NETPLUS ALLIANCE

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NETPLUS ALLIANCE
The Alliance for Distributors and Manufacturers

• ANNUAL MEETING
• Toronto 2005

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Annual Meeting Agenda

• Introductions
• Lunch
• ISA Presentation John Buckley
• Executive Vice President, ISA
• Carborundum Abrasives Presentation
• Jim OConnor, Mgr of Distribution, NA
• NETPLUS ALLIANCE Presentation

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The Growth of NETPLUS ALLIANCE

• NETPLUS ALLIANCE today
• 226 Industrial and contractor supplies
  distributors
• 627 locations in 46 states
• 2.2 Billion in sales
• 132 manufacturers and wholesalers support NETPLUS
  
• 25 Business Services Suppliers
• A diverse buying group offering a broad range of
  product lines
• Hand Power Tools
• Cutting Tools Abrasives
• MRO Supplies Chemicals
• Material Handling Equipment
• Safety Jan-San Products
• General Contractor Supplies
• And much, much more!

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Why has NETPLUS been successful?

• Pure and simple model
• no barrier to entry low cost operation
• Our goal is to build the groups overall
  purchasing volume
• Industrial distribution and buying group
  experience
• Proven buying group software
• Great press in ID Magazine, Progressive
  Distributor and Modern Distribution Management
• Committed distributors and suppliers

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FOCUS

• We get a rebate from you?? (anonymous
  distributor member)
• Our primary mission is to
• improve your net profit margin through
• annual rebates
• better pricing
• no annual fees or dues
• Our other mission is to grow the market share of
  our supplier partners
• (thats why they pay us the rebates)

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RESULTS

• Rebates Distributed
• 2003 162,121
• 2004 351,243 117
• 2.1 of member purchases in 2004 were from
  NETPLUS suppliers (our participation ratio)
• 5.0 is our participation ratio goal
• The average rebate was 2
• New business for our suppliers!!
• Same stores sales increased 24
• Its important to keep our suppliers happy with
  growing purchase volume

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Some Great Results

• Largest rebate 34,339 (51 suppliers)
• A 7.5 million member 19,000 (40
  suppliers, 18 participation)
• A 3 million member 7,800 (23)
• A 4 million member 7,000 (12.5)
• An 8 million member 12,000 (10)
• A 1.5 million member 2,200 (12.3
  participation in only 9 months)
• Not Bad for Our 2nd Year
• AND, NOWHERE TO GO BUT UP!!!

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What are the Rebates?

• Most supplier programs include both
• Base Rebate a rebate percentage paid for all
  purchases these can range from 0.5 to 5.0 or
  more
• Growth Rebate an additional percentage paid when
  the group reaches certain plateaus
• The growth portion can make a significant
  difference to your bottom line
• Many suppliers set growth targets which, when
  achieved, can more than double the rebates.
• Other programs offer incentives based on growth
  over previous year sales which can increase the
  rebate by 25 to 100 or even more!
• By keeping our operating costs down, we are able
  to pay the greatest portion of the rebate
  directly to the distributors who made the
  purchases
• Your rebate is directly related to your purchases
  from each supplier no other criteria are used
  to determine eligibility
• Resist supplier attempts to eliminate the rebate
  when you ask for special contract pricing
• Note To protect our supplier programs, actual
  rebate percentages per supplier are confidential

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How Can I Grow My Rebate?

• Develop a loyalty to NETPLUS ALLIANCE and our
  suppliers
• Respond positively when our suppliers call on you
• Distributor CEO should review the purchases
  report that came with your rebate check
• Increase purchases from your current NETPLUS
  suppliers
• When adding a new product line, try NETPLUS
  suppliers first
• Convert or consolidate existing lines to NETPLUS
  suppliers. Good candidates include
• High volume product lines which will build your
  rebate quickly
• Products lines where your current gross profit is
  slim
• Products where brand preference no longer matters
• Product offerings where you would like to improve
  quality or service for your customers
• Encourage your top suppliers to join NETPLUS
  ALLIANCE

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NETPLUS ALLIANCE Business Services

• Log in to the distributors only section of
  www.netplusalliance.com
• Click on links to Business Services
• Programs are listed by category
• Logistics Consulting
• Insurance Financial
• Office Technology
• Travel Communication
• Each program sheet shows
• Information on the product or service
• Relevant pricing information
• Instructions contact data

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Product Exchange Program
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Communication

• A Monthly Newsletter mailed to over 800 member
  contacts
• Features 4 to 6 manufacturers per month
• Other NETPLUS ALLIANCE information
• Be sure all of your key people are on the mailing
  list
• New manufacturer program sheets e-mailed and
  posted on our website immediately
• Paul Haber periodically calls and visits our
  members
• To inform you of additional opportunities
• To make sure things are going smoothly
• To address any concerns or questions you may have
• Other information may be distributed by mail,
  e-mail, fax and phone
• Please READ DISTRIBUTE all of the important
  info you get from NETPLUS ALLIANCE

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Communications

• Call NETPLUS ALLIANCE for assistance
• Paul Haber, VP of Distributor Communications
• If you have any difficulty signing up with one of
  our suppliers we may be able to help!
• If you cant find a product among our suppliers
  Paul might know of an alternative source
• Any time you have a question or concern about
  your NETPLUS ALLIANCE supplier relationships!
• Shirley Weiland or Karl Tschaepe
• For questions about supplier programs or contacts
• For questions about rebate payouts or purchases
  reports
• To get you ID code and password for
  www.netplusalliance.com

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www.netplusalliance.com

• Visit the distributors only section of our
  website
• Manufacturer program sheets and pricing sheets
• Year to date purchases by supplier
• Search for manufacturers by name or by product
  offered
• Links to manufacturer websites with product and
  service descriptions
• Access to NETPLUS Business Service programs
• The NETPLUS Exchange List
• Download the spreadsheet version
• Search the digital version online
• Free utility to list dead and slow-moving stock
  for sale
• NETPLUS ALLIANCE news and information center
• The distributors only section of
  www.netplusalliance.com is for all key employees
  and staff members.

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CONTACT
Distributor Communication Paul Haber, Vice
President pjhcrs_at_aol.com Manufacturer
Liaisons Karl Puzio, Vice President karlpuzio_at_aol.
com Dan OBrien, Vice President danob3_at_aol.com

• Principal Contact
• Dan Judge, President
• danjudge_at_earthlink.net
• Operations Marketing
• Shirley Weiland, Operations saweiland_at_earthlink.ne
  t
• Karl Tschaepe, Marketing ktschaepe_at_earthlink.net

Phone [phone] Fax [phone] www.netplus
alliance.com

• NETPLUS ALLIANCE 26 Davison Court
• P. O. Box 1027 (14095-1027)
• Lockport, NY 14094

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NETPLUS ALLIANCE

• QUESTIONS????AND, COMMENTS or SUGGESTIONS!!!!
• Next Years Annual Meeting ISCON
• San Antonio, TX
• May 20 22, 2006

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NETPLUS ALLIANCE
The Alliance for Distributors and Manufacturers

• ANNUAL MEETING
• Toronto 2005