31 replies to this topic

[Remy]

I just had this happen one time too many. I talked with my client about a variety of items. They chose 4 items and asked for spec samples. I got them the samples and quotes for a rather large quantity. They loved the products, sent reqs to the purchasing agent who decided to put the whole order out to bid.
My question is....since the manufacturer gets the job anyway (we specified their product) shouldn't we as the person who initiated the process, and got them the business, be rewarded in some fashion (better pricing on the quote or a "finder's fee) if the item is ordered from that manufacturer?
Remy

[jschmitt]

Remy,

I would agree with you. The problem is its a dog eat dog world for the manufacture also. They are more concerned with bringing in an order rather than making distributors happy. I would think if you did a large amount of business with the supplier you would have the advantage.

[tmertz]

Most products can be purchased from multiple Suppliers. There is no assurance the Supplier will get the order either.

I suggest to Distributors that they get the "order" first. Once that is done any number of production samples can be produced to ensure the accuracy and quality of the product.

Most Suppliers are willing to provide samples that will represent the quality of their work.

Production of the product with the customer's imprint becomes more of a proofing process than a sales process. If the customer is not happy with the preproduction sample or proof they can then cancel the order.

[jschmitt]

Tom,

I like your suggestion. You made a great point! Its a win - win situation for both the distributor and supplier.

[Remy]

Tom,
That's great in practice. In reality that's not always possible. The end user wants to see the product before they order. The Purchasing dept. only cares about the order when it's being placed.
Why can't you (as a supplier) give me (as a distributor) a better price for sourcing your product. If you get the order great. If not you didin't lose anything. We both benefit. If I get the order you get the order. If I don't get the order you may or may not get the order butyou haven't "lost" anything by giving me a better price.
Remy

[tmertz]

I don't really understand your question about giving you a better price for sourcing our product. What do you mean by sourcing?

We always provide Distributors with as many samples of our products as they need. The samples just do not have the customer's imprint on them.

[Remy]

I have thousands of products to choose to show my customer. I am choosing to "promote" your product based on their needs. (I'm talking about a large quantity order that requires special pricing.) I've done all the legwork and now dealer B who did no work gets asked to bid. Why should the distributor, who just happens to be 1 of 3 who gets asked to bid on the product I did all the work for get the same pricing as I do? I'm saying why not reward the distributor who chose to specify/promote YOUR product.

[Joe Denhoff]

you can't prove to a supplier that you showed his product, that may be a problem.
The real problem is the purchasing people. It makes me ill to hear stories like that and it has happened to me. I do all the work, my idea, my sample, my presentation, my time & effort. They like the product so put it out to bid. That is an awful feeling. And there is no way to educate the people that do this. I call it corporate greed.

Some clients want to pay as little as can be for an item but yet they are grossly overcharging on their end for product or services. I know a guy in the clothing business. He told me every suit he gets cost 65.00. he charges 600, 400, 200 on sale and we think we just stole it from him.

[tmertz]

Remy said:

I have thousands of products to choose to show my customer. I am choosing to "promote" your product based on their needs. (I'm talking about a large quantity order that requires special pricing.) I've done all the legwork and now dealer B who did no work gets asked to bid. Why should the distributor, who just happens to be 1 of 3 who gets asked to bid on the product I did all the work for get the same pricing as I do? I'm saying why not reward the distributor who chose to specify/promote YOUR product.

Over 60,000 orders come to TradeNet every year. Since we only sell through Distributors EVERY one of those orders was presented either in person or through marketing material by Distributor "A". TradeNet provides Distributors with over a million mini catalogs and over 3 million self promotion items each year. Hopefully each of those is presented by a Distributor "A" to a potential buyer.

What program would you suggest Suppliers implement to determine whether the order we received was from Distributor "A" or Distributor "B" the distributor that did not make the original presentation or spend the money mailing our mini catalog but was offered the opportunity to bid?

How would the Supplier identify whether the order came from Distributor "A" or "B"? If we called and asked would we then discount to "A"? If we called on every order and asked this question I would guess 99% of Distributors would indicate they were Distributor "A".

Have you ever been Distributor "B"?

[Mike Betts]

I was on the supplier side of the business for a number of years and had an interesting similar story...

I was the Sales Manager for a Custom Leather Manufacturer in this industry. One of our good clients came to us and asked us to produce a spec sample for a major account. Our company did not stock product â?? everything was constructed to order, so imagine the price tag for a one-off custom item. The charge for this sample was about $200. He picked it up in the morning and went directly to his meeting. Within 3 hours, our custom made spec sample was back in our office. However, it was brought in by a different distributor asking us to quote the item for him.



