Inside Indoff - Indoff's 2023 Q3 Newsletter

CEO Message

Jim Malkus Chief Executive Officer

Welcome to our Q3 newsletter for 2023! Through August, we have a solid shot at posting our best year ever in terms of new orders booked. If you read the weekly Sunday notes (or Friday or occasionally Monday), you know our success has been very broad-based – divisionally, by industry and by product. If you’re not in the habit, I encourage you to read this weekly for ideas on markets, products and new opportunities.

As we looked at a theme for this newsletter, we decided it was a great time to review the number one event of the Indoff year – our acquisition by Global Industrial on May 19. We are four months into our new world, so this edition covers what has been accomplished and what’s on deck.

For our Partners, it’s largely been no change. The single biggest benefit thus far has been access to the Global product line to increase offerings and improve gross margins. An Indoff Partner portal went live on June 19, and here are a few statistics on Indoff’s Global purchases year-to-date:

• Jan 1 – May 19 (purchase date - 4.5 months): 18 Partners purchased $51,000 from Global • May 20 – Jun 18 (1 month): 9 Partners purchased $18,000 from Global • Jun 19 (portal opened) to Sep 19 (3 months) – 90 Partners purchased $622,000 from Global

I think these results show some of the power of this combination – Indoff’s Partners are finding additional sales and gross margin opportunities with Global Industrial’s breadth of product. I believe you owe it to yourself and your customers to familiarize yourself with Global’s products.

Heading into the fourth quarter, our top integration goal is to finalize the eCommerce platform for Indoff. It will basically be a “reskin” of the Global site that Indoff Partners can offer to their customers. Colin is working hard on our side of the equation, and we’ll be working to put together marketing, support and rules of engagement for the rollout.

Rome was not built in a day, and all of the benefits of this combination will not be realized overnight. I’m encouraged by the progress to date and appreciative of everyone’s patience and support. Integration has put a significant strain on many here in the Corporate offices, but everyone has stepped up. I remain convinced that this combination makes us all stronger and better able to service our customers in the marketplace.

I hope everyone is enjoying this early fall season. Stay safe, stay well and thank you all for all you do for Indoff.

Indoff’s Newest Partners

MATERIAL HANDLING

Leon Brown

COMMERCIAL INTERIORS

Karen Gonyea

Jim Thor

Brooke Seibert

Alex Fuller

Indoff’s Newest Corporate Employees

Nate Sonntag Recruiter

Global Integration

Courtney Brazell Director Partner Support & Operations

We’re four months into our new life as a Global Industrial company. We’re still operating as Indoff, we’re still handling billing, collections, Partner support and marketing from the corporate office and we STILL continue to recruit and hire quality Sales Partners. Have we had to adjust to some change? Of course. A number of processes have been changed behind the scenes, but all in all, we’re here and we continue to move forward as a strong company.

From a Partner Support perspective, my goal has been to get as much information as possible in front of our Sales Partners. I’m working internally with Adam Heck in Vendor Relations and Michael Dormagen in Marketing to manage and populate the Partner Intranet with Global Industrial video demonstrations, website training guides, marketing collateral and brochures. We still have a lot of work to do, but we have a really great repository of information and continue to add more information each week. If you haven’t done so, I encourage you to visit the Global Industrial section of the Partner Intranet.

In addition to providing you with the most current and helpful information, we’ve also been managing the occasional challenge that comes with a new acquisition. We’re happy to report that most issues have been minor, but we’re still ironing out specifics when it comes to freight, returns, price fluctuations and product availability. We hope to have all of these issues addressed, or at least have proper guidance on how to navigate them, in the very near future. If you run into any issues, please make myself or Adam Heck aware so we can document the problem and share with Global.

At the end of the day, we’re still getting to know one another and the positives far outweigh any negatives. I hope that our sales Partners will continue to view the Global Industrial acquisition as a growth opportunity and take the time to learn about their wide variety of products.

