Independent lumber dealers need loyalty from distributors
The most common question distributor reps ask is how they can help me sell more of the products they carry. Here’s the deal: There are a lot of deck products out there. What distributors don’t understand is that customers don’t call me asking for a specific obscure decking brand. Instead, they call and say something more like, “I have heard of this national brand and it’s supposed to be good, but what do you know about it?”
Since consumers rarely ask for specific brands that aren’t in the top five in the category, it is up to us to educate them about the brands that they want. At The Deck Store, we’re really good at that. We’ve taken several obscure brands of decking and made some huge sales with those. For example, we became the largest dealer in Minnesota, possibly in the Midwest or the nation for what we’ll call Brand X. Yet many customers in our market had not heard of them until they heard it from us. We have the ability to get customers to buy what we recommend. Consumers come in to our store or ask questions on our website because they know that we’re professional deck retailers. We’re experts in this field. We’ve sold truckloads of Brand X. In fact, we’ve put a lot of time and expense into making displays and we’ve invested a bunch of energy and time into marketing the product.
But here’s what happens that makes independent dealers like myself sour on a product: As soon as we take the time and expense to market the product, then other vendors around us start getting inquiries about these products that we’ve convinced people they need to have. We’ve created the displays, we’ve done the market research, we’ve gone to home shows and we’ve spent a lot of time and energy on the product. Now, lumberyards A, B & C down the street are calling up the suppliers and asking if they can carry the product. They have no skin in the game.
Some distributors are really good about geographic exclusivity or at least making sure that there’s a fair price difference between retailers, but many aren’t. They simply think that another dealer is another sale. What they don’t realize is that it isn’t another sale. It actually takes revenue away from the work that we did and gives it to someone else, so that they can discount it to the consumer. After that happens, it makes you not want to sell that product anymore. In the case of Brand X, two big box stores in our market began to sell the product, even though they didn’t display the product.
Once we took our display down, stopped carrying that product, and took it out of our inventory, it’s amazing what happened; nobody bought anymore. Distributors need to remember that when they don’t have loyalty and exclusivity with their independent dealers, they will eventually alienate the dealers who are doing the marketing.
So, what can a manufacturer or distributor do to sell to a business like ours? Be loyal. We can market the product together. As soon as the sales start coming in, don’t throw us under the bus. Don’t give it to others with no skin in the game, who don’t even have displays.
Remember, we’re not selling decking because we like the product necessarily, though it’s a great attribute if we like what we sell. In reality, we’re selling it to make money. If we can’t buy it at a fair price and sell it at a fair price, we don’t want to be involved with it. If I’m going to buy product, display it, promote it, and then the manufacturer or distributor gives it to someone else to sell, I’d rather just not carry it in the first place.
In the case of Brand X again, I agreed to buy several truckloads and I was given a specific price. Two months after I purchased it, I learned at a trade show that the manufacturer offered other dealers a stocking dealer position if they purchased one unit, whereas I had to purchase whole truckloads. Yet they received the same pricing I did. In addition, they were given a $500 credit on their accounts for taking that product. Needless to say, our store’s relationship with Brand X was damaged.
My advice to distributors is that to get in our market, pick the right partners. Work with companies like mine to give us some protection. We’re specialty lumberyards. We’re not big boxes that sell everything. You need to work with us and give us the room to make the sales. And after we make them, you need to guarantee to us that we’re not going to lose the sales.
We’ve been through the situation enough times that now when someone comes along with a new decking, I’m of course interested in the quality of the product, but I also ask a lot of questions about the wholesaler’s and manufacturer’s distribution plan before I consider stocking and promoting the product.