The customer had the distributor create and pay for a spec sample and then within minutes turned it over to another distributor to see if he could squeeze a better price.



By Canadian Law we could not give a different price on the exact same product in the same quantity, all we could really do was provide better terms for payment and a small reduction in die and art charges. But our hands were pretty much tied.



It is not the supplier who is at fault in this situation. It is your customer who you have to have a better relationship with, so that they not only do not want to go to another distributor, but feel that they really canâ??t do better with the services you provide.

That all being said, as mentioned by Tom, most companies will provide "random samples" at no or fairly little cost. If it is also important to show the customer what their logo is going to look like on that product, you can easily produce a virtual sample of the prduct, to accompany the random sample.

Hope that helps.

[tmertz]

Joe Denhoff said:

you can't prove to a supplier that you showed his product, that may be a problem.
The real problem is the purchasing people. It makes me ill to hear stories like that and it has happened to me. I do all the work, my idea, my sample, my presentation, my time & effort. They like the product so put it out to bid. That is an awful feeling. And there is no way to educate the people that do this. I call it corporate greed.

Some clients want to pay as little as can be for an item but yet they are grossly overcharging on their end for product or services. I know a guy in the clothing business. He told me every suit he gets cost 65.00. he charges 600, 400, 200 on sale and we think we just stole it from him.

Joe,

In your second paragraph "yet they are grossly overcharging on their end for product or services" you explain why purchasing managers must check pricing.

It is not a matter of corporate greed. It is prudent business. The larger the organization the more prudent it becomes. If purchasing managers do not perform this function in today's competitive enviroment the business will not survive.

I don't like it any more than you do, but I realize it is reality and I have to keep TradeNet pricing and purchasing competitive or I am out of business.

[donnacbi]

On this issue, may we also bring up the possibility of charging the customers for the samples, thus being able to lower our black holes of shipping and sample costs. Most of my clients will not pay for samples, thus having to make me the creative one. Where else do you get something for nothing? If they get these samples so freely, they want more, and do not really consider what they are asking to see, just to see it because they want to. I know some samples are free, but not all are. I am working with a client on a high price item, and have 7 samples to show. I know I have the deal, and that helps. But many times we are in this bidding war.
It would be nice if we all charged the clients, instead of having to be creative and remembering who gets what where.

[Martyk1026]

I am going to throw my two cent in here. As a distributor, I empathize with the situation described here. Yet, suppliers are between a rock and hard place when it comes to the end user competitively quoting out the ideas and spec samples that a distributor brings to the table. What options does a supplier have? You negotiate a price, and if another distributor comes in with the same specs, they need to quote the same price in order to insure fairness in the process.

The client is the one at fault here and doesn't care about the time and expense that the first distributor invested. They just pass the specs out and ask, "What's your best price for this item." With no time or money invested, any knucklehead can low ball the project and make a lot of money for 15 minute's work, using no brain power at all. Happens every day of the week.

So, if you might get caught in that trap, you need to establish an up front agreement with the customer. "If I generate ideas, produce and procure samples for you, will you place the order with me?" I have no problem telling clients that anyone can come in with no time or money invested and low ball to make a quick buck. It's one of the ugly facets of business, this one in particular. At the very least, get an agreement from the customer to give you the FINAL crack at the price. And if you can't get that and the client abuses you, then you need to think about working with a different client. Who needs to be in an abusive business relationship?

[donnacbi]

Here here!!! Well stated. Totally agree.
Donna

[sdmillar]

Marty, I could not have said it better myself. Our line has taken the approach that we do not brand our product with our line name so this enables distributors that came up with the idea to have a better chance of keeping the exact details from the competing distributors to bid the same item out. This encourages the most creative distributors to use our line, though we realize that sometimes this is not to our benefit as not having our name on all the bags we ship out does hurt the brand awareness of the future, we feel that the protection this gives the origianting distibutor is better in the long run.

[Martyk1026]

I respect the fact that you do not brand your product, because THAT is the one thing that puts any distributor at risk when providing samples or images. Any type of identification, whether it be the brand, ASI (or other association) number, SKU number, etc. enables the end user to take your idea and shop it. Whenever I present an item, I usually convert it to a jpeg and wipe out the identification before presentation. There is another bag company out there (whom I shall protect by leaving nameless...but it rhymes with "weeds"), that puts its name on everything imaginable. In multiple places, no less. Not only do I find it troublesome, a number of my customers hate the fact that they are forced into co-branding and that their brand has to compete.

