What It Really Means To Work With Distributors
Some building service contractors and facility cleaning executives still believe that purchasing from big box stores, online, or through supply houses will result in savings on their bottom line. But I’d argue that one should look at the overall benefits of working and partnering with distributors, instead of seeing only dollars and cents.
In conclusion to the thoughts and suggestions I have expressed in prior articles, I do not believe that purchasing only from big box-type outlets is sustainable. Eventually you will see the benefits of having one or two distributors who can provide not only competitive pricing but also provide technical support and training that you are not getting now.
I do not believe that you are saving as much as you think when compared to the time and resources expended by working several local vendors as well as shopping big box stores and the Internet. Your time should be valued and focused on growing the business.
If you reduce your product and equipment costs by 10 percent, what does that really mean? Based on the information you provided, your total supply costs average about 5 percent of total costs while equipment (after depreciation) only counts for about 4 percent. So when you claim to be saving 10 percent of supply and/or equipment costs it is not nearly as much as you could be saving if you focused on reducing labor costs which amount to 80 percent of total costs.
Since you can only do one thing at a time, I highly recommend you dedicate a specified time per week or month to shop for good pricing, share that information with your distributor and see if he can match or at least come close to that number. I also recommend that you spend most of your time focused on reducing labor costs and growing your business. Best of luck.
Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean...
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net