material and it’s going to add up.”

Knowing when the time is right Raising prices is never an easy decision. If done improperly, customers may seek out other retailers for their paint purchases. The key is to be strategic when raising your prices by fully analyzing the situation and arming yourself with as much information as possible to make an informed decision.

Check out your competitors

Keep an eye on your inventory

As more people stayed home during the pandemic, the demand for renovation-based materials like lumber jumped—as well as the prices.

Consider which products or services are facing the biggest impacts from inflation. Instead of implementing broad price increases across the board, take a deep dive into different product segments.

Production, transportation and supply issues

“There are many different price levels so you can tweak price points where needed,” says Helm. “One of our strategies is that if you have a homogenous type of product, you must be competitive with its prices.”

With rising costs in raw materials, manufacturing, and transportation, many retailers have been left with the difficult decision: Do we need to pass these costs to our customers?

He also suggests buying in bulk if possible. “There is nothing we can do directly to stop

Check out your competitors

Be aware of your competitors’ pricing as well as how they’re promoting their products. “It’s a competitive world and we need to stay competitive by shopping at other businesses to see what we’re up against,” says Helm. “This way, you know what you’re offering and can justify your prices.” logistics costs because we don’t control that, but we can buy in larger amounts so we can offer products at a lower price,” he says. “There is a risk in doing that, but we can reduce the risk by buying products that we consider products that deliver on a consistent basis.”

Make sure your pricing is fair

Research has shown that in addition to the size of a price increase, perceived fairness is also a driver of how customers may react. If your prices are significantly higher than other retailers, you may need to take a hard look at them to ensure they’re fair. “You can take a commodity item and look at the price [at a large retailer] to make sure your prices are in check,” says Mallory. “You can also leverage their prices to show how they’re charging the same price as you.”

November/December 2022

| ALLPRO INDEPENDENT | 27

How to raise your prices — the right way

So, you’ve made the decision to raise your prices. Now what?

To keep customers happy, you should: Be honest and transparent

If your business is raising prices, be transparent and upfront about the increase to maintain trust with your customer base. Be specific about why the increase is happening. Because of rising costs in other areas of their lives, customers will likely understand the reasoning behind it and may even come to expect it. “What works best for us is being transparent with our customers and letting them know that increases are coming—not only from one vendor, but also industry-wide,” says Chris Hamm, owner of Harrison Paint Co. in Louisiana. “We use examples like the rising grocery store prices to show how much prices have increased due to general inflation across every industry.” “Try to take it person by person, case by case, to explain where the pricing is heading,” agrees Mallory. “Sometimes, I have to lay out all of the cards and show them exactly where the costs have grown.” Finally, make sure your team is also prepared to answer customers’ questions so your brand messaging is consistent, no matter who your customers talk to.

Maintain quality customer service

The importance of a positive customer experience cannot be overstated. Even if your prices are increasing, your customers are more likely to stick around if they have a good experience with your business. “We will always serve at high levels, no matter the price,” says Helm. “We look at service as our number one differentiator. What the pandemic and supply issues did for us is allow us to expose the real difference in buying from our business as opposed to a big-box store.”

November/December 2022 | ALLPRO INDEPENDENT

“ The biggest issue is the potential for flack from customers or even the risk of losing them over pricing,” says Mallory.

Looking ahead With a solid strategy in place, as well as a little time and effort, retailers can turn the challenges associated with price increases into the opportunity to deepen customer relationships. “Everything comes down to the decision of the consumer anyway,” says Helm. They are, however, hoping for open communication from manufacturers to help them prepare for significant price increases. “Price increases are so dynamic, but I’d like to have as much of a heads-up as we can possibly have, as well as more consistency wherever possible,” says Mallory. “Everybody—across all industries—is feeling the ramifications of price increases,” adds Hamm. “If prices continue to rise, I’d like to see increased communication and transparency from vendors and manufacturers.”

November/December 2022

DID YOU KNOW? According to a U.S. Bureau of Labor Statistics September 2022 inflation report, consumer prices rose 8.2% in the last year.

| ALLPRO INDEPENDENT | 29

INDEPENDENT | P R OF I T K ILLE R S

How to avoid common profit-killers Are your profits sluggish - or worse?

Use technology to your advantage

Despite your best efforts, you may be the victim of inefficiencies within your business - otherwise known as the dreaded profit-killer. Though some of these inefficiencies may seem insignificant, when combined, they can make quite an impact on your bottom line.