I respect you for taking that approach for a second reason, because you also have to compete with firms, like the previously mentioned unnamed company, who DOES brand. I hope for your sake, that you have customers, who appreciate what you do and why you do it.

sdmillar said:

Marty, I could not have said it better myself. Our line has taken the approach that we do not brand our product with our line name so this enables distributors that came up with the idea to have a better chance of keeping the exact details from the competing distributors to bid the same item out. This encourages the most creative distributors to use our line, though we realize that sometimes this is not to our benefit as not having our name on all the bags we ship out does hurt the brand awareness of the future, we feel that the protection this gives the origianting distibutor is better in the long run.

[sdmillar]

Thanks Marty, I appreciate the kind words. If you get a chance visit our site at www.directbags.com. You sound like just the type of distributor we would be excited to work with.

Thanks again

[Tom Aufman]

Remy said:

I just had this happen one time too many. I talked with my client about a variety of items. They chose 4 items and asked for spec samples. I got them the samples and quotes for a rather large quantity. They loved the products, sent reqs to the purchasing agent who decided to put the whole order out to bid.
My question is....since the manufacturer gets the job anyway (we specified their product) shouldn't we as the person who initiated the process, and got them the business, be rewarded in some fashion (better pricing on the quote or a "finder's fee) if the item is ordered from that manufacturer?
Remy

The Secret to success is the Ability to Conceal the source. I decided long ago Not to work for nothing.
I tell them up front of my terms of doing business. ...The Order belongs to the one that makes the sale. Manufacturers that deal direct could care less.
Tom Aufman

[PromoUltraSource]

Interesting to observe the comments, expectations, and suggested approaches discussed on this topic ... though I didn't get much of a sense of relationship selling anywhere, given our industry's current distribution channel model (supplier/distributor, distributor/buyer) ... just price cutting - demand until you get it or go elsewhere -- the very thing our industry practitioners preach not to embrace.
I find building supplier relationships (in terms of their provision of effective selling tools - free samples, literature, preferred pricing based on loyalty/sales volume/situational needs) to be a fair give n' take on the supplier/distributor segment of the distribution model.
Afterall, "nothing happens until somebody sells something." and "out of sight, out of mind," so suppliers have a very definite vested interest in getting their products in front of distributors, but also motivating them to promote & sell their product line over brand X.
Same goes for the distributor/buyer segment of the model. If you invest nothing in building a client relationship, all you have to sell on is price and in most cases you're sunk before you begin because there will always be someone willing to sell for less, Always!
People are what make the difference! Where have we heard that before? Problem is, our industry isn't based on simply being discount retailers ... we're supposedly promotional specialists, providing effective service and mdse. that generate results for our clients vs. bulk mdse. customers.
At least I think that's how it's supposed to work?

[Martyk1026]

With regard to your comments about "relationship selling," in the situation described, remember...it is the client that goes around the original distributor that services the account and avoids a relationship in favor of price. It sounds to me that the original poster very much worked on building the relationship by listening, asking questions, providing creative ideas, contacting suppliers, and ultimately getting artwork and spending the time and money to produce a spec sample. That seems like the activity of a distributor, who is trying to be a very good "suitor," intent on bulding a relationship. However, if the client has a mission to get free consulting, so he or she can then shop for the best price; then that suitor doesn't really have much of a chance to build the relationship. That's why I say, get an up front agreement, that they will either pay for the sample, place the order with you; or at the very least, give you last chance to match pricing in a bid situation.

If a client is going to abuse the distributor like that, then who needs that kind of client? Of course, it sounds great coming off my fingertips as I type this, but I also have one that keeps abusing me, and like a schmuck...I keep responding. It's not that she uses me and places the order with someone else; but rather uses me for info, and then the project gets killed (or so I think). Abusive relationships really are hard to get out of sometimes.

PromotionUltraSource.com said:

Interesting to observe the comments, expectations, and suggested approaches discussed on this topic ... though I didn't get much of a sense of relationship selling anywhere, given our industry's current distribution channel model (supplier/distributor, distributor/buyer) ... just price cutting - demand until you get it or go elsewhere -- the very thing our industry practitioners preach not to embrace. ...