Q&A With a Hobby Distributor

In preparation for the 2012 Industry Summit, host Kevin Isaacson is conducting periodic “5 Questions’’ segments with leaders from all segments of the sports collectible, entertainment and gaming industries.

This week’s Q&A is with Lloyd Kee, principal of GTS Distribution, a wholesaler of sports collectible and gaming products.  GTS employees more than 50 full-time employees in warehouses in California, Georgia, Pennsylvania, Michigan, Washington, Hawaii, Arizona and Florida.

Kee, 48, has spent his professional career in the collectibles field. He answered these five unscripted questions:

Q. The term “full-service distributor’’  is defined differently across our industry. What services, benefits, programs, etc., do you believe are critical for a true “full-service distributor’’ to make available to their clients?

A. In the sports card business, you have to have three key elements—represent all the manufacturers, competitive pricing and great service.   Our focus for 2012 will be working with our manufacturer partners to develop promotions that drive business into brick-and-mortar stores.  While I hope this will include “big’’ promotions, it will also include a consistent online presence that provides our customers with regular and consistent promotions and specials that help them succeed. Any true “full-service’’ distributor has to continually work at getting closer to their customers, so they can provide exactly what that customer needs to be successful.

Q. Now that the Upper Deck and Panini distribution programs are operational, assess the impact on your clients and hobby stores in general?

A. Mixed reactions – but that should be expected with any new, wide, sweeping program. Initially, some people are happy and some are not so happy – but ultimately, hobby stores will benefit, because manufacturers are taking a more active role.  A year ago, you asked me a similar question.  I said I supported the programs, because it proved that the manufacturers were taking control of their brands – and long-term, that is a huge benefit to our business.  And by the way, everyone should realize that, although Topps hasn’t announced a new distribution program, they have become extremely proactive in impacting how their brand is viewed in the marketplace, much more than a year ago.

Q. Tell us about the most important business decision you made during the past year, and how it has impacted GTS.

A. It’s probably “saying no.’’ A key challenge with any business is staying focused on what they know – and for GTS, that’s the sports card and gaming business.  We have had a lot of opportunities to get involved in other segments, but they are typically lines that we have not handled, and do not have expertise in.  I’m not saying we won’t innovate or try new things, but they need to enhance the core principles of our business.  Staying focused is probably our best and most critical decision, this year and every year.

Q. Distributor consolidation has been a regular occurrence in our industry.  Look 3 or 4 years into the future, and give us your vision of the “hobby distributor’’ landscape?

A. I don’t see much changing, unless the manufacturers or licensors want things to change.  The distribution companies in this business seem to be focused on our industry, as opposed to outside businesses.  That suggests, to me, that we will go forward unless a licensor or manufacturer believes a different lineup is better.

Q. Assessing the first 10 months of 2011, please name one product, promotion or business development that caught your attention as a truly unique or innovative effort – regardless of its success or impact on the business to date.

A. The Upper Deck and Panini distribution programs were a game-changer.  Some people will say they are positive, and some negative, but no one would disagree that they changed the game. The industry had been asking for that type of involvement for years – and as I suggested earlier, any manufacturer effort to control how their brand is presented is a positive step forward for our business.   That said, we have to remember that a distribution program is only part of the equation.  Any successful business needs promotion and great product as well.

For more information on The Industry Summit, visit www.regonline.com/2012summit.  To suggest a subject for an upcoming Q&A, contact Isaacson at [email protected]