A Chemical Change

Somewhere in the U.S., a chemist working for an ethnic hair care company is looking for better sheen from a hair spray product under development. Sourcing specialty chemicals and having access to people who understand what the chemicals can do to achieve the desired results are challenges chemists everywhere encounter every day.

A strictly inside sales model designed to offer producers new approaches to increase sales and improve customer satisfaction levels can be added to the arsenal of those who market specialty chemicals to the beauty industry.

End-user Benefits

Viachem Ltd. has introduced a distribution model that employs chemists as technical sales specialists. These sales specialists know their products well and can help customers achieve the results they’re looking for in their formulations, according to founder Mike Efting. Efting and board members Darwin Simpson and Gene Sabatier average more than 30 years of experience each in the chemical industry. Their new model also uses trained inside sales specialists to better serve existing segments and open and expand new markets for specialty chemical producers.

Specialty producers selling to personal care know there is a large number of customers they can’t get to themselves, requiring the use of reps and agents. This has proven difficult to do consistently on a nationwide basis, said Efting, who set out to “plug the holes and gaps” that he knows exist in current distribution models from his own experience in that side of the business. He spent 21 years with Van Waters & Rogers, an industrial chemicals distributor, where he founded ChemPoint.com—the company’s Web-based e-commerce business. After leaving ChemPoint.com, Efting was president of e-Chemicals, a business-to-business Internet chemical exchange. Most recently, Efting was CEO of Quadrem, an e-marketplace for mining, minerals and metals. He is a frequent speaker on the subject of the Internet and its impact on supply chain management.

Efting puts the annual value of U.S. chemical sales at $1 trillion, with $100 billion of that coming from specialty chemicals. According to the National Association of Chemical Distributors (NACD), some $18 billion of U.S. chemical industry sales are through chemical distributors.

Supply Chain Reaction

On the flip side of the equation, when a specialty chemical producer is questioned regarding the effectiveness of its distribution chain, according to Efting, the answer often is “We don’t have one.” A company selling emulsions in the eastern U.S., for example, may do well there, but doesn’t have the resources to go any farther, leaving smaller markets untapped and underserved.

Efting and his partners asked themselves, “How could we more effectively sell specialty chemicals to the personal care industry?” The answer: represent a small number of chemicals (50–60 lines); offer an inside sales environment; deal with producers on an exclusive basis.

“We’re going to provide a channel to market for small- and medium-size producers that hasn’t been there for them,” said Efting. The model is designed to complement the producers’ current sales channels.

A Viachem inside sales specialist will use the phone and Internet to make more than 4,000 sales contacts annually. The market intelligence gathered by inside sales specialists will be shared with the respective producer partners to help them better serve their markets and grow their businesses. “We are the only distribution company that will offer complete end-user visibility that includes buying trends, emerging markets and problems customers need to solve—all of which can help improve the producer’s product line and bottom line,” Efting said.

Rich Rebholz is president and managing partner of Clarus Specialty Chemicals, a Rock Hill, South Carolina, producer of refined petroleum products used in the production of hot melt adhesives, chewing gum (gum base) and candles. Clarus was the first producer to sign on with Viachem.

Rebholz believes the Viachem model addresses some of the biggest challenges in the current distribution system, including ownership of accounts and access to account information. He is excited that Viachem will be working in markets in which Clarus currently does not have access. He sees it as “a terrific way to get us started in markets,” by allowing his company to grow the way it wants to grow without hiring a lot of people.

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