There are plenty of tools and software to help you optimize your operations and determine the location of your profit leaks. Poor time tracking, for example, is a leading profitability killer. Similarly, poor workflow processes can lead to inefficiencies with your team - costing you money. Putting new systems in place can help you improve your planning, manage your resources effectively, and maximize your revenue.

Some easy-to-spot profit-killers: tax bills, interest accrued from misused credit, and other fees or fines. Here are some additional profit-killers to be aware of so you can take action to reduce their impact:

Pricing < true costs Don’t underestimate your expenses when setting your prices. Remember to account for direct and indirect costs, particularly in a time of rising inflation. Choose a category (such as sanding tools, caulking, or roller sleeves) or a department (primers, topline architectural coatings, or exterior wood stain) to focus on each week. Determine your true costs, or better yet delegate this task to a team member who might feel valued given this added responsibility, and examine the pricing. Can you round up? Can you implement a small % increase based on your competitor's price range?

Lose the underperforming products When considering the profitability of your products and/or services, you may be surprised to see that some actually cost you money. By getting organized, you can identify those items and consider your options to help you sell items for which there is demand. Mark it down and move it out! Make a sale table, section, or display and spend a few dollars on some catchy signage (you can use this repeatedly). Remember, you have a captive audience while paint is shaking and everyone loves a bargain. Direct people to browse the deals you have and remind them to consider future projects and gift giving while they shop.

November/December 2022 | ALLPRO INDEPENDENT

Put this on your schedule. Pick a day each month or each quarter and commit to reviewing a system or process. You can involve staff by asking them (in advance of this diarized date) to submit processes they find cumbersome or problematic and then ask for input on potential solutions. Form a new plan of action and communicate the policy – if you did this once a month your business would be 12 times more efficient in a year! *Remember to give credit where credit is due if an idea came from your team.

Manage your customer relationships Maintaining a positive relationship with your customers can help ensure they pay you on time. Make sure your contracts clearly stipulate when payment is due and, if services are provided, what is included to avoid scope-creep. Finally, always double-check to ensure your client billing is accurate. This is a quick and easy one. Review the dunning messages on your statements right now. Put the magazine down and go. Is it clear and concise or should you take a minute to tighten it up? By reducing the number of profit-killers affecting your business, and ensuring you have the proper measures in place to prevent them in the future, you can help your business continue to grow with a healthy bottom line.

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Cash is king

ALLPRO members share strategies for managing cash flow A few of your contractor customers haven’t paid their invoices and you aren’t sure when their payments will arrive. Simultaneously, vendors and suppliers are following up with you to pay your own invoices. For the independent paint retailer, this is an all-too-prevalent cash-flow pickle. With many small businesses still in recovery mode from the economic impact of COVID-19, the term “Cash is King” is integral now more than ever. Cash flow is the backbone of any business. Positive cash flow means you’re earning more than you spend. Without cash flow, there is no paint or supplies to sell, no employees, no advertising or marketing, no expansions. Monetary shortages rise to the surface when store owners don’t have a clear picture of what payments are expected and when and how much of their current funds are allocated to inventory and other expenditures. Managing cash flow can be difficult to achieve and one of the biggest obstacles business owners face. But proper cash-flow management is a critical factor in the long-term financial success of your paint store. We reached out to a few ALLPRO members to share their best practices for improving cash flow and better managing their business. CAS H IN ON CAS H D IS COU N T S If a vendor or supplier has promised an incentive, such as a reduced price or small percentage in return for paying a bill before the scheduled due date, take advantage. Visit the ALLPRO University tab on the website to learn how to receive your maximum discount by watching “The Discount Stack” module. “The biggest thing is making sure you are getting all of your cash discounts. Even if you need a bit of financing, typically the cash discount is significantly more than what you are paying for financing.” - Ken Morton, Canpro Decorating Products Cooperative “We always take our discounts, which are subtracted from our cost of goods, so our true COG is 1.5 to 2% lower. Over a year’s time, that amount is substantial.” - Clement Ebbo, Clement’s Paint “We make sure we are taking advantage of any discounts available through payment terms with vendors. That extra percentage adds up quickly over time.” - Sean Paul, Dugan’s

November/December 2022 | ALLPRO INDEPENDENT

BANK ON BUL K P U R C H A S E S & S U P P LI E R S PECIALS

T R IM N ON - PR OD U CT IVE IN VEN T OR Y

Whether it’s busy season specials or an event that brings out the best deals (such as the ALLPRO shows), plan your bulk purchases around those dates. Speak with your suppliers to see when they offer their deepest discounts and do your research and math to ensure the wholesale order meets your store’s cash flow requirements.

