How do Chemical Buyer’s Buy? Will it ever really change? 24

I am not old enough to have experienced the ‘two martini lunch’ technique of ‘doing business’, nor am I young enough to fully grasp the trends on ‘how buyers will buy’ 10-15 years from now.  However, I do know that the chemical industry has actually regressed in the past 15 years with respect to our use of technology in the conduct of day to day business and transactions.

How are Buyer’s buying differently than in the past, and where could it lead in the future?

Last December, I visited a very progressive chemical marketing/sales company on the East Coast. I was impressed with the sheer volume of computer monitors and the atmosphere of a Wall Street trading floor. The founder graciously took me through their offices and explained how their website gets approximately 1,200 hits/day and 40 solid inquiries for their products.  They literally are ‘fielding calls’ and reacting all day long.  I am not ashamed to admit I was slightly envious, but I have to think this is a unique situation.

I look at my company’s website and while a little outdated in appearance, we provide solid information to customers/suppliers (and apparently headhunters as well) and try to offer a little personality with our company newsletters.  We get nowhere near 1,200 hits/day and are realistically lucky to get 5 solid inquiries per week, if that.

I consider us to be fairly progressive on the technology side; our CRM and ERP systems are reaching the tipping point with our entire staff learning the value of a central repository of information and how profit and value can be generated.   But I constantly wonder; “what are we missing, what is a better way?”


When I entered the chemical industry in 1988, only about 30% of companies had fax machines.  We literally had to ask contacts, ‘do you have a fax machine?’.  I contrast this to just this morning when a customer notified me of a purchase order via Facebook message.  Truth!   Back then, salesmen made phone calls and the occasional visit, and customers hopefully called back with purchase orders that were written into notebooks and somehow transcribed into systems that processed the orders and paperwork.

An excellent article written in 2001 by Rajat Agrawal discussed opportunities for chemical companies and specifically customer-related opportunities and supplier opportunities as well utilizing e-commerce.  Based on my recollection, his vision at that time was spot on.  Suppliers on a mass scale would literally link into customers using EDI or an extranet to monitor inventory, and share real time information.  Smaller companies who could not afford such luxury were doomed!  Buyers could use e-commerce for cost containment.  Employees were leaving brick and mortar chemical companies to work for any entity that contained “dot com” in the title.  The labor market to hire recent college graduates was completely turned upside down by the dot-coms as these kids all wanted minimum 6 figures to start as a junior salesperson.

The Dot Com’s and Exchanges…

At the millenium, there were in fact three dozen or so chemical exchanges that were destined to cause the end of the traditional model of chemical selling.  They are ALL now gone… Powerful names like ChemConnect, e-Chemical, and Elemica were going to change the world, and here we are today… still on the phone (and with more – much more! email) making offers and still working for orders.

Perhaps these exchanges came too early, and this model will return again.  I am aware of several new chemical exchanges that are trying to resurrect this model today, but are buyers ready for this yet?  Will the chemical industry change it’s ways? Does it need to?  What value does the exchange provide other than sharing of someone’s inventory and electronically react to a buyer’s eBay style wishes? And how much is that worth to a buyer/seller?

The two martini lunch days are certainly over, and the 5 hour golf rounds are getting fewer and farther between (maybe people just don’t like playing with me and I haven’t caught on yet). Email is getting more ferocious to manage, and business moves at the speed of smartphones… but has anything essentially changed?  Are buyers buying any differently than 20-30 years ago, and more importantly will these habits change in the near future?

Personally, I don’t believe the chemical industry can be served by an Amazon.Com type model.  There are just too many ‘special requirements’ in this business.  Perhaps I am wrong, and I’d welcome any conversation about buying/selling habits.  Thanks for reading.

I’m a Chemical Trader – Now What? 12

I am a Chemical Trader (industrial, not recreational).

I’m also CEO of a $70,000,000+ multinational Chemical Company.  I have led a team that started as two people in a spare bedroom in my house and today has 33 people working in 5 nations around the world.  We have aspirations and a strategy to be a $200,000,000 company. Throughout 19 years, I’ve have worked extremely hard, been fortunate enough to surround myself with incredible talent, made some big mistakes, hit some huge home runs, and love being ‘in the game’.

The Problem
Lately, I’ve been doing a lot more CEO’ing than Trading – and I’m tired of it.  It’s not doing me any good, and certainly not the company.  I want the days back where I wish Saturdays were Mondays.

I’m returning from the Annual Meeting of the National Association of Chemical Distributors (, and spoke to a number of my peers about this dilemma.  I feel like I’m not contributing, nor participating in the daily battles we face in the market.  I am buried in email and meetings.  Does this sound familiar? The vast majority of tasks I take on could be, should be, or are handled by people much better suited than I to handle these tasks.  Approximately 75-85 out of every 100 emails come to me from within the company (n.b., I have not included the Nigerian Prince emails or the relentless onslaught of M&A emails that arbitrarily yet consistently pop up), I want that ratio reversed with the majority of my mail relating to buying and selling products.  And, if they are from inside the company – I want to be working with my team to put business together.  Commerce only!  No bankers, no lawyers, no insurance brokers, no interviews, no 1:1’s with staff, no annual reviews…Other people do that. I want to sell. That’s what I do best.

