FEDA publishes Q&As with new member companies. This week's newsletter features associate member Dealex, an online marketplace that lists used, refurbished and overstock equipment from foodservice equipment and supplies dealers and manufacturers.
Who is your customer base?
David Benjamin, founder: Our exchange, Dealex, is exclusively for verified FE&S dealers and manufacturers.
Can you briefly explain the history of Dealex? When did it start and what is your background?
In my experience, every dealer has items that they have had for a long time — some of it gently used, some overstock, some returns/cancellations/misorders, and sometimes received with cosmetic damage. They haven't found a buyer in their local market, but they don't want to scrap it or liquidate it. At the same time, they have struggled with supply issues. I was at a buying group meeting where one dealer shared with another that they had purchased more inventory of a specific item than they could sell, and they struck a deal to transfer some of it to the dealer that needed it. But it was just a lucky set of circumstances that brought them together. I realized the need for an effective wholesale FE&S market for anyone to access. After discussions with dealers, some buying group executives and suppliers I decided last year Dealex was something we could create that would be a valuable service to everyone in the FE&S sector.
What kind of equipment is listed on the exchange?
Dealers and manufacturers can list any items they have that they believe another dealer would want. It can be new overstock, open box, scratch and dent, or even high-quality used. Right now, there are a wide range of listings that include refrigeration, cooking, some warewashing, ice machines, countertop, and even some smallwares.
What is the advantage of the exchange versus traditional purchasing methods?
It is much more affordable to list with us than it is to return items to a manufacturer and pay shipping and restocking fees. It is a real-time, always current and searchable national marketplace of available items when compared to the efforts some buying groups have tried with shared emails. We maintain price and brand integrity because there are no end users or operators allowed to shop and see wholesale pricing that would compete with the selling or buying dealer. In addition, members can control the audience for every listing, so they can share them with every dealer, or only with dealers that are part of a buying group. Finally, we connect and allow counterparties to transact with each other without us in the middle, so they are free to negotiate final price and terms however they see fit.
How do distributors sign up to sell or purchase on the exchange?
It's pretty simple. There is a registration page on the website where you can share some basic information. We will verify that you are a dealer or supplier and then approve your membership within 24 hours.
Can manufacturers also participate in the exchange? How do their listings differ?
Yes, manufacturers are participating and have listed overstocks, demos, returns, and scratch/dent. They can also post promotions, which allow them to make general or buying group specific offers that can be time and/or quantity limited. For instance, we've had one manufacturer post buying group conference deals last fall that were good for that audience for only a few weeks preceding and following the actual conference.
How does Dealex distinguish itself from other exchanges in the industry?
I think Dealex is the only wholesale exchange restricted to FE&S dealers and manufacturers. We are in the business of supporting the dealer channel, not competing with it. We are also independent of any one manufacturer, dealer or buying group. This gives listers the broadest possible audience, and dealers the best view of items available. Finally, Dealex is low friction; the marketplace is very low cost/low effort when compared to other alternatives, like returns with high restocking fees, resale sites that charge large consignment fees, or public sites that take a lot of time to respond to unknown counterparties.
How is Dealex innovating in its space?
Soon, we are going to enable dealers to post requests in addition to listings. For critical items that are hard to locate, or where a dealer is facing an unacceptable lead time, dealers can publish a request to see if another member might have it. This was something we've had several dealers ask for. We are also exploring the idea of supporting free listings for donation items that could be used to support collaborative dealer community service efforts.
How is the company growing?
We went live in the middle of Q4 2022 with a pilot with PRIDE and Southbend/Crown. After that, we opened the marketplace up to all dealers and manufacturers and have added members from a number of other buying groups as well as other Middleby brands. Now we have started a national rollout, featuring a period of waived subscription and listing fees to make it easy for all community members to join, since we know the marketplace is increasingly valuable to everyone as it grows both content and audience.
What excites you about the future of our industry?
The industry has proven its importance as a critical part of the overall economy, even in the face of immense challenges. I am impressed by the commitment and ingenuity that the industry has demonstrated and I am just grateful that we've been able to have the opportunity to play any part in its future success.
Is there anything else FEDA members should know about your company?
We are committed to providing the infrastructure that increases the value of participating with each other in the FE&S community, helping everyone contribute to the collective growth and success of the sector.