Feedback On Distribution
You think you’re pretty important to the jan/san supply chain, right? How about your suppliers and customers? What do they really think? Sanitary Maintenance sent two surveys — one to end users and the other to manufacturers — that asked them about the role they believe distribution plays, and whether you’re doing as good a job as you think.
END USER SURVEY
We polled 256 jan/san end users — in-house cleaning managers and building service contractors (BSCs) — and found that they generally feel distributors are vital to their overall success. Of the respondents, 73 percent believe distributors are crucial, 21 percent think they are sometimes important and 6 percent believe distributors are not important at all.
Jeremy Lowdermilk, owner of All-Right Cleaning LLC, Fort Collins, Colo., is one end user who says distributors are extremely important — when they find the right one. “If you find the right distributor who can help your company in times of need whether with finding appropriate products for a specific job, training on products or techniques, or troubleshooting problems, it can really further the growth of your company,” says Lowdermilk.
On-time delivery is noted as the most vital function by Judith L. DeBevoise, director of operations, Licking/Knox Goodwill Industries Inc., Newark, Ohio. She also says add-on services such as training and providing additional assistance during special occasions keeps her coming back to select distributors.
“I can get great product from almost anyone,” says DeBevoise. “I choose to buy service. My customers want answers yesterday and I must use a distributor who is at my fingertips and can be our right arm when needed. We are partners in business, not business associates.”
Distributors who go the extra mile for their customers are definitely noticed — but so, too, are those who do not. Echoing the sentiments of many end users, Marshall Boyar of American Maid Inc., Baltimore, says, “The distributor is only as good as the products he sells and the promptness of deliveries.”
Distributors’ Value Adds
Distributors tout the value-added benefit of training that most provide. According to our poll, end users are in general consensus with distributors — education is vital and respondents felt that distributors are best suited to provide it.
Out of those surveyed, 27 percent said timely deliveries from a local source is the most important service distributors provide. “I love the convenience of purchasing from a local source,” says John Jobrey of the U.S. Postal Service, Shreveport, La. “I also believe in keeping the revenue in the local community whenever possible.”
Other oft-mentioned functions include: customer service and support, 16 percent; product availability, 14 percent; product information, 11 percent; and quality products at the best cost, 11 percent. Several other responses accounted for the remaining 21 percent. “I count on my distributor for updates on products and advice on problem solving,” notes Larry Paruszkiewicz, director of building and technology services, Gateway Technical College, Elkhorn, Wis. “They are not tied to one line of product so they can offer varied solutions.”
Other distributor functions that end users mentioned as being “satisfactory” or “excellent” include: suggestions on products or processes; customer service and support; better costs for quality products; warehousing; a good conduit for trends; and saving the user time.
End users generally believe that the services sold to them as value-added benefits truly are added benefits and not just a way for distributors to make more money. In fact, 67 percent say the services that are sold as value adds are being sold appropriately. Of the few who mentioned services they believe are just an inherent part of a sale and not a value add, the following were mentioned: gas/tax/delivery, availability, follow-up/service, training and e-commerce.
Above The Competition
Given their myriad of ordering options, we asked whether end users will continue to use distributors. The majority — 64 percent — say they will. Another 32 percent say they will use distributors and consider going direct, while 4 percent say they prefer going direct to manufacturers.
A couple of end users say they were buying direct from manufacturers and found themselves wanting the services only a distributor can provide. Gus Craig, branch manager, BG Services Solutions, Columbia Mo., says his company used to buy direct until 2002. “The time needed to work with several companies direct hurt my ability to be effective in my regular duties,” he explains. “With my distributor, they work to consolidate products, estimate needs and offer varied solutions buying direct does not allow for.”
Marc Lisenby, president of Master Building Services Inc., Tucker, Ga., says his company has purchased direct from a national manufacturer and acknowledges substantial cost savings. “However, we enjoy the cushion that we find by using our distributor to help us when problems arise and questions come up,” Lisenby explains. “We prefer spending time with our customers and employees rather than ordering and keeping up with the orders directly.”
Some end users who say they will consider going direct will do so because they want to find cost savings. “It really depends on cost. If an item is much cheaper from the manufacturer, I’ll purchase through them. If it means just saving a few dollars, I’ll stick with the local company,” says Markus Konig, president, Creative Labor Systems Inc., Keene, N.H.
Others say service has to be impeccable. “I will go to the manufacturer if I’m not being serviced,” says Tom Van Syoc of Pella Community Schools, Pella, Iowa. “Some of our distributors show up 1-3 times a year, however it is the distributor’s job to see us on a somewhat regular time schedule,” he says. “There is a fine line between too much and too little.”
Avenue For Communication
Distributors are a link between the manufacturer and the end user. Therefore, communication is one of the most important roles of a distributor. Fifty-four percent of those surveyed say distributors are excellent or good at communicating problems or issues; 31 percent say average or fair; 5 percent say it varies between distributors; and 10 percent say it is not good or poor.
Of those who answered excellent, a good partnership is the basis of that communication. “My distributor has been serving me for 14 years and knows my needs and equipment,” says Ron Quigley of First Evangelical Free Church, Manchester, Mo. “I know that he is honest and will only communicate what really needs to be taken care of.”
For other end users, the quality of communication varies. “My distributor is extremely good, but I have had others in the past that hired salesmen [that were] not knowledgeable enough to handle anything other than price,” says Lowdermilk.