Keep checking the Partner Intranet for more information. Next up will be Indoff branded catalogs, more detailed product information, a list of product experts at Global and finally, an Indoff branded e-commerce site. We still have a few months before all of this will formally launch, but we are very excited about what lies ahead!

As always, reach out to Partner Support for order entry assistance, procedural questions and tech support. We’re here 7:30 am to 7:00 pm CST Monday through Friday and can be reached at 866-5874648 or via email at partnersupport@indoff.com

Finance & Accounting Update

Julie Frank Executive Vice President & CFO

So here we are, it’s been just over four months since we were purchased by Global Industrial. We went from being a privately held S-Corp to a publicly owned C-Corp. What does that mean for the Finance, Accounting, Credit and Collections departments?

The two words we keep hearing are “Sarbanes-Oxley”. This has been mentioned to us by Global’s corporate accounting group as well as their internal and external auditors. What they are telling us is we are going to be subjected to annual compliance audits that ensure we have the proper internal controls in place to safeguard our assets and comply with financial reporting standards. We have always had good internal controls in place, but we’re about to find out what additional changes need to be made as a public company. Wish us luck!

Another change you may have started to notice is the change to our monthly closing schedule. Global does not operate on a monthly calendar, but rather has 13-week quarters. Each quarter starts with a five-week month and then two four-week months. We are planning to move over to their calendar starting in October, which is a five-week month. We will start the billing month on October 2nd and will close invoicing on November 3rd. We will not be able to back date any of our invoicing, but sales for the first three days of November will be included in your October commission report. Langston will put out reminders as we get closer to those dates.

Finally, in Finance we are getting used to using a new reporting tool to submit our monthly statements and reconciliations to Global. Veronica, Ashley and I have used their tool for the past two closing periods. While it adds a little more time and complexity to our normal closing process, it will save us time in the long run because their various auditors will be given access to review our documentation. We also find and correct mistakes a lot quicker with all the detail schedules we prepare on a monthly basis.

Those are the main changes we are aware of this far into the transition. We’ve had in-person visits from the Corporate CFO and Controller (both named Tom), the CIO and many virtual meetings with their auditors, outside consultants, and other Global department managers. Each month we learn a little more about what it means to be a subsidiary of a publicly traded company and each month it gets a little easier.

If you have any questions about these or other changes, please feel free to contact me by phone or email.

Partner Stories Regarding Global Experiences

Jeff Ross President

You can read elsewhere in this newsletter about some of the integration projects we have going on, but the real measure of success will be in sales. Since June 1, over 90 Partners have purchased more than $600,000 in products from Global Industrial - more than twice as much as in all of 2022.

I asked several Partners for some feedback on working with Global since the merger. Out of 10 responses, nine were primarily positive. The one negative revolved mainly around the fact that the Partner had lost their inside contact at Global; the new system isn’t quite as responsive as their old contact. Here are the comments from the other eight respondents:

I showed a client a stacking chair from Office Star. They liked it but when we went to order 40 chairs, they were not available. I tried to find a replacement that my client liked; when I looked at the stacking chairs on Global Industrial, I found the exact same chair! It was in stock and was well priced. The client and I were thrilled.

Susan da Fonseca

Bill Jacobson

I’ve sold everything from parking lot blocks to safety bollards. All the items I’ve ordered have been in stock with rapid delivery. GM’s on average have been about 25% - 30%+. I chose Global because the items were easy to source. Only one small hiccup with being short on some parts with one order. Once I notified Global, they took care of it, no questions asked, and I had the replacements in 48 hours with no additional shipping charges. Overall, my experiences have been very positive. I have been fortunate to sell several orders using Global Ind. as a supplier. I have sold several smaller ticket items that shipped in 24-48 hours. You can get a very reasonable freight estimate online.

I have sold several random Global items. From spray paint to furniture. My margin and lead times have been all over the place depending on items. I sold 35 air guns at a 23% margin ($350 on Grainger vs $185 on Global). Global’s customer service is slow to get any responses back to me. I had a question about whether or not the furniture came with Allen wrenches to assemble the furniture onsite and have yet to receive an answer.

