Well Stocked

Janitorial distributors still face challenges. Sure, it’s not early-months-of-COVID types of challenges, but there is always some friction to contend with. From global shipping delays to surging fuel and transportation costs to swings in raw-market material, the sector can be unpredictable. But no matter the hurdle, end users don’t want to hear about it, particularly today’s millennial-aged clients, who might not have the same feelings about business partnerships and loyalty as the generations that came before. Still, no matter who is on the client side of the desk, all customers have one thing in common: they want supplies, particularly restroom consumables, ready and available.  

That’s why it’s important that distributors diversify manufacturer partnerships. Working with multiple product manufacturers will help distributors maintain inventory for their customers. But beware, diversifying comes with its own set of risks. Here’s how to find balance.  

Benefits of Diversifying 

There are a handful of large restroom consumable companies, plus some smaller regional manufacturers that offer low cost, generic options. Working with this mix of groups can be beneficial, specifically in terms of supply chain resilience.  

“Working with multiple vendors lowers dependency on a single manufacturer, reducing the risk of stockouts during disruptions,” says Dale Franke, Vice President of Sales and Marketing, Acme Paper & Supply, Savage, Maryland. 

Competitive pricing is another benefit of diversifying. By working with multiple vendor sources, a distributor has greater negotiation power, which can lead to better pricing and terms.  

Paul Niffenegger, a consultant to the jan/san industry, has a method when talking to customers about different manufacturer choices and price points.  

“I always lead with the national brand. They give the customers quality,” he says. “If that customer is more focused on price point than quality, you can then pivot to less costly, generic products.”  

Working with multiple manufacturers brings other benefits, such as expanding product breadth and flexibility, access to innovation, and enhanced service levels.  

“This diversification allows distributors to serve a broader range of customer needs and offers exposure to new product lines, technologies, and industry trends,” says Franke.  “Multiple suppliers also help maintain consistent lead times, inventory availability, and order fulfillment.” 

National brands will also serve as true partners with distributors, assisting on sales calls and acting as a second point of contact.  

Diversification Challenges 

As one may suspect, working with multiple brands comes with some risk. Even though Niffenegger describes them as “slight” overall, he says the biggest challenge is not giving big manufacturers enough growth. 

“If you’re not growing, they tend to show a little less interest in you,” he says. “The flip side of that is if you are consistently gaining market share, they will go to battle with you and help you in any way they can.” 

Variability in quality poses another possible risk of working with multiple manufacturers. 

“Standards and consistency may vary across manufacturers, potentially causing brand or service issues,” says Franke.  

Another possible headwind of going with a low-cost alternative is dealing with manufacturing problems. Private labels and regional brands buy huge rolls of products from big national operations and process them on their own machine. If, for whatever reason, that machine malfunctions, a distributor could end up shortened.  

“If they’re down, you’re down,” explains Niffenegger. “Large companies can switch manufacturing overnight and keep production going. Plus, they have warehouses all over the country, so there’s always stock to pull. Smaller producers don’t have that luxury.” 

Other risks, like relationship complexity and operational burden, represent the natural outcomes of working with and managing multiple partners. More vendors lead to more contracts, more points of contact, and more communication channels to manage. This can affect the soft costs of doing business. 

Perhaps the biggest risk of spreading purchasing dollars around is missing out on discounts and rebates.  

“It’s a dirty little secret, but rebates are important to distribution,” admits Niffenegger. 

Another supersized risk? Losing out during an unexpected event like COVID or H1N1 outbreaks.  

“Orders are rationalized based on past purchases. You can’t order a truckload of product if you’ve never ordered a truckload before,” says Niffenegger. “I can’t tell you how many customers were turned down during the pandemic.” 

This makes selling on price alone a bit dicey. Yes, a distributor could get a lower cost on a product, but it becomes a problem if something goes wrong and that supplier can’t deliver.