Some say distributors need to be more proactive instead of reactive. “A lot of times it is after the fact, as damage control,” says Paul J. LaBossiere, president P.M.L. Maintenance Ltd., Winnipeg, Canada.
Room For Improvement
When asked what distributors could do better, a good number of end users (18 percent) answered that they were completely satisfied. However, most (25 percent) said they wish the end users knew more about them or communicated better.
Knowing customers’ schedules can save a lot of time and frustration. “One big problem we have is sometimes an account manager will show up without notice and get upset because I don’t have time to visit with them,” says Van Syoc. “Not only are they wasting my time, but they are wasting their time.”
The remaining 57 percent mentioned a variety of other business functions that distributors could improve upon, including accuracy of orders, more product variety, customer service and faster service.
Jerry Johnson of U.S.D.-441 Sabetha/Wetmore, Sabetha, Kan., says he prefers to use distributors who stay away from a “product of the week” mind-set. “...With some distributors, once you buy something from them, they are regularly calling to sell some other product that is on special for a few days,” he says. “The distributors that I use regularly are the ones that have a service and pride in their product to go along with their sales.”
Keeping end users apprised on the latest products, follow-up visits and service are also essential in many end users' minds. “Service is the most important factor and this requires real people not just a recorded message,” says John Murphy, Glenmeadow Retirement Community, Longmeadow, Mass.
Of the 40 manufacturers who took our survey, all use distributors in some capacity; 50 percent sell only through distributors. The good news is the vast majority of manufacturers plan to continue utilizing distributors.
Ninety-five percent said that the distributor is critical or important to the success of a supply chain, and all but one said they will continue to use distributors in the future. “Without the distributor, we would not be in the jan/san business,” says one Pennsylvania manufacturer.
A manufacturer from Arkansas agrees. “Distributors play a very important role in our overall sales and marketing efforts,” he says. “Distributors can provide local service and support to facility service providers that we can not provide.”
However, not all manufacturers are satisfied with the results provided by distributors. “We are a very new and inexperienced company, and initially we assumed that distributors would be the driving force behind our product and planned on using them almost exclusively, but distributors are a very small part of our business’s success,” says one newly established jan/san manufacturer.
State Of Industry’s Partnerships
The aforementioned Arkansas-based manufacturer says he has seen the role of distributor change over the years. At one point, the manufacturer says, distributors were more loyal to a few brands, which resulted in a more specialized distributor.
“To make profit, the dealers are stocking less, and expecting manufacturers to stock more and more,” the Arkansas manufacturer notes. “This, of course, is in complete opposition to a standard manufacturing philosophy.”
Attention and service to smaller customers should be a main focus for distributors, many manufacturers say. “They reach customers that are small, but on the whole add up to a significant volume of business,” notes one broom and mop manufacturer. “We could not effectively serve these customers ourselves.”
Because distributors serve as a link between the supplier and the end user, communication is of utmost importance. Eighty-four percent of manufacturers believe they have a good partnership with their distributors.
“Our relationship with our distributors is more of a partnership. They have as high an expectation of us and our product as we do of them and their organization,” says one vacuum cleaner manufacturer.
Of the remaining 16 percent who say the relationship is poor or could use improvement, most say it is either because of price objections or the distributor is not readily available.
“Most distributors have been difficult to deal with on average,” says the newly established manufacturer who was quoted earlier. “Many of them want to argue over price and exclusivity rights.”
A Florida-based manufacturer acknowledges the differences between distributors. “Some are very hands-on while others are electronic only through an office manager,” he notes.
Sales Staff Essential
The single most important thing a distributor can do, according to manufacturers, is hire better sales people, train them and retain them.
“Many distributors get stuck in a rut and become order takers,” says one manufacturer based in Texas. “With small business owners wearing several hats, they seem not to have the time or resources to focus on changes and getting out and selling.”
As part of this training, the earlier-mentioned Arkansas manufacturer says he would like to see a switch away from price and toward quality. “[They need to] do a better job of getting the end users out of the ‘first cost’ mind-set,” he says. “First cost is a tool, but total overall operating costs are the true cost of a product.”
He also says distributors have to employ good salespeople that maintain open discourse with the manufacturer.
Another manufacturer from Canada also agrees that the sales force is crucial. Local warehousing, the ability to fill smaller orders, and technical product support and training are other core functions, in his opinion.
Continuing With Distribution
More than 95 percent of respondents say they will continue using distributors in the future.
“We will continue to use distributors because of established relationships,” says one Missouri-based manufacturer. “However, we will explore the possibility of selling direct as an additional business channel.”
The Arkansas-based manufacturer says his company will continue to work with distributors, but is concerned about distributors’ loss of brand loyalty, and what it could do to the distribution arm.
“With the Internet becoming a more and more powerful tool for searching products, the day may come where dealers have reduced capabilities, at least from a purchasing standpoint,” he says.
The newly established manufacturer who was previously quoted in this article says he will only work with certain distributors who meet certain criteria. This company has switched its efforts and gone direct after comparing numbers while using distributors and after switching to direct sales.
“Our company has spent approximately $15,000 advertising/marketing to distributors over the last year and has received only about $4,000 in sales,” he explains. “However, when advertising direct to the consumer, our product has been well received, and end users have required far less labor and attention before placing orders. We have spent less than $10,000 on the past year advertising direct to the consumer and have had $36,000 in sales from this group.”
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