Since our affiliation with Global, my experience has been a good one. I don’t have to spend hours researching who to get products from. I buy lots of anchors, and they have the best pricing. I can get quotes out to my customers faster now than I’ve ever been able to. I’m a big fan!!!

Brian Kenner

Don Compton

Tim Stine

Shortly after we got set up to purchase their products, I was on an appointment looking at applications for Elec./Hyd. lift tables. I had sold them Presto & Vestil lift tables in the past. I quoted and sold them one # WB293226 32x98 lift, and it shipped in 1 day, and they had it in about 2 days. GIS’s pricing for #WB293226 32x98 lift tables & WB989034 36”x48” lift tables are about half the cost of the Presto-Lifts and Bishamon. Plus, the GIS products come standard with electric toe guards (this is an option with other manufacturers).

One of my concerns was how will these hold up in the long run. However, all of the Global Industrial products carry a minimum of 1-year warranty (same as most manufacturers). In the end, the customer purchased 13ea. WB989034 36x48 lifts that we shipped from stock in NJ. & 14ea. WB293225 32x98 lifts - we shipped the last 2 from NV & they are producing the balance in 8-12 weeks.

I like it that we can get our pricing ourselves online. I still end up calling our customer support folks for the current availability of these items. Sometimes, this can be a challenge, but they are always very helpful.

After you place your orders, you get confirmation that it was received, and you get updates during the process on when it ships and when it is delivered. I feel I have been able to sell the smaller jobs easier at, say, 24 & 25% or more GP & and larger jobs at, say, 18%GP. I feel as long as the quality is good, these products are very competitively priced. I recommend promoting these Global Industrial products to your customers.

Brian Galloway

I have found Global to be a very beneficial source of products to offer customers. In the past, I would spend valuable time trying to find the right vendor at a competitive price and then get a freight quote. Now, I can quickly go to Global’s website and usually find what I need to get a price with freight in a matter of minutes. I have had several orders with Global ranging from lifting slings, wall-mounted and workstation fans and a forklift jib crane. All of my orders shipped quickly, usually within days up to a couple of weeks. I received constant emails with updates to my orders and tracking info when shipped—all with margins ranging from 30% to 60%.

I’ve used Global several times because of the low-cost items being in stock. I made a Global Nexel wire sale at a 40% profit margin where the customer originally requested Metro. I would not have made 40% quoting Metro. This order did have some challenges. First, not all of the material was in stock, but second and more difficult, my shipping instructions were ignored. I can summarize that Global has agreed to issue a credit if the customer ends up balking over the freight charges being high.

Al LaPrise

A second example was the sale of 8 ladders because of the lower cost. Global cost $426.02; Tri-Arc / Ballymore cost $702.60. The freight charge was also substantially lower - $408.27 to ship the 8 ladders. On a prior non-Global order using GlobalTranz for the logistics, 2 ladders had a freight cost of $771.97. I had a 52% margin on the Global ladder sale; I earned 17% on the Tri-Arc ladder order. It pays to check out Global.

I sell standardized items such as storage cabinets, file cabinets, and cash drawers to a national customer. All items are typically in stock or have short lead times, making it convenient for me and my customers.

Global Industrial’s commitment to keeping items in stock or providing short lead times has been invaluable. It allows me to promptly meet my customers’ demands and maintain their satisfaction. The ordering process with Global is seamless and userfriendly, making it easy to do business with them.

I can typically achieve a 30% margin or more with Global Industrial. Their reliability, efficient shipping, and user-friendly ordering system have made them an essential partner in my business.

Ronni Hillard

West Point Rack

Cantilever

Indoff’s Sales Partners of the Month

Indoff’s Anniversaries

Congratulations to the following Partners & Corporate employees who are celebrating their Employment Anniversaries with us in the months of July through September 2023.

Indoff Holiday Schedule for Corporate

NOVEMBER 23-24

Indoff Corporate will be closed the following days during the Holiday Season:

Thanksgiving Christmas

JANUARY 1

25 New Years Day

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