In the world of sales, there are often no right answers. What would you do in this tough sales situation? Make the call below, and see instantly how your judgment compares. Final results will appear in LBM Journal. Be sure to check back next month for a fresh Tough Call.

Tough Call - Burned by Exclusivity

As a former carpenter, you view new products from a slightly different perspective than other dealers do. When you happened across Total Trim, a clever new line of trim boards that you saw at a buying show, you immediately understood its potential. Your enthusiasm for Total Trim helped you secure an exclusive distribution deal in your market. The next challenge: finding a builder who realized that you were selling him a competitive advantage for his homes.

You hit the jackpot with the first builder you approached. Monty Burns, owner of Burns Homes, is an astute businessman and merciless competitor. Despite his advanced age (no one knows for sure; your guess is 90), Burns knows a good thing when he sees it. He agreed to be your first customer for the product—provided you gave him an exclusive. Since Burns Homes is the biggest builder in the area, and the glimmer in Burns’ eye told you that Total Trim would be very visible in his new homes, you agreed.

It’s now a year later, and you continue to be impressed with the creativity and craftsmanship of the carpenters at Burns Homes. You knew that Total Trim was a great product, but even you had no idea of its potential to kick up a home’s curb appeal at a very low cost.

In a tight market, with several quality builders marketing comparably priced homes—the Burns Homes have a unique, upscale look that is defying the down market. In fact, Burns has begun buying most of his material from you—and has assured you that you’ll be his supplier of choice as long as he is the only one in town with Total Trim.

In the meantime, other builders have realized that the beauty of Total Trim could make an enormous difference in the salability of their homes. Since you’re the only dealer who carries it, they’re coming to you ready to buy. Unfortunately, your exclusive deal with Monty gives you no choice but to turn them away.

Worse yet, although you may not be able to sell Total Trim to prospective customers, you can’t prevent them from buying it. The folks at Total Trim are honoring your agreement as the exclusive stocking dealer in your area. But they’ve told also you that if you refuse to sell to someone in your market, they will supply those customers directly.

The problem: Total Trim has been the key to your great relationship with Burns Homes. No matter what you do, that key is about to disappear.

Once Burns’ competitors begin using Total Trim, he may hold you responsible and pull his business. Since you’ve refused to sell Total Trim to his competitors, you’ve already lost much of their business.

What would you do?

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