In today’s competitive marketplace, it is becoming increasingly difficult for business leaders to choose the supplier that best fits the needs of their companies. Giant, Mega distributors, local wholesalers, national retail chains, and online e-businesses are all competing to be the supplier of choice for trade contractors. Furthermore, there is the introduction of new products and technologies at such a rapid pace that it can be challenging for everyone to keep up with it all. The reality for most distributors is that they no longer have the luxury of being able to just buy and sell products if they want to add lasting value to their customers.
With that being said, how do contractors choose the right wholesale distribution suppliers among all of the options?
Lowest Pricing Isn’t Necessarily Highest Value
Traditionally, many contractors have chosen distributors simply because they offered the lowest prices (I’ll go ahead and mention that distributors often have tendencies to choose suppliers the same way). Easy enough, right? While competitive pricing will always be important, it isn’t necessarily a great indicator of the overall value a distributor provides to a business relationship with its customers. Due to the competitive nature of today’s business world, there are many other factors to consider when deciding which supplier gets the bulk of the purchase orders. It’s often very beneficial to take a step back and look at the entire offering of services before defaulting to the lowest bidder.
Here are a few things that some of the best distributors do to add value to any contractor’s business.
They Provide Online Ordering Capabilities
Distributors that offer online ordering through e-commerce give their customers options that enhance the overall ease of doing business. An e-commerce website allows the distributor to be “open for business” after traditional working hours.
Contractors can place orders, check pricing, view availability of products, and find technical information at any time. This can be a huge benefit for contractors during busy workdays when it can be difficult to find time to call or swing by their local supply houses. Aside from simply placing orders online, a distributor with a good e-commerce system can also give contractors many other benefits to their businesses, including account balance inquiry, online bill payment, and past order history lookup.
They Conduct Business Relationship Reviews
The best distributors always view relationships with their customers as long-term partnerships and invest time in regular communication that will keep the partnership thriving. In addition to traditional sales calls, good distributors will schedule business relationship review meetings with their key customers at least once per year — sometimes more. The purpose of these meetings is to discuss what has been working well for both parties and identify any areas for improvement. Business relationship reviews also provide a great opportunity to collaborate on future growth strategies that will be mutually beneficial.
They Have Knowledgeable Sales Teams
Technology, products, and even governmental legislation are changing so quickly that contractors need to find distributors they can trust to give them reliable information. Even though e-commerce websites and internet search engines can provide a wealth of information for contractors these days, it is still important for distributors to have very knowledgeable sales teams at all levels of their organizations. The best distributors realize that outside salespeople, inside salespeople, and counter salespeople are all equally important information resources from a customer’s perspective. Strong distributor sales teams can add tremendous value to busy contractors who need help troubleshooting technical problems or finding the right product specifications.
They Offer Training Opportunities for Their Customers
Besides training their employees, top-notch distributors will also invest in providing training for their customers. It is common to see the best distributors provide a multitude of training resources that will best fit the needs of each specific contractor. Some of the instruction may occur in a traditional classroom-style setting, or it can also be common to offer hands-on training classes. In some instances, distributors will even offer webinars or online training courses that contractors can complete at their own pace. Regardless of the method, distributors who offer opportunities to help customers learn will add value to all organizations.
The Bottom Line
All things considered, wholesale distributors can be very different from each other when it comes to the value-added services they provide customers. Some will go to market with rock-bottom pricing and limited sales support, while others will offer a variety of additional benefits contractors will happily pay a little extra to receive. When contractors can scope up from assessing pricing alone and evaluate their suppliers based on the overall value they provide, the highest quality distributors will always stand out from the pack.
Mark W. Bray is the director of supply chain at ACR Supply Co. He holds a bachelor of science in industrial distribution & logistics and a master of science in technology systems with a concentration in distribution & logistics from East Carolina University. Bray also holds leadership positions in HARDI’s Distribution & Logistics Management Committee and on the Raleigh Roundtable Chapter of The Council of Supply Chain Management Professionals. He can be contacted at 919-765-8380, email@example.com, or @MarkWBray on Twitter.
Publication date: 11/28/2016