Redefining Supplier & Dealer Relationships
I remember the first time I had the opportunity to sit at the adult table and see what it was like between the company I worked for and our largest supplier of cabinetry. It started off with all the normal smiles and handshakes that you would expect from such a meeting but at the same time you could sense a fair amount of distance between both parties. I would come to learn that the amount of trust between the two companies was somewhere between slim and none and I am pretty sure slim had decided to leave town.
The relationship was built on the idea that if you lowered your guard, the other side would take advantage of it. Even if an initiative looked like collaboration on the front cover, it never went very far because both sides lacked belief that the other was truly executing on their side.
That is the way it was and that’s the way it stayed for the three decades I was there.
Looking back now it makes me wonder how much more success both companies would have been able to achieve if the existence of trust and collaboration had been there.
I think it is even more important today than ever that companies work together on a strategy that will benefit both of them and help towards profitable market share growth.
The old days of beating up a supplier to get everything you can only diminishes the supplier’s ability to do the following:
- Invest back into the company
- Provide compensation and benefits that attract top talent that will serve your company
- Keep you in good standing with your partner so when things arise like supply chain issues, that they will have your back.
The list goes on, but you get the idea.
I think an effective way to approach these meetings going forward, is to first understand how both see their best type of growth in the future.
The manufacturer may offer a lower price product but doesn’t want that to become the majority of the purchases from the dealer. On the other side, the dealer may want to make more inroads on the retail side of the business and may need more help with their marketing efforts. Maybe something like a 2-hour free assessment of their website.
The key to this whole relationship equation is to approach it as if the true goal is for 1+1=3 and not with the idea that if you got everything you want, and the other side leaves deflated that you have won. Long term, you will find out that you were successful in the battle but have also negatively influenced your ability to win the war.
The companies that recognize the true value of these relationships will take the time to work together to be successful and in the long run will both come out on top in the fight for market share. Start having fun together and decide as a team you are both going to kick some serious arse and good things will happen!