November 2004
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Dealing with distributors

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Learn how being a better customer can improve the services you receive

by Mike Marks and Tim Horan
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It's Monday morning, and you have been working on bids all weekend. It's now time to price a job. Your first instinct is to call Fred and ask him about the order; he has been with Acme Roof Mart for years. He knows your business; provides great service; gets product to jobs on time; and supplies products when you need them, where you need them and how you need them. But the market is ultracompetitive. New distributors have come to town. There are more options than ever. Buying roofing materials is becoming increasingly similar to buying groceries—the price does not change monthly or even weekly. It changes daily.

The new distributors are promising you great pricing and service and begging for a try. Manufacturers are offering bigger discounts on drop shipments, and though you know this cuts the distributor margin in the short-term, it increases your margin.

In the current business environment, you need every edge you can get as your margins come under greater pressure. Your customers are having a "Pillsbury bake-off" on pricing, and you are bidding against some flaky competitors. You fired a project manager for incompetence, and now he owns a roofing business and bids against you on almost every job. You aren't even sure he has proper insurance.

What do you do? Go with the best price, or stay loyal to Fred? You wonder whether the industry has any...



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