Partnering on Restroom Product Diversification

Communication is Key 

Juggling multiple manufacturers requires constant communication with both the manufacturers and customers. When it comes to manufacturing partners, Franke suggests asking questions about current capacity and production forecasts.  

For example, distributors should ask questions such as:

• How does the manufacturer prioritize order fulfillment among distributors during shortages? 
• Can manufacturers provide visibility into raw material sourcing and logistics?
• What about guarantees around lead-time commitments?
• Does the manufacturer offer support in the form of training, marketing, rebates, and co-op funds? 

“It’s important to ask questions like ‘How can you help me grow?’ ‘Can you afford me an additional sales representative?’ and ‘Can you help me with the cost of dispensers for a large end user?’” says Niffenegger.  

These questions lead to a set of best practices that benefit both the distributor and manufacturers. This includes maintaining regular monthly or quarterly business reviews and transparently sharing forecasts and sales data to make sure supply aligns with demand. It is also vital to build relationships at multiple levels of a manufacturer’s company. That means reaching out beyond the sales rep and touching the operations, finance and leadership teams.  

Distributors should always be thinking about how to protect their clients during uncertain times. To keep the product flowing, Franke recommends asking for or requiring things like guaranteed allocation agreements or contingency supply commitments, flexible payment terms or credit extensions to support cash flow. 

It is also wise to ask for advanced notice of disruptions in production, pricing, or logistics. Investigate shared risk programs like vendor-managed inventory (VMI) or consignment stock. 

When it comes to communication with customers, distributors should be proactive and inform end users about supply risks or substitutions early. Sales teams should also position substitute products as solutions rather than compromises by coming in with training and spec sheets.  

Franke advises distributors to emphasize that diverse partnerships are designed to protect supply chains and ensure continuity. However, don’t be surprised if these talking points fall on deaf ears.  

“Today’s millennial-aged buyers are tough,” says Niffenegger. “Often, they don’t want this information. They want the product delivered at the quoted price, not sales pitches. You don’t get many second chances with this group.” 

Buying Group Strength 

Buying groups or group purchasing organizations pool the purchasing power of multiple distributors. This strength-in-numbers approach can secure deeper discounts, better terms, and more aggressive pricing than most single distributors could achieve on their own. Membership also gives access to all-important quarterly rebates, along with online training and extra cost-saving promotions. 

Group purchasing organizations also offer diversity in vendors and product categories.  

“Our members have access to not only janitorial and cleaning programs, but also to the group's manufacturer relationships within the safety equipment and clothing industry, as well as manufacturers of tools and building contractor supplies,” says Zach Haines, CEO, DPA Buying Group, Cincinnatti. 

Members also have access to market intelligence and vender insights that allow them to gain early awareness of trends or potential challenges.  

Perhaps the biggest advantages of joining a group purchasing organization are connection, community, and credibility.  

“If you are not part of an organization, you will not have easy access to national accounts,” says Ty Huffer, Chairman and President, The United Group, West Monroe, Louisiana. “But being part of a group purchasing organization also brings you in contact with like-minded businesspeople. When members come together for conferences and meetings they can speak freely about concerns like tariffs or hiring issues or any other aspect of running a business because the other members are not your competitors.” 

The downside of joining a group purchasing organization appears minimal. If qualified, there is no cost for membership to DPA and no penalty to leave the group. For member-owned, The United Group, each member has one voting share of stock and there is no “hook.”  

“It’s like a marriage, you get out of it what you put in,” says Huffer.  

However, there are still small things to distributors should contemplate. People considering joining a group purchasing organization should investigate issues like reduced flexibility, potential conflicts of interest, margin pressure caused by standardized group pricing, and less control over supplier selection.  

Yet, Huffer remains confident in the business proposition of group purchasing organizations.  

“People buy from people they trust,” he says. “Our members have successful relationships with suppliers and customers.” 

Amy Milshtein is a freelancer based in Portland, Oregon. She is a frequent contributor to Sanitary Maintenance.