Does anyone else face this problem? Do tell.

The Initial Solution
I’m getting back ‘in the game’, and I’m cutting the CEO stuff cold turkey.  I’m handing over the operation of the company to an extremely trusted Lieutenant.  I am lucky to have her… She’ll do a lot better than I at that segment of the business.  I’m not going away… I’m still going to work on CEO stuff like ‘managing the mood’ and ‘creating the future’, but I’m going to be active in the daily battle of commerce while we get there.

The Issue
The company was founded in my home in Leschi (Seattle) Washington USA in 1994, and as could be expected from a founder of a startup, I was the top revenue producer in the early years.  We grew. And we grew. And we grew some more.  Now 33 people in 6 countries and my personal production is negligible.  I want to get back in the fight. I want to be the top producer again.  My ego demands it. I am now surrounded by incredible talent, so my feelings won’t be hurt if I’m not on top… I just want that rush of getting that order.  Of working 24 hours calling different time zones moving east as the sun rises…moving, shaking…making it happen.

But, it’s a new world since I started with a few phone numbers, a calculator and $30,000 in the bank.  When I got into the industry in 1988 I recall only about 40% of companies had fax machines. Yes, everyone under 30 years old…google it.  Fax Machines.   By 1994, everyone had fax machines, but email was beginning to creep in.  My first email address (and there was no flexibility to change) was    Those were the days my friends.  About 30% of people in the industry and many a time you heard… “I don’t do that email stuff, why don’t you just pick up the damn phone… or, if you have to just fax me something”.  In 1995, we were one of the first companies in the industry with a website.  To ‘mass market’ prospects and potential customers/suppliers, I would print each and every fax and stand by the fax machine patiently as each page spit itself thru the rollers ever so slowly.

Fast forward to 2013.  Yes Mom, it’s a different world.  iPads, Airplay, SkyDrive, GoToMeeting, Smart Phones, Instant Messaging, Texting, What’s App, Skype Video Calls, Linked In, Twitter, etc…, and of course the relentless timesuck – Facebook.  Google/Bing… forget about it! Here is what ‘Search’ was… We used to rummage thru the Stanford Research Institute’s (SRI) “Green Book” and “Red Book” to find leads, determine producers.  At the price of about $10,000/set – owning these gained us quite a competitive advantage.

The latest in meeting technology...Conference Calls on MSFT Lync.  Seattle, New Jersey, Dubai, Delhi and Capetown represented here.

The latest in meeting technology…Conference Calls on MSFT Lync. Seattle, New Jersey, Dubai, Delhi and Capetown represented here.

I’ve got some thoughts, but how are any of us expected to gain a competitive advantage?  Everything happens so fast. I’d welcome any dialogue on these issues… I have my thoughts, please share yours.

So, as of next week I have a new job.  Senior Trader.  Any item, issue, or email that does not relate to buying and selling product and moving this company forward will be ‘declined’ (apologies to Michelle Connor, Marjalena Santos, and Megan Gluth). I’m going to take every business card I have been given for the past 10 years… (work with me folks… who has ever come back from a tradeshow and followed up on none of those cards?   Anyone? Anyone?). Then, I’m attacking LinkedIn and actually going to learn about my ‘connections’ and the companies they work for. Then, the fun starts….a blitzkrieg of phone calls, followed by email after I leave the inevitable voicemail.   If you are so lucky to be both reading this blog, and on the business card or LinkedIn list… you’ll be receiving these so get ready …. I want to figure out how we can do business. And I humbly look forward to it.

The Question
So here is my question, how are ‘chemical guys’ using the various social media outlets today?

Twitter?   It is a reasonable news source, but significant and real information does not seem hit this medium.

LinkedIn?  A glorified industry contact album canvassed solely by headhunters trying to steal my employees?

The Web?  Corporate Websites?  They appear to me to be digital brochures.  How are people using the web to trade, and commerce?

Exchanges?  Do any of these work.  I remember during the dot com bubble… ‘the industry as we know it will disappear…everything will be bought on the internet… auctions will rule the day, etc…. ‘.

So, where are we today?… Same place we were in 1988… purchaser picks up the phone (or the 2013 version of picking up the phone i.e., email) and places an order…. Can this ever change?  Will an Amazon style marketplace ever exist?

These are my questions… I’d love to hear input.  Meanwhile, I’ll be back in the trenches – loving every minute doing what got us here, but was forgotten so long ago.  I’ll report on my success (or other outcome) later.

I plan on coming out very soon with the first Chemical Trading and Distribution podcast.  These cast will feature prominent individuals from the chemical field speaking their mind on issues related to our industry. We’ll have a little fun too!

Please post your comments in the forums below, or contact me on Twitter (tonyridnell) or email (