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We live in a world of instant analysis and commentary, regardless of the subject or issue involved. With the recent State of the Union address, there were hours of analysis even before the speech was delivered. I feel the same pressure when substantial news breaks in our industry as well. Whatever the story, whoever we are talking with, we are almost always asked what we think of the particular headline of the week. To be honest, though, I am usually reticent to jump to conclusions and, in fact, am usually more interested in what others think about the news — to give me as much insight and varied perspectives as possible. The fact of the matter is that many of my readers have more knowledge into the impact of industry events than I ever will have. This week’s news about Uni-Select acquiring the contracts and relationships of Automotive Information Management Inc. is just such a news story — but this one, at least from the current perspective, seems to be reasonably straight-forward — and a possible trend that will be interesting to follow over the coming months and years.

 As stated in our story, Uni-Select made the acquisition as part of its on-going strategic initiative, designed “to expand the Uni-Select Network and increase drop-ship sales (or delivery of products directly from manufacturers to customers).” In President and CEO Richard Roy’s words in the press release: “This transaction is in line with our strategy of continuing to develop the U.S. market and becoming a consolidator to program distribution groups that have distinctive branding while continuing to maintain and operate existing business relationships with member customers. This solution is a win-win scenario as it allows the member customers to benefit from programs and resources that will make them more competitive while allowing us to continue our growth in the U.S. market.”

 When you think about it, it’s not a bad way for the Canada-based distributor of parts, equipment, tools and accessories to grow its U.S. presence.

 Over the past couple decades, in very simplistic terms, the cost of product acquisition has been impacted significantly by shifts in the power and influence on the distribution side of the business. As the major retailers grew in strength and size — and with their entry into the traditional/commercial side of the market — their buying leverage grew. And, we’ve seen examples of how the retailers have literally dictated terms to manufacturers and suppliers. Pay-on-Scan was just one very public example of those changes in the balance of power.

 Additionally, as the major program groups like NAPA and Carquest grew, and as others consolidated and acquired additional members — the creation of the Automotive Distribution Network and the Aftermarket Auto Parts Alliance are examples — the buying leverage has grown for these larger entities, leaving the relatively smaller groups left to battle from a weaker buying position.

 This change in the balance of power alone could make the Uni-Select system enticing to other smaller programmed distribution groups that could use a larger pile of chips in the game with parts suppliers and manufacturers.

 One thing I can predict is that, over the months and years ahead, Uni-Select will continue to expand its U.S. footprint and will attract others to become a part of its supply network. Your guess is as good as mine as to who will be involved, but there will be more acquisitions. And, Uni-Select has expressed its intention to continue to expand in the U.S. market.

 No, distribution is not necessarily gaining an upper hand at the negotiation table, but the terms of the agreements and particularly the acquisition cost of product could be better for the entities with a larger sales base. And there is little wrong with that.