I recently attended the AHTD Spring Meeting.  I always enjoy these meetings.  They keep me up to date with the industry and always provide plenty of networking opportunities.  It's important to eat meals and have drinks with future friends (I've never met a stranger) to gain insight.  During an after-hours meeting one night, a brand-new sales manager asked me about keeping customers as prices continue to rise. I thought back to an article I wrote for IMARK Now Magazine.  Specifically, I addressed how distributors could find new customers and nurture their current customers.  I began the article with these half dozen thoughts I believe distributors everywhere should use to better focus their businesses:    Thought One:   Over the years, distributors have done a poor job of selecting their customers.  In many instances, it is the customer who selects the distributor for reasons often unknown to the distributor. Thought Two: The cost of br...

Distributor owners know, without a doubt, that people are their biggest asset.  They are correct in that nearly 60 percent of all gross margin dollars go to paying employees, but that’s not what I have in mind.  People are important to salespeople and often the importance transcends a purely business relationship.  Long-term customers often become friends, allies, and occasionally future business partners.    Moving a person from a stranger to an important customer, business ally, or even a personal friend, is a time-consuming and difficult process.  Here is a rough and simplified outline: 1.      Identify the person who might have the ability to influence the purchase. 2.      Gather background information on this prospect. 3.      Determine the points/product features the prospect considers important. 4.      Provide information and answer questions to build credi...

First a personal proclamation:  I am a proponent and advocate for membership in distributor associations.   After fourteen years of working for the manufacturing side, I attended my first such meeting back in 1991.  The first meeting was scheduled by the owner of our company.  I expected to have fun, make some new friends, and maybe learn a few pointers on the nuances of running a distributor.  I did; however, I also observed a couple of negative things that were, quite frankly, disgusting to me.    The negative points -the boondoggle thing Some distributors saw these meetings as a tax-deferred vacation.  They came to play, not to work.  As a young, and perhaps idealistic, distributor of 37, I was determined to grow my business and make a difference in the industry.  I saw several people whose only real involvement in the meeting was participation in the cocktail hour and going out to dinner with friends.   While I ...

I needn’t say too much about the current situation tied to Pandemic leftovers.  If you are one of the three people in Distributorland who hasn’t heard or talked about these three driving issues, let me tell you, they are real. 1. The difficulties in attracting quality/qualified employees. 2. Supply chain issues and shortages of the parts your customers need. 3. Ongoing price increases and inflation. I want to provide a demonstration of how the combination of supply chain issues and inflationary pressures needs some management attention. A glance at supply chain “stuff” It’s not impossible to get products from our suppliers, it’s just impossible to receive them on time.  Despite all the media hype tied to supply chain issues, our customers are not quietly sympathetic.  They still have factories to run and machinery to ship.  Most customers still judge our service on getting products to them when they need them.  They bark, bother, and badger distributor sa...

I have been a fan of Al Bates for the past three decades.  Nobody understands the financial drivers of distribution like Dr. Al Bates.  Those of you who have worked closely with me have probably heard me talk about Al and his efforts on behalf of distributors.  Further, if I ever mentioned the “Whale Chart,” which demonstrates how over half of the typical distributor’s customers subtract from the bottom line, that is a concept I discovered through his work and conversations with him.   I am currently reading his latest book, and rather than give you a book report, I have asked him to share his thoughts on the book. Please welcome as a guest blogger, Dr. Al Bates.  Smaller distribution businesses have three important characteristics:  1) They are fun places to work since they aren’t bureaucracies, 2) they are highly innovative because they have to be to survive, and 3) as a group they don’t make anywhere near the profit that they should. My work with small d...

Several years ago, Jenny tied the end of year planning season to the dreaded Mid-Western season of raking leaves.  The two share several similarities. Here is the shortlist: 1. Leaf raking and annual planning are dreaded by most people. 2. You never really get into a zone, because by the time you get into the groove the work is done for the year. 3. If you ignore either one, next year you will regret it. 4. The longer you put the activity off, the harder it will be to finish. 5. An early start saves a lot of work at the end of the season. One big difference is this:  You can’t hire a neighborhood kid to do your end of year planning.  With this point in mind, we thought we would share a few things to think about for your 2022 plan. If you are planning for 10 percent sales growth, you better think again Reports from across half a dozen industry sectors indicate that manufacturers are laying down a steady stream of price increases.  One distributor told us ov...

Over the past few months, I have been working closely with David Gordon of the Channel Marketing Group.  David is laser focused on the Electrical Distribution Channel.  His blog, Electrical Trends is widely read by those who call themselves electrical distributors.  This is a large and diverse group.  They range from people who are full ahead knowledge-based distributors to those who might be better categorized as “supply houses”.    We have discovered, the issues are very similar.  A good many in the electrical channel wonder who is doing the selling.  More importantly, how does this selling impact the operational costs and how should a distributor (and their supply partners) look at the overall direction of their business?  As suppliers continue to broaden their product offerings and fight for market share in sometimes niche areas, these suppliers must review and take a new look at precisely who is doing the selling.    Wi...