If your stockroom is home to a large number of products that don’t sell well, look at where you can cut back on your inventory. Products collecting dust hurt your cash flow, as the money you’ve spent to acquire them hasn’t turned into revenue. Adjust your inventory as needed, selling infrequently purchased products at discounted rates and spending more on items that are commonly purchased.

“Our bulk purchases are always at the ALLPRO shows. Suppliers offer deep discounts and some of them offer dating as well.” - Clement Ebbo, Clement’s Paint “There are also situations where you have to stock up with larger purchases to take advantage of the deals.” - Sean Paul, Dugan’s “During the year, we always take advantage of supplier specials that can range from 5% to as much as 20% off from time to time.” - Clement Ebbo, Clement’s Paint C OL L E C T YOU R C A S H Once you make the sale, the work isn’t done. Make sure you invoice customers in a timely fashion. A key reason cash flow is integral is that it differentiates between invoices sent and invoices paid. A paid invoice means money is available to cover expenses. “Make sure you are collecting your money. Most retailers give great terms to their contractors, so you need to make sure they are living up to your payment terms.” - Ken Morton, Canpro Decorating Products Cooperative “It is important to keep on top of all past due accounts. We review our past due aging report weekly. Follow-up calls are made every 7-10 days.” - John P. McKenna, The Paint Shoppes

So, how do you determine what inventory gets the boot? Keep your eyes and ears open, listening to your sales staff and conversing with customers who can give you insight into your sales forecast. And consider investing in an inventory management system or buying tool. Many programs will help you with overbuying or underspending, taking care of inventory orders and giving you a better understanding of your cash positions. “Set up max-min inventory systems and use historical trends when purchasing inventory to make sure you are only carrying the necessary inventory at the time.” - Sean Paul, Dugan’s While rent and utilities are fairly fixed, inventory can be fluid and worth correcting. As one of the highest expenditures in retail, having the right products on hand at the right time will put money in your pocket when you need it most. “We will commonly work with our vendors or other dealers on items that look like they may become obsolete or not sellable in our market. If we can identify the trend fast enough, we can often times offload the product at cost and replace with product that will have a better turnover.” - Sean Paul, Dugan’s “You can’t sell what you don’t have. Do not let your inventory levels cost you sales. A lost sale can end up losing a customer.” Ken Morton, Canpro Decorating Products Cooperative “Obviously, another way is expense control.” - Clement Ebbo, Clement’s Paint

DID YOU KNOW? A recent study from Intuit indicates that nearly one-third of small businesses surveyed are unable to pay vendors, loans, make payroll, or pay bills because of cash flow issues.

November/December 2022

| ALLPRO INDEPENDENT | 35

R ES T R U CT U R E PAYMEN T S & COLLECTIO NS Take a close look at your payment and collection schedule to see where you can restructure to create a more balanced income for your business. What is your relationship like with your vendors or suppliers? Will they allow you to shuffle your payment dates in order to benefit your bottom line? Shifting how your employees are paid can also create some cost savings. For instance, altering the payroll system to reduce administrative costs or capitalizing on direct deposit can all contribute to small but significant savings. “We have established benchmarks for the average collection period and receivables turnover similar to those of the paint and decorating industry.” - John P. McKenna, The Paint Shoppes “We converted our employees from annual bonuses to monthly bonuses to help smooth out the expenses, rather than having one large expense at the end of the year when our sales are traditionally lower.” – Sean Paul, Dugan’s U S E CR ED IT CAR D S Credit cards can have a bad rap, with their high interest rates and low minimum payments. But there is a silver lining to using a business credit card for your financial practices, including rewards and other benefits that will put money back into your bank account. Credit cards allow you to easily track how much cash is going out, how many rewards you’re racking up, and how you can create a positive cash flow. Just make sure you always make your minimum payments on time. “Use credit cards to pay as many bills as possible. We use a credit card that gets 2% cash back on all purchases with no limits. Small changes to business practices add up to big changes in overall cash flow.” - Sean Paul, Dugan’s MON IT OR WH ER E YOU R MON EY IS GOING Constantly monitor your cash flow so you know how much money your store is bringing in as well as how much money is available to be spent. If you’re too busy on the store floor and cash flow is furthest from your thoughts, consider investing in a tool or accounting software application designed to help you track your business’s money. Or hire a professional accountant to calculate the cash flow for you.

