Deciding When BSCs Should Buy From Janitorial Supply Distributors
When purchasing supplies, is it better for building service contractors to buy direct from manufacturers or through local distributors?
At first glance, it makes financial sense to purchase directly from the manufacturer. The cost of acquiring goods can be reduced by eliminating the middle man. However, the cost of goods is just the starting point of the total costs for supplies.
In order to determine which route makes more sense for you, you’ll first have to determine the costs associated with some critical tasks.
Inventory Control: Who will maintain the records and take the inventory? Will a distributor representative or manufacturer representative come in and do this for you? If this task falls to your company, do you have extra personnel already on staff to do this, or are you going to need to hire someone?
Processing, Receiving And Breaking Down Orders: What does it cost to process, receive and break down one order? You must define the hidden costs in these tasks when purchasing direct. A distributor purchases from dozens of manufacturers. The distributor brings in large quantities and breaks them down into smaller quantities, bundles multiple supplies from multiple manufacturers for delivery. When purchasing direct from multiple manufacturers, you will have to bear these costs. Also, do you have the room to store products and the vehicles to deliver them? If not, does it make financial sense to acquire them?
Distribution To Multiple Locations: This task can be complex. If you have large accounts, a distributor may be able to afford to deliver to the locations and be trusted with keys. For multiple small locations, the cost may be too high for the distributor. What I have experienced over the years is a mix of large and small accounts resulting in a partnership between the BSC and the distributor. The distributor maintains a small inventory at the contractor’s place of business but handles most of the deliveries.
Training: Training is a crucial component to consider. There are many times a BSC may need help educating staff on product usage, HazCom, bloodborne pathogens and other matters. Training can be performed by the manufacturer’s or distributor’s representative. However, timing is the issue here, because new hires may require training at a time when the representative is not available. This task should be part of the initial conversation with whomever you decide to do business.
Trouble Shooting And New Opportunities: Trouble shooting is self-explanatory. When problems occur, who are you going to call? Is that person responsive, knowledgeable and reliable? Your distributor is local and can be there immediately. Your preferred manufacturer may not even be in the state. New jobs or new procedures require the same considerations. A resource needs to be available that is responsive, knowledgeable and reliable.
Focus: This may be the biggest factor to consider. Can you maintain focus on what you do best and still take on the costs and responsibilities of distribution?
After reviewing these tasks you should have a clearer idea of whether a distributor or manufacturer is your best source for products.
Skip Seal is a trainer and consultant with more than 30 years management experience in the cleaning industry. He is a LEED Accredited Professional and a Cleaning Industry Management Standard (CIMS) ISSA Certification Expert (I.C.E.). Seal and his team offer support across the country with sales and operation analysis, new market penetration, and sales training. He can be reached at email@example.com.
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