The Distributor Channel

The mix of good habits and even better planning will be rewarded! We’ve all got to start somewhere Contrary to popular belief, good salespeople don’t grow on trees.   Nor can you drive by the local mission and pick the one with the best lettered “will work for food” sign.   Lastly, I want to drive a stake through the heart of that hundred year old myth, that certain parents beget “natural born sales wizards”.   On the contrary, good salespeople are created, molded, shaped, formed and trained.   Not so good salespeople can develop bad habits, learn the wrong kinds of behaviors and morph into non-performing drains on their employers. Unfortunately, our industry has a habit of tossing new guys the car keys, pointing to the territory and saying “go get ‘em, kid,” than providing any kind of real training.    This was an issue back in our dad’s day, a mistake in our day and a gargantuan mistake today.   Here’s why.   According to the research conducted by Matthew Dixon and Brent A

I practice "mind mapping" even though a lot of these turn out looking a little more like flow-charts than true mind maps.  This came out of a client discussion last week.  Do others find value in this type of chart? Distributor Planning Made Easy. Check out our Distributors Annual Planning Workbook: http://amzn.com/1481196448

I’m Already Working 12 Hours a Day, Do You Want Me Selling or Planning? Many distributors have discovered that it takes a very long time to establish new customer relationships.  Others find that in spite of success with existing products, their organization’s ability to launch related products necessary for long-term business health are hampered.   The simple truth is our industry has slowly adapted a dangerous habit.   We practice a reactive sales model.  It’s not an immediate threat, but long term, it’s crippling.  Here’s how it works.  An existing customer calls with a question or support issue on some past purchase.  The salesperson reacts to this issue immediately.   Along the way some excellent customer support is provided.  The customer compliments the seller and potentially rewards this behavior with another purchase.  Everything sound good so far?  The unfortunate part of this equation takes a while to manifest itself.    Our ability to find new customers or expand

Technology – Our Business System is our Friend While not yet given a fruit name, your business system is your best piece of technology. Business data is a competitive advantage.   I find it weird that many distributors have laid out big piles of hard earned cash but most aren’t getting their money’s worth.   Imagine buying an efficient new warehouse but still stacking stock on grandpa’s homemade wood racks.   Sounds goofy, but according to a sampling of consultants form our business, the average wholesaler uses only half of the power of their largest technology investments.   End of year is the time to bring your crew to a new level. Customer Data by Product Line For just a moment, forget the fancy CRM package, forget spending thousands on iPads, postpone that next version of smart phone, they’re all nice to have but customer data is a must have.   Here’s what we’re talking about:   Sales and gross margin numbers by product line on a monthly basis.   Without this kind

Ever feel like you're wearing this t-shirt?   Manufacturer/Supply Partner Relationships Stuck in the Middle with You A quick blast from the past: its 1972, you’re tooling down the road in your dad’s Oldsmobile grooving on Casey Kasem’s American Top 40 Countdown.   As you navigate your way through the A&W parking lot, Casey spins the song soon to be the theme of distributors everywhere, “Stuck in the middle with you”.   And, just like the song says, we in the distributor world are stuck in the middle with our suppliers. This means supply partner planning is every bit as important as customer planning.  And keeping with the lyrics, you may find you're dealing with both clowns and jokers along the way.  Discovering and handling these will contribute to your success in the coming year. Supplier Stratification As with customers, the first step in building a plan (and a strategy) comes in understanding the positioning of your suppliers.   I call this supplier

Rockwell Automation Fair from the Street Level I attended Rockwell’s 21 st Automation Fair last week in Philadelphia, and since loads of people are asking, I thought I would share a few thoughts on the fair from a street level perspective.   Over the years I have attended all of the shows but one, so I feel relatively well qualified to comment. First, in spite of Hurricane Sandy and Northeaster Athena, the attendance was strong.   Rockwell published the first day’s attendance at somewhere between 9,000 -10,000, but it definitely seemed like more.   The booths were packed and the people seemed qualified.   The show started at 8:00 AM and unlike many shows that start off slow – the line had already formed at 7:30 in the morning.   I saw attendees from virtually every corner of the globe.   This shindig really is a world event. Secondly, I saw my all-time first planning issue with one of these fairs.   They ran out of cookies at lunch on the first day.   While this is a s

Building a Better Marketing Plan – Annual Planning Let’s have a difficult discussion.    The cold hard facts are most distributors do a lousy job with marketing.   Over the years, most distributors leaned on the brand recognition of their supply partners.    In a few instances where their major supply partners use very limited or exclusive distribution, this strategy may even work.   However with just a couple of exceptions, meaningful exclusive channel partnerships are slip sliding away.   And this leaves distributors with a need to crank up their marketing efforts. In distribution there are three basic components of marketing (ranked here from easiest to hardest): sales aids, sales events and brand building.   Experience dictates marketing people on distributor payrolls tend more towards the keeper of the trinket closet key and event coordinator.     We are not bashing them for the work they do, but we do believe it should be expanded a couple of notches.   Let’s take a

Employee Enhancement Everybody says, “Our employees are our biggest asset.” But in the world of distribution the truth is our employees really are our biggest investment.   According to the Profit Analysis Reports generated by distributor associations, payroll cost represents somewhere between 60 and 65 percent of our total spending.   We’re not just “whistling Dixie” when we make the claim, it’s totally true.   But sadly, very few distributors create a real plan for maintaining or improving this investment.   If we were talking buildings instead of people, rust, decay and rundown would be the descriptors in play.   Most of us hire top talent, and then we rely on our hires to keep up with changing times.   Computer skills, inventory management techniques, and sales process are left pretty much to the individual.   What’s worse; along the way, only a few of us take the time to assist the employee in their development via a formal review. According to new research presented in

Detailed Expense Budget  A llow me a couple of Bold Statements: ·          Salespeople hate budgets.   I don’t know why this is the case.   But after three decades in the selling business, the evidence continues to pile up.   Whether they fear accountability, find the process tedious, or can’t stand a couple of hours staring at a spreadsheet – it just appears as though most shirk this duty. ·          The Top Brass of most distributors came up through sales.   And, guess what?   They still hate budgeting.   As strange as it may seem, I continually run into distributors without a detailed expense plan for the coming year.   When budgets exist, they commonly are a product of the accounting side of the business, without solid input and support from the other sides of the house.   Ouch… The best annual distributor plans call for not only a forecast of incoming sales and gross margin (which we’ve covered), but also predict operating expenses in the coming year.   Over the y

The Who, What, Why Sales Budget In case you haven’t noticed, we distributors are in the sales business.   Now I realize there are a bunch of you who are starting to raise your hand with questions like: What about our inventory department?   And aren’t distributors really involved in the logistical world? Both of these are valid arguments.   However, without sales, the distributor world comes crashing to a halt.   If sales are not predictable, and budgeted for, all of the good inventory practices in the world will be for naught.   We believe arriving at a solid estimate of next year’s sales and gross margin is critically important to your plan.   Actually gross margin dollars are more important than sales numbers in the distributor world but, developing both allows for better communication with supply partners who deal only in sales. Most distributors take a shot at their forecast by pulling out some growth wish – 8, 10, 15 percent are commonly tossed out.   This becomes