Where do you to turn for support?
Have you you thought of using your distributor as a way to grow your business? Because when you think about it, your distributor wants your business to succeed as much as you do; if you are getting paid faster and turning more jobs, you’ll be buying more. They win too!
If your current interactions with your distributor are only to submit orders, take delivery, and pay bills, you’re missing on an opportunity.
Let’s cover 5 things you need to know when you make your distributor a resource...
1. How Your Distributor Can Grow Your Business
You are an expert in your own company, and likely a leader in your field. This perspective gives you insight into your day-to-day interactions, but if you’re looking for a bigger picture, ask your distributor. The people working at your distributing company see hundreds of work orders from many different companies and contractors. Each company and order brings more information to your distributor and gives a different perspective. While they won’t divulge trade secrets from one business to the next, they have their fingers on the pulse of the industry, and can see the trends developing.
Your distributors know contractors need to control three major expenses to make increase job level profitability:
- Direct Labor
- Direct Materials
If your job level profitability isn’t increasing year after year, your distributor can help you figure out ways you can improve to increase your top line revenue. Your distributor may be able to show you ways to earn more from each job while keeping homeowners happy. Start off by asking questions, lots of questions.
Keep in mind, distributors aren’t looking to lower their prices to help you succeed, rather they have the tools to help you make more money. Distributors offer fair prices; they know how much their competitors charge, and at what point they make no money and give you deals accordingly. They also know that some very successful contractors charge premium prices and compete on quality etc. It's not all about price. If you think the only way to increase your revenue is to lower material buying price, there’s something wrong.
2. Types of Resources Available
Distributors offer many different services to help contractors sell on value, not just price. Distributors often package these into a program. Examples include:
- Engineering / technical advice to design better solutions for a consumer project
- Technical Training (especially from manufacturers)
- Sales training to sell on value, not just price
- Business training to run a tighter ship
- Contractor credit (for you) to take on larger jobs
- Consumer credit (for your customers) to help homeowners get the best solution, not limited by cash on hand
- Lead generation, co-op marketing assistance, and trade-show support
- Factory Authorized Dealer program
- and so on...
The program is often structured as a trade-off. In exchange for putting more of your business with the distributor, the distributor offers these services.
Try asking your distributor for insights into where you can improve by working differently. The distributor will lead you to services like these and use their big picture perspective to help you grow.
3. Which Distributor To Use
We know contractors often buy from multiple distributors to keep them competing on price and availability, and because each offers product depth/knowledge in different areas. Choosing one distributor to partner with more closely can raise tension in the office and with other distribution partners. You may be asking “Why would I divulge more of my business to someone who will use it to bid higher and keep more money from me (i.e. a zero-sum game)?“
If you feel that way, try to change your perspective so you don’t miss out on a huge opportunity to grow. If the information you trade brings more to you in returns, then it's worth trading. This should be a conversation. The distributor you choose to go deeper should be the one who offers better ideas and help on implementing them.
Remember, you should be comparing all distributors you might partner with! You don't have to marry them on the first date. You can interview several distributors and decide who to dance with.
4. Who Specifically To Ask For Help
Start with your territory rep or inside sales rep. Sales people want their customers happy, and they often have goals to grow willing customers. A resourceful sales contact is like your personal consultant, they know what questions to ask internally to link you to the resources you need. If they don’t know how to link you to resources, they’ll make introductions to people and business that can help.
Many distributors have a dealer program for their most loyal contractors that brings them best practices. You may be a candidate. Challenge them on the value of the program, and how they can make you a distinctive choice among your competitors.
5. The Biggest Challenge: Finishing What You Start
Distributors cite 3 big challenges to programs working:
- Engaging contractors in the conversation
- Finishing implementing the program at the contractor
- Staying in-sync with distributor updates at the contractor
Contractors should have a blunt conversation with the distributor about how they'll both work together to get past these obstacles. Having a contact person from your company to act as a liaison between your distributor and your team can help keep conversations active.
Once you find the resources you want to use to make your business more successful, make a plan with how they will be implemented at your company. Distributors want the least resistance for you when transition to new software, or partnering with a consultant. They can help in your transition, so let them!
Beyond that, you can set specific times (maybe quarterly or yearly) to see what new services your distributor has to offer. Each company is different, and there might be an amazing partnership with other local businesses you can use to your advantage, you don’t want to miss out on that. So you have to make sure to start the conversation!