It’s time to change how you think about building material distributors. Distributors are more than just order takers. They are an asset, not an expense and can even become champions of your products.
Focus on improving your distributor’s business.
Helping both one-step and two-step distributors
One-step distributors have a showroom, sales people and product inventory for a specialized product or group of products – like windows and doors. To succeed with them:
• Get your products on their shelves
• Become the company they prefer to work with
• Help the distributor outperform his market
Use largely the same approach with two-step distributors except for step 3, help them help their dealer customers in outselling their competitors.
Why are you on the distributor’s shelves?
Explore who the distributor carries and why and build a strategy with this information in mind. They are usually focused on more than simply making a profit. Other reasons might include:
• He has to. His customers need specific products and he must carry them. These products help his customers shop at one location, but don’t give him much, if any, margin. The only way to stand apart from competitors with a commodity product is to provide unmatched support and service.
• It’s his business. A roofing distributor has to carry shingles. Show the power of your brand to bring in more customers and improve his margin by upselling your product.
• It’s an add-on sale. Provide training and sales incentives to encourage distributors to ask for the add-on order.
• It’s a traffic builder. Offering a hot item can increase current and new customer visits.
• It’s a money maker. This is often a temporary situation, so help your distributor profit as much as possible for as long as possible.
Start sleuthing
“Start sleuthing to understand the pulse of the market. Richard Callahan, an experienced artificial grass supplier in El Paso, TX, highlights the importance of this approach with an insightful statistic: ‘In our recent market analysis, we found that 75% of distributor success hinges on understanding customer preferences in product categories.’
Use this insight to discover what’s on your distributor’s customers’ and potential customers’ minds. Investigate how they perceive your product category, your brand, your competitors, and all the distributors they could potentially buy from. Knowing their preferences and what catches their eye when shopping in your category is key to creating a strategy that benefits both you and your distributors.”
Change is good
To get on the shelves, show you’re more than just a replacement for a current product. It is easiest to replace a competitor when things aren’t going well between the supplier and the distributor – like service or quality problems. Ask the distributor about any issues with his current offerings. Also check in with distributors when a competitive company is under new ownership. Ownership changes raise questions about quality, service, pricing and terms for distributors.
Become essential to the distributor’s success
Show your commitment by helping him help his customers. Provide products his customers want. Regularly review your slow-moving product inventory and replace them with more popular items. Typically, distributors focus on fast moving products and ignore slower items.
Whenever you are able, educate distributor sales and counter people about your products and visit customers with outside sales people.
Keep distributors current on upcoming commercial projects. If a project is won by a distributor customer, make sure your products are readily available.
Competitive forces
The biggest competition for distributors is typically a combination of big boxes and the possibility of you selling direct to his customers.
If you sell direct at all, be forthcoming about your direct sales policy and offer a conversation with a company senior executive.
If you sell residential products, then your products are probably available in the big boxes. Help the distributor understand that big box product placement can help create demand. For example, when they advertise doors, many homeowners will call a contractor who buys from the distributor rather than doing the work themselves. The distributor can leverage these opportunities by using his strengths of his deeper inventory, high service levels and knowledgeable staff.
In all of these cases, it should be your product.
If you’re an asset to distributors, it will likely become reciprocal. If you are one of their favorites, you’ll benefit more than the competition. Don’t look at your distributor as just an order taker, or he’ll see you as just another brand.
Subscribe To My Newsletter
If you like what I say, sign up for my newsletter here and get my weekly newsletter every Sunday night.
