How would you describe the relationships between manufacturers and dealers, recently?
The Talk...Page 2
Results from Last Week's Poll
Getting closer in select cases
Getting much closer, across the board
Not changing all that much
Last week, I noted that Four Seasons Sunrooms was reporting success in attracting new dealers because of its broad product line. The sunroom manufacturer is finding that dealers like the fact that they can rely on one source for products that can meet many different homeowner needs, whether it’s a high-end conservatory or a more modestly priced patio enclosure. Vinylmax, an Ohio-based vinyl window manufacturer, offered a similar explanation for its recent growth. They’re adding dealers that like the fact that they can get a broad mix of replacement products from one source in one truckload.
One can point to other examples of dealers becoming more closely tied to manufacturers. Although I don’t have numbers, it seems to me there’s been a steady growth in the number of dealers—both specialty dealers and lumberyards—opening showrooms with a big manufacturer’s brand name featured prominently on them. But not all dealers, at least, are on board with the idea. In last week’s Talk, I referenced a complaint from a dealer who had told me not too long ago about the pressure he was feeling to commit fully to one manufacturer’s line.
In response to last week’s Talk, I heard from another distributor/dealer in Florida, offering the same sentiment:
We carry two major wood/aluminum extruded manufacturers and four major aluminum manufacturers, as well as some other lesser used product lines.
We have assembled this mix of products in order to provide what we believe is an optimum selection of product that fills most any need our clients may have with the best possible fit. We do this to keep our clients efficient and effective in the execution of their fenestration needs.
There is unbelievable pressure from the manufacturers, especially the wood lines, to exclude other product lines. This goes to the point of knowing that our purchasing power is diminished due to this type of wrangling. These manufacturers have made it a point to create and publish policy that clearly states your pricing will suffer if you do not use their product for 95% of your sales in their type of product line.
We have not, as yet, bowed to this, but the temptation is great. I know that it would do a disservice to our client base, by limiting their available options and by forcing our sales reps to only focus on one line.
No doubt this distributor expresses the sentiments of at least some of the 30 percent of respondents to last week’s poll who suggested that relationships between manufacturers and dealers are “actually worsening.” Many independent dealers and distributors want to remain just that—independent. They want to run their businesses their way and that means they want to put together their own product line-up and/or put their own brand names and/or company reputations out in their markets first and foremost.
Of course, manufacturers bring a different perspective to the issue. Here’s what one wrote:
The past few years, window manufacturers have had an abundance of orders and have filled each and every truck leaving the dock. We now face the simple fact we have to schedule a truck based on how many orders are available to load the truck. We have allowed the dealers to pick and choose the product they wish to buy from us and have looked the other way when they bring in a competitor’s product because a certain builder desires this product. We have even cut our price to enable the dealer to maintain his or her margin they claim to make with the competitor’s product. Now that we face tough times the manufacturers are looking at their dealer base to see who will partner with them and purchase the entire line offered. If the dealer still has to have the competitor’s window to satisfy a certain builder then we are suggesting to the dealer maybe he or she should look at the competitor’s entire line. Only the dealers and manufacturers that support each others’ program will survive these tough times.
Nearly half our respondents do see dealers and manufacturers working more closely together these days. That group is divided fairly evenly between those who see it happening across the board and those who see it happening only in select cases. Most of these respondents probably don’t see a problem here—perhaps they are manufacturers that want to strengthen their relationships with dealers. Or perhaps they are dealers like those who have signed up with Four Seasons and Vinylmax.
One sunroom dealer—a Thermal Industries customer—wrote in to say he gets approached by other companies all the time that then back away because his business isn’t big enough. “In my opinion loyalty to one company is a big asset,” he says. “The people I deal with are fantastic as well as their service.”
I’m not sure if we have any sort of trend here or not, based on our poll results. I do think, however, that “relationships” will continue to play a huge role in the success of almost any company in our business.
Keep the conversation going. If you'd like to add your comments here, email John Swanson at email@example.com.