We Get Comments!

From our article titled “How Should Manufacturers Improve Their Distributor Relationships” we received several really good comments.

We thought it worth sharing some of the more notable ones!

Comment 1:

Tom Fournier great points! Thank you for sharing your insights.

Price increase justification from the supplier is key so we can properly communicate to the customer. Don’t think anyone these days small or large can justify eating increases!

Think we all could use more leads from our suppliers but it goes both ways. I think one of the challenging things is I try to ensure my team is self-sufficient (they know about the product we sell and can complete demos and conversations on specs, pricing, lead times etc) so they can close the deal effectively leaving everyone happy without the supplier involved on everything. However, I find sometimes suppliers want more involvement on a transaction and they feel we are keeping them in the dark. However, when demo support is requested sometimes we are left hanging…

Knowing our top and bottom line requirements is critical today. I try to ensure my sales team know exactly where they need to be with also allowing flexibility- sometimes that doesn’t mean price but also providing creative ways to assist the customer on purchasing the equipment (I.e. lease program) or ensuring that we are upfront (do you want the Toyota of the industry or the Kia).

Comment 2:

Great, punchy article and contributions, Tom! A phrase resonating with me right now (in general) is “Simple. . . but not easy!” Meaning, the concepts are simple to understand but executing on them takes real work!

So much of what’s mentioned above is just that: simple, but not easy.

My contribution to this would simply be that making a distributor feel special/advantaged in some material way (i.e., sales leads, limited product availability, more prompt service/responsiveness) goes a LONG way in sustaining the relationship.

Comment 3:

Tom, your points, specifically, are right on the money. Rarely does a smaller distributor see any leads from a vendor any longer. did they dry up or do they go to the large pieces of business they have?

As far as e-commerce goes it seems clear that if a vendor is selling through Amazon or any of the other online retail giants in a competitive situation against their current distribution channel they are clearly letting all of their distributor know “we are taking this business because we can, and we wish to support the largest distribution channels”. (again, see a pattern developing?)

Lastly, some vendors, the ones that have sold into the distribution channel for some time now, do have an understanding of the financial needs of distributors, but most new ones don’t. Many think 5% to 10% gross margin is plenty. They think more about the product being the star and the manufacturer should get the lion’s share of margin for the “great product”.

Sorry, it doesn’t work that way. If you want us to sell the product ensure we can cover expenses AND generate a bottom line gross profit. A bare minimum of 40% Gross Margin will be needed for this vendors. If you don’t believe me…ASK others!

You can read the orginal article here: ARTICLE