Going Through Distribution Channels vs. Buying Direct
Another key word that also begins with the letter S is "support." Ironically, when I turned to my Webster's Dictionary to look up the definition of "supply," I noticed that the very next word defined was "support." I immediately closed the dictionary, realizing that the definition of "support" had opened my eyes and changed my personal interpretation of the supplier's role in our industry.
Probably far too often, today's dealers/contractors are led astray by the direct mailings they get that hype tremendous savings on purchases of hardwood flooring and related sundry items. As we all know, the Internet has brought to our fingertips the power to purchase from suppliers located across the globe. I suppose, in one way or another, we have all become "mouseketeers." And in reality, even purchases that are consummated close to home may, in fact, originate from a far-away supplier.
Let's take this one step further. Speaking to the dealer/contractor, how would you feel if your customer secured on his own the necessary wood flooring products for his home and solicited your company merely for the installation service? Without question, you would be apprehensive and definitely cautious about your liability with regard to performance of the product before, during and after the installation.
Resentment can come into play, as well. When you decided to become a displaying dealer/contractor, considerable financial commitment was required to establish your showroom, sales force and a competent installation crew. And without a doubt, you had to sink a good deal of cash into product purchases for your inventory.
Selling installation labor only can be accomplished from the back of a truck without much overhead expense. The labor-only type of operator normally provides only a "tail light" guarantee for his workmanship. That's because his so-called guarantee typically endures only for as long as the customer has visual contact with the installer's tail lights as his vehicle drives away from the job site.
Whether or not you realize it, the dealer/contractor who wanders from the traditional pavement - where material purchases are made through local distributors - increases his potential for becoming a local tail-light operator. This is because he has failed to turn on his headlights to avoid the gravel road that ultimately becomes a dead-end street.
Historically, hardwood flooring manufacturers have always viewed local distribution channels as the easiest and fastest highway for routing their products to the dealer/contractor for consumption. But in recent years, the hunger for market share, combined with big volume increases in imported products, has brought about the saturation of our market.
The existing distributor network has been incapable of committing to additional product lines while simultaneously maintaining loyalty to the wood floor products and sundries they've handled for many years. The distributor has been forced to minimize product additions that duplicate his existing lines, or create disadvantageous price and quality comparisons with the tried-and-true products already in his inventory.
So, those manufacturers who wished to better penetrate our market, but had been shut out of existing distribution channels, began searching for an alternative outlet. Ultimately, the alternative they finally focused on was the retail dealer/contractor.
Before long, trade shows, such as the NWFA convention and Surfaces, were exploited by manufacturers who were intent on connecting with dealers/contractors. On the other hand, the vast majority of established manufacturers in our industry do not care to jeopardize their existing relationships with their distributors.
Direct selling really offers only one potential advantage - a low price - to lure the dealer/contractor into purchasing from the upstart manufacturers. What an original concept! But you may find that sweet prices without local support may leave a bad aftertaste if, and when, a problem arises with the product.
I'd say, "Congratulations," but in reality you have my condolences, because you truly are "home alone" and your supplier, more than likely, is far, far away. And believe it or not, your local distributor still wants your business. I urge you to assume a more positive position for purchasing. The following items constitute just a few of the many advantages you can enjoy by joining forces with your local distributor.
Inventory. Successful distributors realize that, to earn and retain business, they must keep on hand a wide variety of your day-to-day products in their inventories. In addition, a qualified buyer will research project availability to minimize your waiting time for special-order items that are not commonly stocked.
Dealers are then advantageously positioned to respond to their customers. In addition, they can maximize their cash flows with customer deposits on the order, and not have to tie up funds on building large inventories of direct-purchased products.
Technical training. Distributors have ready access to manufacturers for assistance with product information and organizing seminars. They also act as your liaison with the manufacturer if and when a product problem arises. In addition, the distributor's staff is local and at your immediate disposal to help assemble a customized mix of products that will fit your individual needs. Like you, they are fully aware of the market conditions in your area and the requirements for a successful installation.
Multiple locations. This is another advantage for the dealer/contractor. Products that may be temporarily unavailable locally can and will be transferred from another branch to fulfill your pending installation needs.
Showroom selection centers. This, in itself, is highly desirable to a new or start-up contractor. The overhead cost of a showroom is borne by the distributor. In addition, the distributor's displays are current and maintained by trained individuals who are dedicated to customer service. This allows the contractor to concentrate his efforts on measuring, scheduling and supervising his installations, instead of staffing his own showroom and waiting for potential customers who may never arrive.
Wood or Wood Knot believes that you should never be left home alone. That's why we always support the home team. Everyone likes to win, and winning requires the combined efforts of three players: the manufacturer, distributor and dealer/contractor. Manufacturers, working with their bench of distributors, will always go to bat for their dealers/contractors. What are you waiting for? Play ball!