It pays to build a solid relationship with your parts distributor
By Paul MacDonald, ServiceSource
Relationship opportunities come to us through parents, children, friends, business associates and even the casual stranger we meet and connect with. Every interaction offers us a chance to form a relationship.
In fact, we spend 30% of our working day building relationships from our business experiences. Typically, we focus on our employees and customers, spending significant time nurturing these key relationships. But what about our parts distributors?
Every service company is dependent on parts distributors. You need them as much as they need you, and when you find a good one, treat them right to keep them working for you. Work as hard on building good distributor relationships as you do building relationships with your employees and customers. Parts distributors are essential to your business’s good health and growth.
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What impact can a good parts distributors have on your company? Consider these advantages:
Service Level. Distributors’ level of service can positively or negatively affect your service quality. Having the right part at the right time can make the difference between selling or losing a repair and the customer electing to buy new.
Timeliness. Timely deliveries are crucial to how customers view your reliability. A quick turnaround can be key to minimizing your inventory, which translates to less risk of inventory obsolescence and lower cash outlays. It’s also key to your customer’s satisfaction, your reputation and ultimately getting a referral.
Accuracy. It’s not enough to receive a part in record time; the item must be the correct part and in useable condition.
Competitiveness. Parts suppliers can give you an advantage over your competition based on their pricing, flexibility, product quality and reliability.
Innovation. Suppliers can contribute significantly to your efficiency and processes through online ordering, parts look-ups and their relationships with the major OEMs.
Cooperation. It’s often said that rules are made to be broken. Policy and procedures are in place to ensure efficiency, but sometimes in a pinch, a good parts distributor will go above and beyond to pull that rabbit out of the hat.
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It’s OK to Have High Expectations
Parts distributors are essential to all appliance service businesses, but that doesn’t mean you can’t hold high expectations for them. Be fair, state your level of service needs clearly, and hold your parts distributors to their word on the level of supply and fulfillment. Do random price checks to make sure they stay competitive but don’t nickel-and-dime them.
Sometimes you need to replace a parts distributor because you have outgrown them, or they can’t perform to your expectations. But before dropping a parts supplier, be sure to try to communicate your needs and concerns so they can modify their processes (i.e., bend the rules) and deliver on your needs. Also, it’s not always wise to rely on only one supplier. If that supplier has staffing, supply issues or policies you can’t adhere to, you don’t want to be in a position where you’d be affected. So, keep a secondary distributor in the works, and don’t be embarrassed to tell your key distributor you’re doing so.
How to Be the Best Customer
You don’t have to buy the most parts to be the best customer to a parts distributor. Let’s assume a distributor wants you as a customer. To be the best customer for your parts distributor, here are a few things you should do:
Always Pay on Time. There is a reason this is listed first; it’s the most important rule. Parts distributors offer wholesale accounts payment terms of 30 days. You can negotiate for longer terms on special large orders before you place them, but don’t renege or attempt to change the terms once the order is placed. If you can’t pay on time, call your distributor, and tell them why and when you will pay.
Provide Adequate Lead Time. Give distributors sufficient time to source and process your orders. When possible, place your orders well before cut-off each day.
Place Sensible Orders. When you order the same part two or more times in a month, you should consider adding that item to your truck stock and ordering in quantity to reduce your distributor’s processing costs.
Return on Time. Return unwanted and unused parts as soon as you know you don’t need them. Let’s face it, nobody wants a five-year-old part back, not even you.
Stay Current on Warranty Credits. Stay on top of any warranty parts submissions and reconciliations. Going back through old records takes time and is annoying.
Personalize the Relationship. Regularly visit your parts distributor’s branch when time allows. Get to know the people that process your orders. Put a face to a name. Invite them to your office parties and picnics. If a parts distributor is far from your office, check to see if they’re going to any industry conventions you’re attending and meet them there in person.
Share Information. Keep your parts distributors aware of what’s going on in your company. Tell them about changes in key personnel, new customers, special promotions and the like. You’ll often find that good parts distributors can help you find new customers.
It’s simple: you need them, and they need you. Building good relationships with your parts distributor is not a complicated process. Be communicative, treat them fairly, set high expectations, be loyal and pay them on time. It’s as easy as that.
AVB’s ServiceSource lead Paul MacDonald ran his own 38-tech service business and is a past president of the UASA. He currently operates the Expert Service Program, which helps servicers run their operations more efficiently and profitably. You can reach Paul at (647) 500-7785 or paul.m.macdoanld@pmdgroup.ca.
