In today’s market with small margins on new equipment, how does a dealer grow his business and make it profitable? How can a distributor obtain factory support and how much support should a distributor expect? How can the distributor insure that the product line he is representing does not go direct, replace the distributor or add more distributors.
— Tom Schultz, Managing Member, Advanced Forklifts LLC (Belleville, NJ)
Ken MacDonald: Growing your business in today’s market requires a great deal of effort in retention and prospecting. During a slowdown, you can retrain and correct bad habits and also train new skills that will make your people and company more efficient and profitable. For example, October’s Aftermarket Seminar on Parts & Service was led by industry leaders who imparted great ideas and operating procedures that could allow you to achieve your goals. Attendees were among industry professionals who provided great information and knowledge. Watch MHEDA’s training calendar for other opportunities.
For factory support, the manufacturer can provide product-specific training and quality products for you to bring to market. This is the manufacturer’s primary function.
As far as manufacturers going direct to market, in most cases it has never worked well. I believe that most leading manufacturers will concentrate on product and quality distributors. If you are a good distributor in your marketplace, the manufacturer can only win by getting a higher share of the market. The distributor’s ability to pay the bill makes the manufacturer very comfortable. Adding more distributors to a market would probably dilute the financial strength of the distributor, resulting in two weak and under-performing distributors that, combined, produce poorer results.
Keep your company and people well-trained and focused on the goals at hand, and the results will keep you and your manufacturer very happy.
Larry Abernathy: When a distributor chooses product lines to take to market, he must address how those manufacturers handle the questions that you have asked. If they offer exclusive franchises, that is great and you can feel more comfortable. However, many are open lines and you have no guarantees. We have found that developing a good understanding and relationship with your local representative and the supplier’s executives is your best leverage. You will only be as strong as your performance level and what you bring to the table. A good relationship between manufacturer and distributor should help you to grow your business.
Michael Dubbs: In today’s tough economic environment, nothing is more important than a strong manufacturer-distributor relationship. I suggest you meet formally each year with your major manufacturers to establish sales and marketing objectives for the upcoming year. Throughout the year, communicate your successes and failures. Jointly try to identify actions that both of you can do to improve results. Communication in the distribution chain should help you to increase sales, improve margins and foster long-term business partnerships.