Business Management

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You worked the proposal all the way to the finish, you are comfortable with the other subs on the project, on the same page as the interior designer, and the timing works with all the other crap on the calendar. The design, labor, and costs came in as expected, and the client indicated that your “trial close cost estimate” was in line with what was excepted.

You send or deliver the proposal and the agreement, then all of a sudden, the client is MIA. Gone. Not returning emails. Just fallen off the planet.

So, the target client seems to have evaporated into that “why hasn’t he gotten back to me” anechoic chamber type of painful silence.

Nada, zilch, ZERO, the work invested, the referral trail, and the profit… down the drain.

Whiskey Tango Foxtrot?

In this case, the client googled some of the products on your proposal and found your brand of speakers for about half of what you were charging, and below your cost, then decided that you intended to rake them across all the products pricing wise.

There are many scenarios in our industry where this happens way too much. From the Administration and Executive Tower at the Weld World HQ, the general observation of the Weld2 strategy team is that in today’s environment:

Dealers are more loyal to suppliers then suppliers are to them.

Upon further research, the client found your proposed architectural speaker brand and model from some online supplier that was willing to gin up a large order from the manufacturer, then unloaded surplus inventory.

You got shelled by a trusted supplier.

This dealer/client example is tragic – how much has been invested from the supplier’s perspective, into generating a living breathing brand evangelist (the dealer) that went out and found a prospective buyer, and created a brand preference within the mind of that user (and on behalf of the vendor).

For our vendor type readers out there, our question to you is: How do you want your dealer to feel about you?

Many vendors vacillate between direct and rep models, or going direct and through distributors, each having to decide which is right for them at the time, but things change.

Another: If you, as a supplier, join a “buyers group” and now start selling a new competitor to your long-term loyal buyer, one that has remained your partner through problems through thick and thin, through the trials and the tribulations that your QC team missed…and you are now selling to a new dealer at lower price…. placing your seasoned partner at a price disadvantage… and we all get the point.

Just how, dear vendor, do you want them to feel? Do you expect them to remain loyal to you as you offer preferential pricing to a new and upstart?

Note: we understand many vendors are bending over backward - sacrificing if you will - for their market, and remain steadfast sentinels to their dealers, there are many fine examples.

Over time things change though, people move on, vendors get purchased, management modifies strategy, and the economic reality shifts and the vendor adapts.

Got the point, but is there an answer?

Everyone knows that things change, just these changes should not surprise or shock the dealer. We suggest that dealers start by having their vendors fill out applications that require them to reveal and keep you up to date on their go to market approach.

There will always be distribution conflicts, but this approach can take much of the drama out of the equation for both parties.

The purpose of this document is to lay the foundation for a positive and predictive working relationship with your vendors. All vendors have dealers fill out applications and to oversimplify this, the manufacturer is asking you to fill out an application so you can send them money?

Few integrators use this method, but given the current economy, it might work for both parties. If you are just getting started with this - have your vendors (and/or Rep firms and distributors) fill one out.

Couple things to point out:

By having the document filled out, the supplier will disclose, define and discuss their intended distribution strategy and their position about on-line opportunistic sales – and what that could mean to your relationship (think “over- distribution”).

It also asks to get the buyer's group pricing - without your having to be a member. Nothing wrong with choosing to be members, and there is nothing wrong with them if they hold a harder line for those members exclusively.  But, if possible, you don’t want to be disadvantaged by that one issue.  Nothing wrong with asking them why they would subject you to that pricing bias and disadvantage just because you did not want to join some other group .… and why the vendor favors those who might not be as loyal to them as you have been or will become.

Your argument: “Our firm is deeply established within this community and amongst our target demographics. This application had become critical given the exploding number of suppliers, aggressive and unpredictable economic realities that vendors are dealing with.

It is not our intent to be confrontational or difficult but over time we have found that once stable partnering company’s change tactics, personal or selling strategies without warning. We have been financially damaged in the past and wish to maintain a profitable and predictive relationship with you. We wish you great success within our firm.

Nothing will kill our relationship with you faster than if we lose a client relationship due to unpredictable tactics or being at a price disadvantage with our competition, all we are asking is that we are treated fairly. Some of these questions could present a challenge for you, we understand. We both want the same thing - a positive profitable growing relationship, without negative surprises.

At the end of this, we need our vendors, and our vendors need us, there are many examples of exceptional and noble long-term behavior from our suppliers. And on their side of the ledger, each has stories of off the rail cheating dealers too.

We are all in this together, let’s be transparent in our expectations and market approaches.

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