As the economic impact of the coronavirus pandemic deepens, having an ecommerce channel is not always enough for distributors to weather the downturn in business. They need products in demand, says ModMart.com CEO Bill Quinn.

Cognizant of the fact it did not carry products expected to be in high demand as the coronavirus pandemic spread, ModMart, a wholesaler to gifts and home décor products to small retailers, began searching for ways to add some of those essential products to its catalog.

We are constantly having to find new suppliers every couple of weeks.

Adding those items would not only help offset declining sales for other products, but give its clients access to products that could help their businesses stay afloat as states enforce shelter in place orders that are temporarily shuttering some stores.

BillQuinn-ModMart

Bill Quinn, CEO, ModMart.com

“As gift shops close down because of shelter in place orders, we’ve seen a significant impact on our sales,” says Bill Quinn, CEO and founder of ModMart. “Plus, states where shelter-in-place orders have not been issued are not huge markets for our clients.”

As of April 7, five states—North Dakota, South Dakota, Nebraska, Iowa and Arkansas—had not issued shelter-in-place orders. Three other states—Wyoming, Utah and Oklahoma—had limited shelter in place orders. As of April 13, confirmed cases of the coronavirus had been reported in every state.

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ModMart zeroed-in on hand sanitizers and designer face masks as two essential products that could be added to its catalog. ModMart, which launched late last year on ModMart.com, markets to about 50,000 retailers.

“These are high demand items that can help our sales and our client’s sales,” Quinn says “The demand for hand sanitizer is crazy and designer face masks have a cool factor about them.”

Dialing for dollars

To find suppliers of hand sanitizer, ModMart worked its alliances with sales agencies to find manufacturers of hand sanitizer, including those that were retooling their business to produce the product, such as distilleries. “We also did a lot of dialing for dollars by calling and emailing” potential suppliers, Quinn adds.

While the strategy has paid off for ModMart, it has found that the demand of hand sanitizer is so great it must constantly source new suppliers. It can take as long as four to six weeks for a supplier to fill an order, Quinn says. In addition, some manufacturers are producing small batches to keep up with demand, which further limits supply. The high demand for hand sanitizer and the lack of supply has raised the cost of the product for ModMart, Quinn says.

“We are constantly looking for the best deals and having to find new suppliers every couple of weeks,” Quinn says. “Our goal is to maintain relations with our customers by making essential items available that they can sell to consumers.”

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Finding a supplier of face masks proved much easier. ModMart was approached by Greenbrier, Tennessee-based DecoMask about selling its products. What differentiates DecoMask from standard face masks worn by hospital and medical staff is that they feature unique images such as lions, skeletons and American Flags. The masks are fashionably hip and provide something unique for the small gift shop owners to sell, Quinn says.

Face masks are in high-demand as federal and state health officials urge consumers to wear masks when in public to help stop the spread of the coronavirus, especially by those that are asymptomatic. If nothing else, health officials say wearing masks can deter people from touching their face, which is one way the virus is transmitted.

Some shops may not reopen

“The supplier was forward-thinking and approached us weeks ago about adding this to our catalog,” Quinn says. “And the price point has been good.”

Retailers buying from ModMart are selling online, if they have an ecommerce site, via curbside pick-up or delivery.
While sales of the new products have been solid, they are not enough to offset the company’s overall decline in sales volume, Quinn says. Other than highlighting sanitizer and face masks on its website and sending marketing messages to its clients about their availability, ModMart has not made any changes to its ecommerce site since the outbreak.

Looking ahead, Quinn thinks that many of ModMart’s clients will wind up folding their tent as the economy begins to crater in the wake of the pandemic. Quinn speculates 10% or more of small gift shops may not reopen. “It could be their lease is almost up and they decide there is not enough business to continue or they choose to retire,” Quinn says.

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Another factor hastening business closures could be the lack of workers, as retail sales representatives that were let go or laid off move on to other jobs. “There is liable to be a shift in where the workforce is employed,” says Quinn.
Looking ahead, Quinn questions whether trade shows scheduled for June will be moved to a later date or canceled.

“There is a June gift buying show in Dallas that has not yet made any announcement about canceling or moving its dates back, but June is the last big push to purchase for the holiday season,” says Quinn.

Quinn adds that he is uncertain what impact it will have on distributors servicing gift shops if the show, and others like it, cancel or reschedule dates. He is confident, however, that ModMart can weather the storm because the company has a good relationship with the major manufacturers in this market segment.

Peter Lucas is a Highland Park, Illinois-based freelance journalist covering business and technology.

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at [email protected] and follow him on Twitter @pdemery.

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