November/December 2022 | ALLPRO INDEPENDENT

Dos and Don’ts for Managing Money in Your Retail Paint Business As a business owner, you wear a variety of hats. On any given day, you’ll be dealing with human resource issues, serving customers, following up with vendors and suppliers, and considering your store’s succession plan. Add managing your small business budget to the mix and it might seem a bit much. Stick to these five simple steps to stabilize your finances and make your store more likely to succeed. DO: MAK E A P L AN While nobody likes to talk about budgeting, successful stores and profitable businesses properly plan their earnings and spending well in advance. Budgeting is the best way to meet profit targets and evade expensive surprises. Once your budget is put in place, it will serve as a model for making positive spending decisions. Just remember to review the budget regularly and be willing to adjust when sales and store situations change.

D ON ’T : OVER S PEN D When was the last time you looked at your store’s spending to see where you could cut down costs? While trimming inventory spending is one part, there are other areas contributing to cash flow conundrums. Take time to identify areas of your company that could be impacting a smaller profit margin. Perhaps you could reduce production costs, cut back on supply expenses, capitalize on team members’ particular skills, and tap into software tools or technology.

DON’T : M I X BUSI N E S S WI T H P LE A S U R E When it comes to your independent retail paint store, some things just don’t go together, like your personal and business finances. Money management gets messy when you don’t keep these separate and you’re more prone to struggle meeting your store targets because of individual expenditures. Same goes for your personal bank account. Make sure your personal finances don’t cross paths with your business affairs.

D O: HAVE A S AFET Y N ET A cash cushion that protects you from your store’s financial hardships will keep you in business during economic changes, industry trends, and unexpected rough patches. Be prepared for the unpredictable with an emergency fund. Even setting aside 10% of annual revenue or tucking extra earnings away during the busy season will significantly support you when times get tough.

D O: M A K E M O RE MO NE Y Sounds obvious, right? Isn’t that the goal of every small business? But there may be multiple ways to increase revenue that you haven’t thought of yet. Consider investing in a better marketing strategy to attract new customers and boost brand awareness, which will go a long way in helping you meet your business goals. November/December 2022

| ALLPRO INDEPENDENT | 37

INDEPENDENT | D E BT

What yo u need to know a bo ut de bt r e fina n ci ng Racking up more and more debt? Having trouble making your payments? n many scenarios, businesses may consider refinancing their debts to help them achieve their goals and streamline their monthly payments. Refinancing allows you to restructure your debts to make for potentially lower monthly payments and help you better manage your cash flow, giving yourself some breathing room and enabling your business to grow. If you’re considering a debt-refinancing plan: Crunch the numbers Before you explore refinancing your debts, it’s critical that you review your financial situation and budget carefully to understand what the issues are and prevent them from popping up again in the future. Review your current debts Take stock of everything your business currently owes (and to whom) and the interest rates. You should know the ins and outs of your current debts before proceeding with a refinancing plan.

Consider any penalties Potential savings may be thwarted by prepayment penalties. A bank, lender, or financial professional can help you determine if refinancing is the best option for your business or if there are any penalty-free options to consider to help make your debt more manageable. Get organized Before moving forward, make sure you compile all of the documentation and information you will need to refinance, including a list of debt, tax returns, and even sales projections. Don’t forget—debt is still debt While refinancing may help you pay off your debt faster, that doesn’t mean you have free reign to rack up more debt. Keep a close eye on your financial health! If refinancing is right for your business, it will give you more flexibility with your finances.

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Networking with

1. He’s an entrepreneur at heart Paul may have received his BA and Master of Accountancy from the University of Missouri, but while he was working with numbers, he was envisioning a role as an entrepreneur. “As a CPA in public accounting, I was learning as much as I could about how successful companies operated," he says. "After seven years of public accounting, I was ready to branch out into industry. So, in 2015, I took a position at Dugan’s and learned from the ground up. I worked in the paint department, flooring department, warehouse, and management.” After six years, Paul took the ownership reins and is now focused on the business’ daily tasks and making sure his employees have what they need to do their jobs well. “I spend a lot of time looking at new product lines and geographic locations for growth. Between dealing with day-to-day challenges, pricing of products and services, technology needs, HR, employee recruitment, advertising, donations, budgeting, and everything else, there is no shortage of things to do. I do the best I can to delegate to the appropriate employee that has the tools to make the correct decision.” 2. He’s a people person Though Paul is passionate about growing the business, he says the best part about the industry is the people and seeing their successes - everyone from his employees, customers, colleagues, and other ALLPRO members. “My favorite part of working in the paint business is definitely the relationships and experiences that I have been able to be a part of. From our customers to other ALLPRO dealers, there are amazing people in this industry that all want each other to be successful. One of my favorite things is working with new businesses, painters, and flooring contractors, to advise them on how to get set up and operate properly. The way I see it is this; If I can help them be successful, they will be our customers for years. It’s a win-win.” 3. He shares success with his employees At the end of his first year of ownership, Paul experienced his proudest work-related moment when running his employees’ bonus numbers. “We have employees who are on commission and some of them had an amazing sales year," he explains. "I am super proud that we have a successful business that is able to share success with our employees. I never dreamed that we would be able to pay people as much as we do.”

