A natural goal is to achieve “Preferred Supplier Status” with retailers and your distributors. Satisfied trading partners generate superior results. It is highly desirable to achieve formal or informal recognition as a “Preferred Supplier”. Listed below are 15 tips to be viewed as a “Preferred Supplier” with your distributors and retail customers.
1. Invest in Brand Support- Marketing activities drive incremental sales and cultivate the health of your brand and category. Supplier investments in consumer awareness and retailer development activities help everyone achieve their sales objectives.
2. Innovate, Innovate, Innovate: The CPG/FMCG industry is fast paced, with frequent new product introductions. Companies which invest in research to deliver new product ideas out-perform and lead the category.
3. Provide Realistic Growth Expectations: Single digit sales increases are the norm for our industry. Calibrate your expectations for growth and success based upon market dynamics. If a market/category/retailer are growing at 5 %, you must make a case based upon your brand plans for a sales increase beyond the overall market growth rate.
4. Distributors Need to Make Money Too! Retailers, Manufacturers, and Distributors seek to achieve a reasonable profit. Distributors ( Importers/Brokers) are often “squeezed” as middlemen. Distributor Margin reductions translate to cutbacks in sales personnel, customer service, investments in technology, and ultimately impact results for your brand. A financially healthy distributor is a productive partner.
5. Focus on Priorities versus Minutiae- All partners are guilty of getting absorbed in the details of the business. Maintain attention on the key elements which drive business success. Minimize “non-essential” reports.
6. Keep the Supply Chain Filled- Short shipments cause a chain reaction of problems throughout the supply chain. Seek to attain a 98% case fill rate or better.
7. Visit the Market, But not Too Often- Distributors and Retailers welcome your periodic visits. Insights on market development and problem solving “face to face” are invaluable. On the other, you need to provide distributors the time and freedom to build the business without distraction of preparation and management of frequent supplier market visits.
8. Calibrate Time Commitment to Compensation- A first step is to evaluate what your brand represents to a distributor ( or retailer) in terms of annual revenue/profit contribution. Reflect on the activities requested to service your business in relation to your contribution.
9. Keep Your Commitments- Preferred suppliers are viewed as trusted partners. Reliable suppliers secure more than their fair share of retailer and distributor focus. Last minute cutbacks in marketing support are sometimes necessary, but damage your credibility.
10. Respond to Local Ideas- Distributors and Retailers know their markets. Give them the support they request on a new promotion idea or sales campaign. Let them build ownership of an idea and the ultimate results. Good ideas will build credibility and sales.
11. Pay Bill-backs on a Timely Basis- Many distributors are small businesses with tight cash flow. It is always positive to be viewed as a “Prompt Payer” of legitimate invoices.
12. Support Distributor with Corporate Headquarters- Many companies enjoy long term relationships with their distributor network. The Distributor depends on you to serve as their advocate with senior management of your company. Fight for their ideas and defend their business performance, where appropriate. Remember that all organizations experience a mix of “good years and bad years”.
13. Share Best Practices- Industry participants are all “students of the game” and are generally open to learning about strategies from other markets/retailers. On the other hand, we must recognize that all markets have subtle differences and not all approaches are transferable.
14. Provide Proper Lead Time to Achieve Desired Results- The consumer goods industry is relatively organized with established protocols and timelines. Exceptions can be made in case of product recall or breakthrough innovation. Everything functions better when timelines are adhered to.
15. Recognize Achievement- Take the time to say “Thanks” or “Well done”. This acknowledgement may be in the form of a personal note, phone call, or public recognition.