PEMBROKE, Mass. — One of the pivotal relationships for your business is with your main distributor. Not only do you count on him to provide products and equipment in a timely, economical fashion, he can be your eyes and ears to the industry.
He can be a sounding board as well as adviser. He can help you solve some sticky problems. He can help you run your marketing events. He can even point to good potential employees in the industry. The key is how you develop your distributor relationship.
Above all, be on good terms. Your distributor representative will be the contact person. Become his friend. Understand his needs. Relate to this individual as a person. This doesn’t mean that when John drops in, you take him out for lunch and treat him to a ball game, enjoying the beers and the woozy feeling you both share afterward. This means that you study the person, see what makes him tick, understand his inner needs, and develop strategies that enable the two of you to be friends.
This isn’t always the easiest thing in the world. You are two different people. One might be a quiet, self-contained introvert and the other might be a booming extrovert. One might hate politics while the other might think arguing about Democratic vs. Republican values is just about the best thing to do. Plus, there’s a bit of an inverse relationship. You both want to do business together, but one wants bottom prices and impossible service while the other wants higher prices and less-urgent service.
Even if the distributor is odd, unfriendly or slightly loopy, you must find a path to, if not friendship, toleration. You must overcome these obstacles, find common ground, and make that the basis of a friendship. At the very least, you have something in common—you are two individuals trying to make a living, often with families to support, and you both know that it is done through compromise. Certainly, that understanding can be a basis for a good relationship and mutual respect.
Use your distributor as a disseminator of industry information. Ask questions.
So what is XYZ doing?
Anyone placing any multiple-unit equipment orders?
Any newcomers entering the business?
What is happening with the manufacturer that is going bankrupt?
How do operators find business these days?
Is ABC’s kid taking over now with ABC being sick?
Have you seen a lot of price increases?
Such information helps you know what’s going in the industry, who’s doing what, and where the market is heading. Such knowledge helps you figure out where you are in the pack and where you might want to head in the future. For example, you wouldn’t raise prices if you didn’t know what others were doing, if for no other reason than you could prepare an explanation.
You never know when industry information is valuable. For instance, you might find out that XYZ recently had a store manager quit at the exact time you need someone to be your second-in-command. Perhaps this individual would be perfect for the job.
Or you might find out that XYZ is closing a store that borders your market. With such insider information, you can plan a marketing blitz on the north side to capture many of those customers.
Or you might learn that everyone is raising prices. That might clue you in that now would be a good time to follow the pack.
The distributor’s tip that XYZ is contemplating closing his operation could encourage you to expand your operation by taking over his location. Your distributor could fill you in on demographics, to see if you will acquire enough new business or will cut your current market reach in half.
Ask for advice when you have a problem. You feel your machine capacities aren’t perfectly aligned. Call up your distributor salesperson, lay out the problem, and see what he says. It doesn’t hurt to bounce problems off industry insiders.
One operator likes to make major decisions this way: “I get three or four insider opinions, and put them down on paper. Then I hole up with a pad of paper, and grapple with the problem, using the others’ opinions as guidance. Hopefully, I emerge with an answer. It might not be the answer a distributor gave me, but the distributor’s contribution helped me decide.”
If you are running an event, ask for assistance. Your distributor can provide marketing help, send pamphlets, and even appear as a personal emissary. If you want to design a mailer, send it to your distributor to review it. If you are considering replacing new equipment, ask the distributor for his suggestions. In other words, use the experience of an industry insider who has dealt with all sorts of situations. If you are attending a convention, ask the distributor if he can supply advanced info on show specials, which gives you time to do research.
Yet, don’t fall prey to becoming a dupe or a softie. You must still fight for the best deals, press for the lowest price, argue for favorable terms, and check invoices carefully for errors. You must become friends and be willing to seek help, while still acting as one tough customer. This is not an easy tightrope to traverse, but still you must walk it. In other words, never let friendship get in the way of driving a hard bargain.
One operator puts it this way: “I fight for every cent, then when I need the distributor, I ask for favors. When I sense reluctance or a bad attitude, I say, ‘Look you and me are in this together. You want me to succeed. I know I’m being a tough SOB, but it’s necessary to run my business well. So, put up with my demands, and over time, you’ll receive the lion’s share of my business.’” Never be afraid to say, “I need you, Mike. And you need me. Let’s work it out.”
A distributor relationship is one of your most important associations. Make it work for you.