Friday, March 20, 2015

Distributor Etiquette Hate Mail

It’s not often that I get real, honest to goodness “hate mail”.  Apparently, our thoughts on Distributor/Supplier Etiquette
have touched a nerve.  The strange part of the whole thing is this:  We are only posting on distributor/channel oriented groups.  These groups are focused on those who are either a) distributors or b) manufacturers who go to market through distribution.  They should be friends or at least tolerant of one another.
Yet in the past week, I have received emails and/or anonymous posts which contain things like this:

“Frank, you are a distributor apologist.  You claim to be open minded but your writing continues to indicate they can do no wrong.”

Taking excerpts from several other notes, we find a similar type of attitude.  Distributors are described as follows:
The remnants of a day gone by with no place in the modern age.

Lazy, to the point of not being willing to introduce new products or handle warranty claims…

Unwilling to carry inventory except on their biggest lines…

Slowly dropping their commitment to training new people…
Completely different to deal with then in my younger days…

Going even further, here is the entirety of one of the best (worst) posts on the state of distribution:
The problem is that MOST distributors today are going through the same LEAN supply chain consolidation as most industry. Other than their fast moving mfg, they are extremely and increasingly risk averse to carrying inventory. This creates a ton of pressure on the supply chain. In my opinion, most distributors create little value, even though they talk about it quite a bit. They add margin, drop ship a good lot, and do less and less of what they are supposed to do which is to have products in stock.”

For the record, I believe distributors are neither partners nor customers.  They are often an extremely efficient and effective “instrument” for getting product to market.   Many suppliers would struggle if they were suddenly charged with carrying the massive accounts receivables load for all of their customers.  A good many suppliers would struggle to get customer attention if their product was not packaged with the product of another manufacturer to create a solution. 
In the current model, power house supplier get preferential treatment.  Most of them command greater respect with their distributors.  Perhaps this person is upset because they are not a high power supplier. 

By the way, I love hate mail almost as much as I like emails of praise.  Drop me a line if you think I am getting prematurely senile.  


MGB said...

Distributors offer value from service, stock, training, product knowledge, commercial grade products, leads, bridge the gap from the manufacturer to contractor and even end user, create relationships in the supply chain, help finance contractors when banks won't, help contractors grow there business, carry unique product lines not found in big box stores, and much more. Many distributors have forgotten the value they bring, and have become price focused thinking if they have the lowest price then this is the only value they bring. Unfortunately many operate and believe this. Pricing is just a race to the bottom, distributors need to remember what a distributor is, and stop acting price focused as distributors are not flea markets and should stop acting as ones. Distributors must evolve and adapt, and further not give up to the ever growing competition from the big box stores to the off the boat products that infiltrate our markets. Distributors have value over any big box store, and contractors just need to be reminded of the importance we play and the value we offer to them. Distributors and manufacturers must stand united, not only believing in the superior products they sell but working together as partners to offer the best service and products to the end users and ensure the best experience from raw good to the purchase, to the install. Lastly distributors must act as distributors and stop undercutting one another, again we are not flea markets, focus on providing stock and service and in the end relationships and the experience the customer walks away with is the way we all win.

Anonymous said...

Good for you in initiating this conversation. It shows just how much disconnect exits between some suppliers and their distributors. The more we get this in the open, the better our collective chances of developing better relations and a winning strategy.