Goldie Locks and the Three Distributors
There are many factors to consider when choosing a vendor or supplier that is right for you. Ultimately everyone pretty much agrees, you want to work with sources who consistently offer the best products and services and whose sales people are well-trained and experienced to assist you. The staff should have a helpful attitude toward you, the customer. Like any relationship not every affiliation will be a good match. Most importantly both the customer and distributor should be willing and eager to work together in order to grow both businesses. I thought I’d take an ‘old-school’ approach with a bit of humor to illustrate some basic points.
The Nursery School Guide to Selecting a Distributor That Fits Your Needs: Goldie Locks is in need of a supplier for materials and parts used in the production of her lumber and wood products (which explains the age old question of why she was wandering the woods!) Ms. Locks is reviewing her options and comparing three distributors.
First Goldie Locks called up each distributor to find out a little about them.
Too hot – The first burly company was huge, but it seemed most concerned with only offering higher-cost options to replace existing materials. Common or usual products are often not available from stock due to a shortage in the market and they have no solution for handling these hot items.
Too cold – Goldie Locks had problems getting assistance from the next distributor. This organization is showing no warmth to her concerns, and they don’t offer any new or improved product developments from the market.
Just right – The third supplier Goldie Locks called offered her a mix of the newest materials as well as inventory options for her business. They also provided some value added services like cutting her order to a size she needs it. They aren’t the cheapest but Goldie Locks figures the other services this distributor offers will save her money in the long run. Last but not least, sales and management personnel were easily accessible, knowledgeable about their materials, and friendly.
Next, Goldie Locks looked at things like size, location and other company information. After all, getting the right materials is important and she doesn’t want to get all set with a distributor and then find out they are not a good fit leaving her to search all over again –
Too big – This distributor is a huge conglomerate with an impressive resume but they lack personal attention. Goldie Locks fears she’ll get lost in their volume and be just another account. Bigger isn’t always better says Ms. Locks!
Too small – This place has nice people but she is concerned about long term growth and sustainability. Ms. Locks has big plans for the future and hopes to expand. This distributor’s limited locations also limit shipping options. This small distributor would not have access to product lines from all the manufacturers she wants material from either.
Just right – This distributor combines the personal interaction and service of a small company but with the resources of a global titan. They carry a large inventory and they offer other services like just in time shipping so Goldie Locks doesn’t need as much storage at her business, but with their inventory she can trust she will always get her order fulfilled.
Too hard – The biggest distributor generally lacks flexibility. There are large minimum orders and rigid terms. The contacts involved don’t have the direct authority to negotiate, sign a contract, or make other business decisions; but rather have to await some corporate approval or process.
Too soft – This company may just tell her what she wants to hear, Goldie Locks noticed a tendency to over promise and under deliver. Plus, being a smaller operation this supplier would be unable to use their weight in dealing with manufacturers and they are hindered in developing new opportunities.
Just right – This organization has a wide selection of materials from numerous suppliers so they present options for her business, but ultimately they give her the facts and allow her to make the decision about what is best for her business without undue pressure tactics.
By the ens of her search Goldie Locks found her ideal supply partner is flexible, nimble, and easy to do business with. They are large enough to have all the materials she needs in stock and ready to ship, and even though they aren’t the cheapest, they offer service that helps her to save money over the long term. She is happy in her choice knowing the time spent up front to find that just right distributor will allow her to grow her business with no worries about the materials she needs to keep on hand.
**Neither the author nor company asserts any ownership to Mother Goose, Cinderella or any other fairy-tale creatures
Lin Poulin (aka Mother Goose)
ThyssenKrupp Materials NA
AIN Plastics Division
Entrepreneur magazine, April 2010, ‘Build a Good Relationship with Suppliers’ author Bob Reiss
Entrepreneur magazine, ‘How to Find and Work with Suppliers’
IAPD (international association of plastics distribution) “The Distribution Channel Value”, content provided from NAW (National Association of Wholesaler-Distributors) http://www.iapd.org/distribution value