One source said AD was eying up the European IT channel. Unusually, AD which buys centrally over $25 billion for its 300 members, has managed to move into several industries and has four divisions today covering electrical, plumbing, industrial and pipes, valves and fittings. That makes it ten times the size of the biggest wholesalers in its industries in North America, according to Stewart Gale, AD’s VP marketing.

So what is the secret? Gale says: "Our goal is to increase the marketshare of our members without giving up margin." Whilst AD will use its aggregate power to cut prices for its members, Gale acknowledges that such savings often simply end up being passed on to customers. He adds: "Our skill lies in working with big suppliers to put together exclusive offers for our members." He claims that AD can cherrypick its members: "They are well run, financially stable companies which have sorted out succession." AD is owned by its president, Bill Weisberg. 

Our Analysis: Traditional buying groups aggregate to cut costs, but often offer little real marketing advantage to their members.  Marketing tends to be confined to rather Noddy things - teach-ins and the occasional mailshot for members. AD appears to be different, in that it focuses on marketing, rather than buying and claims to be able to come up with compelling concepts which really generate pull-through.