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Business Builder: Distributor Dealings

Posted: March 30, 2012, 3:15 p.m. EST


Keeping lines of communication open and cultivating relationships can bring a wide variety of benefits.
By Alison Bour

The pet industry depends on a triad of players to continue functioning. Manufacturers make the products and retailers sell them to the public, but the vital third part of the equation is sometimes forgotten. Without distributors, the other players would often find themselves stuck, unable to complete their own business objectives.

Everyone in the pet industry can benefit from a deeper understanding of distributor relations. Nurturing these business contacts can mean the difference between having the right products at the right time, and being left out in the cold when new products are introduced or when it comes time to restock.
 
Making nice with this group can be as simple as treating them with courtesy and generosity. Creating and maintaining good relations with distributors represents a key success strategy for retailers, said Bob Negen, owner of WhizBang! Training in Grand Haven, Mich.

pet product distributor
Attending trade shows can give retailers access to a variety of distributor contacts. Sherri L. Collins/BowTie Inc.

As a former retailer who sold kites and related items, Negen didn’t shy away from sending distributors hand-written notes, getting to know their interests and buying small gifts—even flowers—for them, he said. It paid off big when a major shortage of a hot yo-yo item threatened his retail stock.

“Everybody was screaming, ‘We need you—Don’t you know who I am?’” Negen said about stores caught up in the shortage.

But when it came to distributing what little stock was available, “Guess who was at the top of that list?” he said.

Distributors are external customers, and they’re part of a large network of people that support a pet retailer and ultimately enhance the experience of the customer, Negan added.

Tired Adages that Work
When discussing the importance of retailer/distributor relationships, Negen suggested following the golden rule: retailers should treat distributors with the same respect they desire.

Going the extra mile can help, too. Donna Garrou, owner of birdStuff, a retailer in Orange, Calif., said she even looks for ways she can save her distributor money.

“I recently told a distributor I was concerned his minimum fee for shipping was quite low compared to other distributors,” Garrou said. “It seems a little crazy, but I want my distributors to thrive, too. If they thrive, so do [retailers].”

This advice plays into creating a win-win relationship. Pet product distributors are in business just as much as retailers are, and if both don’t thrive, neither will be able to survive in the long term.

“It’s sounds cliché, but it’s true,” said Steve King, president of the Pet Industry Distributors Association (PIDA) in Bel Air, Md. “It should not be an adversarial relationship at all.”

Above all, keeping open lines of communication improves business and strengthens relationships.

“Communication is key,” said Bo Nelson, owner of Wholesalepet.com in Richmond, Va. “Let your distributors know what is going on with your business. If you have a problem with a distributor, let them know so you can discuss it. Retailers can benefit from being more open, upfront and straightforward with their suppliers. Smart people appreciate honesty.”

Nip it in the Bud
The best way to prevent problems with a pet product distributor is by not letting concerns fester, said Kenneth Oh, vice president of sales for JW Pet Company, Inc. in Teterboro, N.J. The issues that arise most often between retailers and distributors revolve around billing, shortages and returns, he said.

Industry Voices
What can retailers do better to create and maintain good relationships with distributors?

“Develop regular communications with them, but not just when you need them. Talk to your rep every week.”
—Jon Supanich, director of sales for Pioneer Pet Products in Cedarburgh, Wis.

“A good relationship with your distributor is like a marriage and has similar components. The first is mutual respect and the second is good communication. Respect means if a manufacturer or other party comes to me with an amazing deal, I’ll offer to let my distributor meet it before taking the business away from them.”
—Donna Garrou, owner of birdStuff in Orange, Calif.

“Help keep production costs as low as possible. That might mean being flexible about the day of the week and time of day for [receiving]. Most distributors have invested in sophisticated software to create efficiency. Many retailers are not taking advantage of this.”
—Steve King, president Pet Industry Distributors Association in Bel Air, Md.

“Don’t start by pounding the pulpit. Start with the assumption that you are partners working together.”
—Bob Negen, owner of WhizBang! Training in Grand Haven, Mich.

When mistakes happen with shipments, it might be easy in some cases to put them aside and deal with it later, or think, “They didn’t get it right. I’m not paying.” But that attitude only makes it worse, Oh said.

“If you don’t deal with it, they are going to charge you,” he said. “If you let it go, due to time constraints, you might get charged interest and fees,” Oh said, adding that the risk is ill will on both sides.

One of the best ways to nip problems in the bud is to make time for face-to-face meetings with distributors.

“[Retailers should] establish individual relationships with them, and make time available for meetings,” Oh said, adding that retailers should take time to gather all paperwork and details together that need to be addressed prior to these meeting.

“In terms of communication, it’s quite valuable to meet your distributors face to face at least once,” Garrou said. “This allows you to share business philosophies and goals. Industry trade shows offer a good forum for these meetings.”

Gathering Support
Once good relations are established with a distributor, a retailer gains a variety of support and advice thrown in for free, Garrou said.

“Distributors fill a very valuable role,” she stated. “They allow you to try one or two of a product line without committing to a large minimum order. They allow you to spend 20 or 30 minutes doing one order that includes product from different manufacturers, rather than doing them all individually.”

Knowing what to look for in a quality business contact is necessary for success. Good distributors should do more than sit down and talk, Oh said. They should ask to walk around a client’s store. In doing so, distributors may be able to offer key advice on how to increase sales.

“They see stores every single day,” Oh stated. “As a retailer, you want to keep your eyes and ears open to suggestions.”

Beyond advice and support, distributor relationships can provide the necessary juice to start new ventures or expand. When Negen was a retail owner, he opened a host of product kiosks in mall locations. He was concerned about obtaining the amount of stock required to fill demand, however. Because a good relationship was already established with his rep as well as the company president, he got the commitment he needed—and the stock, too.

Such relationships take commitment and sometimes cash investment, Negan added. Prior to launching his kiosk business, his buyer flew to Massachusetts and went to dinner with the supplier on his company’s dime.

Pinpointing Profits
The number of available pet SKUs boggles the mind, and retailers simply don’t have time to investigate them all, said Jon Supanich, director of sales for Pioneer Pet Products in Cedarburgh, Wis. A good distributor offers retailers a way to narrow and choose the best selection for their stores.

When stock runs low on a product or minimums are too high for a store’s budget, distributors offer access to alternatives, PIDA’s King said. They can also keep retailers abreast of upcoming promotions and go to bat for them with manufacturers.

“I want to be able to get a wide variety of products from one place,” birdStuff’s Garrou said. “If the distributor has unique and high-quality products that can’t be purchased elsewhere, that’s also a plus.”

Sometimes distributors add products or lines to support a good customer who wants them, Pioneer Pet Products’ Supanich said, which is another reason retailers should establish personal rapport with them.

“It makes life easier on both sides,” he added.

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