Get to know goal getter, amateur golfer, and NextGen retail member Sean Paul Sean Paul’s entrepreneurial spirit and support for ALLPRO’s next generation of independent retailers aren’t the only things that make him a valued member of the group. As a hardworking CPA, Paul took a position at Dugan’s and learned every role from the ground up. Now the leader is working hard to support his employees, guide new businesses, and strategize how to make his stores as successful as possible - all with the goal of retiring at 50. Here are five other things you might not know about our NextGen retail member from the Midwest.

4. He’s planning an early retirement “I am working as hard as I can to be financially able to retire at 50 years old. Everything I do is ultimately to work towards this goal.” And when he’s not hard at work? “You can find me golfing, riding my bike, or spending time with my family at the Lake of the Ozarks.” 5. He has ALLPRO colleagues on speed dial As a young businessman with plenty of knowledge to impart and gain, Paul knows how important involvement in NextGen is for ALLPRO. “I feel that as a group we are only as strong as our members. I believe that the sooner we can get the next generation involved in ALLPRO, the sooner they will be a force in their respective markets and in turn make ALLPRO a more powerful and successful group. Also, there are many great ideas that come from conversations with the NextGen people that are outside the box of what has traditionally been industry standards.” For Paul, the connections he’s built through the industry have already impacted and continue to influence his career. “ALLPRO has introduced me to many people who go through the same daily struggles that I do every day. I now have many friends on speed dial, so that I can run things by them to see how they have dealt with a situation.”

November/December 2022 | ALLPRO INDEPENDENT

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FIVE FUN FACTS ABOUT ANNETTE SHE’ S A FUR M A M A

When she’s not hard at work ensuring smooth data flow for ALLPRO, Smith can be found walking her four rescue puppies (Bandit, Bella, Bambi, and Buster) - all chihuahua mixes.

SHE’S A NE WLY WE D

Smith has been married to her husband for just over a year. “We have been together for five years; he has three adult children and now I am step grandparent to a sweet nine-month-old boy.”

Annette Smith Joins the ALLPRO family as New Systems Analyst ALLPRO’s newest team member, Annette Smith, has visited every state in the country (except for Alaska), grew up in Massachusetts, has lived in Florida, Nebraska, Idaho, and Missouri, and is now headed back to Florida. The new systems analyst, who joined ALLPRO as a staff member in mid-September, has a depth of experience in EDI (electronic data interchange) and system support analytics, having worked in the manufacturing, retail, finance, warehousing, and pharmaceutical sectors, and for a long list of established companies, including Reebok, Rockport Shoes, PUMA, ECCO Safety Group, and Gordmans, just to name a few. “I have been involved in EDI systems and business processes for over 30 years and I still have a passion for it,” Smith explains. “I know the importance of maintaining data integrity to ensure proper data flow to allow efficiencies throughout the supply chain.” In her new role, Smith will oversee all EDI transaction processes and resolve any transmission issues, in addition to overseeing the ALLPRO Distribution Centers, and understanding the month end closing procedures. “I will become the SME (subject matter expert) on all other supported systems and processes to support the business,” Smith says. “My jobs and functions will change based on the needs of the business.”

November/December 2022 | ALLPRO INDEPENDENT

SHE’S A HARD ROCK L I S T E NE R

Some of Smith’s favorite metal groups are Shinedown, Slipknot, and Godsmack.

SHE’S A TOUGH COM P E T I TOR

“As a kid, I played baseball with the boys for eight years as a utility player.”

SHE COME S FROM A FA M I LY OF S I X

“I am the youngest of four children and the only girl of my parents who have been married over 60 years.”

A few of her favorites F avor it e Act iv ity Traveling and road trips. F avor it e s u b ject American history. Favor it e Mov ie Love Actually. Favor it e B ook The Last Kingdom. Favor it e Colo r Sky blue.

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