Top 3 Issues Impacting The Distributor/Supplier Relationship

At GAWDA’s annual convention in September 2008, eight groups of Distributors and Suppliers met together in a roundtable format. Each group was asked to summarize the three most important concepts and/or action ideas discussed at their roundtables. The list below contains all of their responses, provided in order of importance.

# 1

• Preferential treatment of large distributors by suppliers is especially irksome.
• GAWDA mailing list updated: name, title, location, vendor (approved), price, new products, announcements, changes.
• Suppliers selling direct: How does this affect the distributor’s relationship with the supplier, and how does it affect the distributor’s relationship with their customer?
• Communication between suppliers/distributors; Web initiative from supplier/sales logics—sales struggle with it (source of program activities, product announcements); Webinars from suppliers/best.
• How to keep the personal relationship in the electronic age: What is the best way to communicate (e-mail, fax, phone, face-to-face)?
• Need to create a system that allows distributors’ computers to speak directly to suppliers’ computers.
• Distributor/supplier partnerships as they relate to marketplace issues, i.e., selling direct are always going to be an issue that should be resolved at the local level as opposed through headquarters. Relationships need to be developed and worked at continually.
• Regional Meeting to discuss new products, train a group of distributor employees, networking, standardized checklist to be accomplished. Meet to discuss a plan—feedback. Both parties are valuable. Maximize profits. Transparent with each other—take waste of supply chains. Quality salespeople on both sides.

# 2

• Communication is paramount.
• Stronger relationships with vendors/distributors to increase turns and returns (margin). Use technology.
• E-commerce – advantages to accepting online orders. Industrial customers vs. spec gas customers; spec gas customers tend to use e-commerce technology much more.
• Consolidation: Supplier territories are growing, not able to spend as much time with distributor sales.
• Distributors are looking for stronger technical support from suppliers.
• Suppliers need to make sure they maintain the relationships with distributors’ branch managers and outside salespeople both by e-mail and with in-person visits.
• Pricing differentiates between small independents and large/national distributors may be minimized through participation in a “buying group” such as the IWDC, ADA, etc. More information on such groups should be made available to membership.
• Technical support—level of quality decreasing on both sides. Cost to serve. Teleconference to communicate and reduce expenses. Webinars. Direct sales—consumables—dealing with facts. No value? If no value is being delivered at risk, is there room? Should the manufacturer walk?

# 3

• Direct to end-user sales stress the relationship.
• Reduce costs by better use of e-commerce. Placing distributors up one generation. Order fulfillment. Shorten the sales cycle.
• Price changes: What is the best way to notify customers and how to justify significant price increases?
• Direct sales by vendors: No inclusions of distributors last five years; less business so suppliers go direct.
• Make conducting sales calls easy for the distributor. Provide tools so the distributor doesn’t have to take product off the shelf.
• Technical support.