A construction purchasing co-op is so popular with suppliers, it turns away over 80% of those who want to join its network.
Founded 19 years ago, the Sphere 1 co-operative is a tool, fastener and concrete accessory distributor which brings together 105 preferred suppliers for its 151 members who work in the construction trade. Vice president Rob Moe explained how in spite of its success, the co-op’s greatest challenge remained to show value to its members and suppliers’ network.
“Some members and suppliers almost feel they have to be part of some type of organisation or co-op in order to sustain themselves, be competitive so they get involved in the co-op and think things just stop there and they take things a little bit for granted,” he said.
“As the management team, we have to reinstill the value of training and planning and working together with suppliers and members to grow and foster their business together.
“Whether it’s the planning platform, our education platform, or our marketing platform, we continually communicate with our members and really encourage them with the value of what they are part of.”
Mr Moe has been working in the construction supply sales sector for 34 years. He joined the co-op three years ago, after being approached by its board of directors.
“Whether you are a supplier or a buyer, or a member, you take for granted that once you are a part of the co-op everything will fall in place,” he added. “It’s a relationship building process, it’s a listening process, you have to foster relations, work together and experience a value of what a co-op has been put together for.”
Over the last five to seven years Sphere 1 has been growing consistently between 15% and 18% per year. “Our membership is growing so much that we are very selective in who we bring as members,” said Mr Moe. During the past 18 months, the co-op has been approached by over 100 member distributors who wanted to join it but only accepted a dozen of these.
While the 2008 economic crisis affected Sphere 1, the co-op structure helped it overcome the challenges posed by the recession.
“Our members really pulled together. Being shareholders they pulled together trying to benefit each other. At the same time, they recognised they were part of something, so they certainly wanted to make sure they made all they could to support the bottom line because it’s obviously about a rate of returns back to them so the more they can support the suppliers that are part of the organisation, the more they are all going to benefit,” said Mr Moe.
What are the co-op’s plans for the future? Along with targeting another 12 to 20 new members, it is looking at attracting specific suppliers and re-energising its training platform.
The co-operative’s Sphere 1 university is an online training platform with support from an external cloud-based learning management company. The platform enables suppliers to submit information on new product information, specific installation and application training, safety training and sales training. Members receive rewards for completing courses.
Sphere 1 members have a total purchasing value of $1.7bn a year and the co-op captures about 50-60% of that spent on the preferred supply network.
“One of our challenges going forward is to bring the right suppliers to service and foster those relationships to try to capitalise as much of that spent as possible,” said Mr Moe.
